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F I S C A L I M P A C T R E P O R T
SPONSOR Silva
ORIGINAL DATE
LAST UPDATED
2/4/08
HB 623
SHORT TITLE County Health Care Gross Receipts Time Limit
SB
ANALYST Schardin
REVENUE (dollars in thousands)
Estimated Revenue
Recurring
or Non-Rec
Fund
Affected
FY08
FY09
FY10
10,291.2 Recurring Bernalillo
County
(Parenthesis ( ) Indicate Revenue Decreases)
Duplicates SB428
SOURCES OF INFORMATION
LFC Files
Responses Received From
Taxation and Revenue Department (TRD)
Health Policy Commission (HPC)
SUMMARY
Synopsis of Bill
House Bill 623 amends Section 7-20E-18 NMSA 1978 so that counties with populations above
500 thousand (Bernalillo) will retain the option of imposing a second 1/16 percent increment of
the county health care gross receipts tax indefinitely. Currently, that county may only impose the
second 1/16 percent increment until June 30, 2009.
Because the bill has no effective date, it would become effective 90 days after the 2008
legislature adjourns on May 14, 2008.
FISCAL IMPLICATIONS
Bernalillo County is the only county in New Mexico authorized to impose a second 1/16 percent
increment of the county health care gross receipts tax. Bernalillo county’s taxable gross receipts
base will be about $18.1 billion in FY10, the first year that the increment would sunset under
current law. An additional 1/16 percent increment will increase Bernalillo county gross receipts
tax collections by about $11,291.2 thousand in FY10.
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House Bill 623 – Page
2
SIGNIFICANT ISSUES
The 2006 legislature amended the county health care gross receipts tax statute to allow counties
with populations over 500 thousand to impose an additional 1/16 percent gross receipts tax
increment. The Senate Finance Committee amendment to the 2006 bill (HB 274) inserted a
sunset clause so that the additional 1/16 percent increment could only be imposed until June 30,
2009.
Revenues collected from the first 1/16 percent increment of the county health care gross receipts
tax are restricted for deposit in the county-supported Medicaid fund, a non-reverting fund that is
appropriated to the human services department to support the Medicaid program. If a county
chooses not to impose a 1/16 percent county health care gross receipts tax, that county must
dedicate an amount equal to 1/16 percent of gross receipts to the county-supported Medicaid
fund.
Revenues collected due to Bernalillo County’s second 1/16 percent increment of the county
health care gross receipts tax must be used to support the health care costs of indigent patients.
The second increment is intended to support the Bernalillo County hospital, which is located at
UNM.
New Mexico’s municipalities and counties are authorized to impose over 4 percent of local
option gross receipts taxes (that figure excludes several additional local option taxes that have
been authorized for selected local governments). Due to increasing imposition of local option
taxes, the statewide gross receipts tax rate is increasing steadily. On average, a local option gross
receipts tax of about 1.9 percent will be imposed by local governments statewide by FY09.
Combined with the state gross receipts tax of 5 percent, the statewide tax rate is therefore 6.9
percent.
ADMINISTRATIVE IMPLICATIONS
The bill will create minimal administrative impacts on TRD.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
House Bill 623 duplicates Senate Bill 428.
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