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F I S C A L I M P A C T R E P O R T
SPONSOR Herrera
ORIGINAL DATE
LAST UPDATED
2-1-06
2-2-06 HB 522
SHORT TITLE
HIDALGO MEDICAL FACILITY OUTSTANDING
DEBT
SB
ANALYST Hadwiger
APPROPRIATION (dollars in thousands)
Appropriation
Recurring
or Non-Rec
Fund
Affected
FY06
FY07
$1,484.5 Non-Recurring
General Fund
(Parenthesis ( ) Indicate Expenditure Decreases)
SOURCES OF INFORMATION
LFC Files
Responses Received From
Department of Finance and Administration (DFA)
SUMMARY
Synopsis of Bill
House Bill 522 appropriates $1.4845 million from the general fund to the Local Government Di-
vision (LGD) of the Department of Finance and Administration (DFA) in FY07 to retire the out-
standing debt of the Hidalgo Medical Services Facility.
FISCAL IMPLICATIONS
The appropriation of $1.4845 million contained in this bill is a non-recurring expense to the gen-
eral fund. Any unexpended or unencumbered balance remaining at the end of FY07 would revert
to the general fund.
SIGNIFICANT ISSUES
DFA indicated that, in 2001, Hidalgo Medical Services Facility (HMSF) applied for and received
a loan from the NMFA. The loan was for the construction of a new facility for Hidalgo Medical
Services. According to the NMFA, the loan was funded from the Primary Care Capital Fund,
which is for non-profit providers. Hidalgo County, along with the City of Lordsburg signed as
guarantors on the loan. The local governments pledged gross receipts tax (GRT) revenues as a
secure guarantee. Annual payments are made on the NMFA loan balance. According to the
pg_0002
House Bill 522 Page 2
NMFA, the current balance on the HMSF loan as of June 30, 2005 is $1,433,648.64. Payments
are made with HMSF revenues. Hidalgo County wants to apply for an NMFA loan to construct a
new jail facility. Since their GRT revenues are already pledged to guarantee the HMSF loan,
they can't apply for additional funding. Retiring this loan balance would free up Hidalgo
County's GRT revenues and enable them to apply for a loan.
ADMINISTRATIVE IMPLICATIONS
DFA has the capacity to administer this non-recurring appropriation.
TECHNICAL ISSUES
DFA was concerned that no specific recipient is identified in the legislation. Because HMSF is a
non-profit organization, the appropriation must be made to a local government, for payment of
the loan. An appropriation to a non-profit would be a violation of the anti-donation clause. Be-
cause both Hidalgo County and the City of Lordsburg are guarantors on the loan, the appropria-
tion could be made to either entity. Annual payments are made on the NMFA loan balance. Ac-
cording to the NMFA, the current balance on the HMSF loan as of June 30, 2005 is
$1,433,648.64. The legislation language appropriates $1,484,450. The legislation is appropriat-
ing $50,801.36 beyond the actual loan balance. Hidalgo County has an additional NMFA loan.
The outstanding balance on that loan is $1,083,870.08.
AMENDMENTS
Possible amendments include specifying the ultimate recipient of the funds and adjusting the
amount of the appropriation to the current outstanding balance on the HMSF loan.
DH/mt:yr