BILL ANALYSIS AND FISCAL IMPACT REPORT	Page 1 of  2

DATE: February 25, 2001	Submitted by: TAXATION AND REVENUE DEPT.
	T. GLENN ELLINGTON, SECRETARY
BILL NUMBER: HB-416 as amended by House Judiciary Committee

SPONSOR:  Representative Godbey

BILL SHORT TITLE: Allowing a credit for the unexpired portion of an extended registration.

CONFLICTS, DUPLICATES, COMPANIONS: 

DESCRIPTION: This measure would amend Sections 66-3-20.1, 101, and 104 NMSA 1978 of the Motor Vehicle Code. Under current statute, owners of vehicles weighing less than 26,000 may register the vehicles for up to two years, rather than the traditional one-year period. They are charged a fee in proportion to the time by which the registrations are extended. If registration expires because, for example, the vehicle is sold, existing statutes do not appear to provide for refunding unused portions. The proposed measure would allow owners to transfer unexpired portions of extended registration fees to other vehicles they own when they sell or otherwise transfer vehicles on which extended registrations have been paid. 
	The HJC amendment changes the measure as follows. Current language specifies that an owner may receive a credit for the unexpired portion of a registration fee. The wording is "... a credit amount representing the unexpired portion of the registration fee shall be applied, on a pro rata basis, to the registration fee...". The amendment would change the wording to is "... a credit amount representing the unexpired portion of the registration fee plus an administrative fee to be determined by the department  shall be applied, on a pro rata basis, to the registration fee...". 

EFFECTIVE DATE: Not specified, assume 90 days after adjournment --June 15, 2001.

FISCAL IMPACT (Thousands of dollars):  		Note: Parenthesis ( ) indicate a revenue loss:
		Recurring or		
	Estimated Impact on Revenues	Nonrecurring	Funds 	
	FY 2002	Full Year  	     Impact     t     	             Affected          .             	
	(*)	(*)	Recurring	State Road Fund	
	(*)	(*)	Recurring	Local  Governments	
					
*Uncertain. According to figures provided by the Motor Vehicle Division, roughly 24 percent of the total registration fees for vehicles weighing 26,000 pounds or less consist of extended registrations. Since approximately 1.7 million registrations of this type are issued annually, roughly 400,000 extended registrations are likely to be issued annually during the near future. If it is assumed that approximately 10 percent of that total would consist of owners requesting credits provided by the proposed legislation, roughly 40,000 of the extended credits would be subject to refunds. If it is further assumed that the unused portion of refunds totals average $15, then roughly $600,000 in credits would be extended. Approximately 2/3rds of this amount would represent loss to the State Road Fund; roughly $200,000 would represent loss to other funds --primarily funds that would otherwise flow to local governments. 

ADMINISTRATIVE IMPACTS:  Although, as discussed below, the proposed measure would be somewhat difficult to administer, it could be done with existing resources available to the Department.

TECHNICAL ISSUES: The phrase "plus an administrative fee" in the amendment should probably be changed to "less an administrative fee".  The current language suggests that the administrative fee is to be paid to the person seeking refund.  

OTHER IMPACTS AND ISSUES: 
•	The proposed measure would be fairly difficult to administer due to the need to match credits with registration obligations for existing vehicles, and keep records of the transactions. A system whereby taxpayers are provided with refunds of unused portions of extended registrations fees rather than credits would be much easier to administer than the credit system established by the proposed legislation.

•	TRD has provided partial refunds of extended registration fees in the recent past. Statutes are unclear regarding whether this is permissible, however.