BILL ANALYSIS AND FISCAL IMPACT REPORT	Page 1 of  2

DATE:  February 22, 2001	Submitted by: TAXATION AND REVENUE DEPT.
	T. GLENN ELLINGTON, SECRETARY
BILL NUMBER: SB – 701 (Revised Fiscal Imact)

SPONSOR: Senator Rawson

BILL SHORT TITLE: Gross Receipts Tax Deduction for Home Daycare Receipts

CONFLICTS, DUPLICATES, COMPANIONS: SB-586 -- Child Care Quality Investment Tax Credit (not GRT, but can claim credit against GRT); SB-97 & HB-10 -- Child Daycare GR Deduction.

DESCRIPTION: This bill provides a gross receipts tax deduction for receipts from providing child daycare services in a licensed family child-care home. The child-care home must also qualify as a participant in the family nutrition program. 

EFFECTIVE DATE: July 1, 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          .             	
	(2,460)	(2,690)	Recurring	General Fund	
	(1,490)	(1,630)	Recurring	Local Governments	

ADMINISTRATIVE IMPACT: minimal. No impact on systems or processing. Forms, instructions, technical advice memoranda, taxpayer seminar material will have to be developed and changed and some regulations will have to be developed and promulgated.

TECHNICAL ISSUES: grammatically, “under the family nutrition program” can be taken to modify “registered homes”, not licensed and registered homes.  It has been read here, however, to apply to both licensed and to registered homes.  

OTHER IMPACTS AND ISSUES:
1.	The following bullets profile the home daycare industry.
•	Most child care homes are registered (as opposed to licensed).

•	There are a total of 8,510 registered providers (homes) in the state.

•	There are 284 licensed homes in the state.

•	To participate in the nutrition program, the facility must be in an area in which at least one quarter of children are poor. 

•	76% of all licensed/registered providers participate in the nutrition program. Licensed homes are somewhat more likely to be in higher income neighborhoods.

•	There are 7,150 providers participating in the nutrition program. This includes licensed daycare centers, as well as child care homes. 

•	The high poverty counties have the greatest proportion of registered homes (as opposed to licensed homes or centers).

•	27.8% of nutrition program participants are in Dona Ana County and only 15% are in Bernalillo County.

•	A primary reason for registering at all is to get into the nutrition program. The nutrition program is a really good deal for providers and for kids.  Anybody who can participate does.

•	Average monthly reimbursement by CYFD is $240.  This varies though by rural/urban home vs center etc. For FY 2000 CYFD reimbursed registered and licensed home infant and toddler care at $12/day in metro areas and $10/day in rural areas. Pre-school care was $11 in metro areas and $9 in rural areas. Average reimbursement rates, taken over all homes is a little less than $11 per day.

•	registered capacity for 8,150 home care providers is 38,170. These aren't all food program participants. The registered capacity is an absolute maximum and the actual number of kids getting care in registered homes is somewhat less. For the purpose of the estimate, 90% enrollment has been assumed.