BILL ANALYSIS AND FISCAL IMPACT REPORT	Page 1 of  1

DATE:  March 9, 2001	Submitted by: TAXATION AND REVENUE DEPT.
	T. GLENN ELLINGTON, SECRETARY
BILL NUMBER: Senate Rules Committee Substitute for SB-855
		    as amended by the Senate Conservation Committee (3/8/2001)

SPONSOR:  Senate Rules Committee

BILL SHORT TITLE: Amending the Municipal Code Pertaining to Municipal Sanitary Sewer and Water Utilities.

DESCRIPTION: Currently municipalities are barred from acquiring a utility with gross receipts tax revenue bonds unless the question of acquiring the utility is put to the voters. Normally the Public Regulation Commission approval is also required for such revenue bond-financed acquisitions. As amended, this bill provides an exception when the utility is acquired to provide wastewater service to areas without service. Neither the voters nor the Commission would have any say in such transactions.

EFFECTIVE DATE: emergency clause – effective on signing.

FISCAL IMPACT:  If a private utility is being purchased, its receipts are subject now to state and local gross receipts tax. If the utility becomes an instrumentality of a municipality, its receipts from providing wastewater services become subject to the governmental gross receipts tax instead. This would occasion a net loss of tax revenue to the municipality and a net gain to state funds: 75% to NM Finance Authority’s public projects revolving fund and 25% to Energy, Minerals and Natural Resources Department funds.

ADMINISTRATIVE IMPACT: none.