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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

1/27/06

2/3/06 HB 602/aHTRC

SHORT TITLE Raise Gas Tax & Create School Bus Fund

SB

ANALYST Francis

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

FY08

(4.4)

(4.5)

Recurring

State Aviation Fund

6.3

6.4

Recurring

Motorboat Fuel Tax

Fund

7.5

7.6

Recurring

Counties and

Municipalities

(4.6)

(4.7)

Recurring

County Government

Road Fund

(4.6)

(4.7)

Recurring

Road Funds of

Municipalities

3.1

3.1

Recurring

Municipal Arterial

Program

17,806.9

18,199.7

Recurring

School Bus Routes

Fund

19.1

19.0

Recurring

State Road Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Taxation and Revenue Department (TRD)

Department of Transportation (DOT)

Public Education Department (PED)

SUMMARY

Synopsis of HTRC Amendment

HB 602, as amended, requires that the department will promulgate a rule regarding the use of the

proceeds of the bonds including provisions for the most efficient use of all sources of funds. The

amendment also creates a new subsection that identifies specific cap amounts for each of the 89

House Bill 602/aHTRC – Page

2

school districts. Other changes include clarifying that the bonds are school bus routes bonds.

Synopsis of Original Bill

House Bill 602 does the following:

1.

Increase gasoline tax from 17 cents to 19 cents per gallon;

2.

Creates a new fund called the “school bus routes fund”;

3.

Changes the distributions of the gasoline tax of other beneficiaries to incorporate the

school bus routes fund.

The school bus routes fund will be a fund used for school bus routes and public school parking

lot projects. The revenues from the gasoline tax distributed to the fund will be used for revenue

bonds issued by the New Mexico Finance Authority to pay for projects up to $200 million. The

bonds will have a maturity of not more than 15 years.

The effective date is July 1, 2006.

FISCAL IMPLICATIONS

There are no additional fiscal impacts due to the amendment.

The bill contains both a gasoline tax increase and a redistribution of the gasoline tax revenues.

The net impact by fund is shown below:

Table 1: Net Impact of HB602

Gasoline Tax Distribution

Impact

Current Law HB602

FY07

Impact

FY08

Impact

State Aviation Fund

0.26%

0.23%

(4,449)

(13,129)

Motorboat Fuel Tax Fund

0.13%

0.12%

6,229

1,889

Counties and Municipalities

10.38%

9.29%

4,449

(342,051)

County government road fund

5.76%

5.15%

(6,229)

(198,507)

Road funds of Municipalities

5.76%

5.15%

(6,229)

(198,507)

Municipal arterial program

1.44%

1.29%

2,670

(45,400)

School Bus Routes Fund

0.00%

10.53%

17,803,508

17,803,508

General Fund

0.26%

0.26%

-

-

Tribal Sharing

2.70%

2.70%

-

-

State Road Fund

73.31%

65.28%

(2,670)

1,281,056

House Bill 602/aHTRC – Page

3

1. Change in the distribution of the gasoline tax revenues. To incorporate the new fund with

in the gasoline tax distribution scheme, other funds had their distribution shares decreased. The

table below indicates the net impact and the new shares. Tribal sharing and general fund distri-

butions are static amounts – $4.08 million and $400 thousand respectively – and so the shares

have been calculated based on the revenue.

2. Change in the gasoline tax rate. HB 602 also includes a two-cent increase in the gasoline

tax per gallon. That increase will generate $18 million per year for road infrastructure projects.

Table 3 shows the impacts by fund of the gas increase.

This bill creates a new fund and provides for continuing appropriations. The LFC has concerns

with including continuing appropriation language in the statutory provisions for newly created

funds, as earmarking reduces the ability of the legislature to establish spending priorities.

SIGNIFICANT ISSUES

NMFA:

The New Mexico Finance Authority is authorized to issue up to $200,000,000 using the

funds generated by the new “school bus routes fund”. The terms of any bonds issued by the

New Mexico Finance Authority shall not exceed 15-years.

The New Mexico Finance Authority may, when directed by the State Transportation Com-

mission, refund existing bonds by exchange, current, or advance refunding. When issuing

bonds, the New Mexico Finance Authority may enter into interest exchange agreements, in-

terest rate swap contracts, insurance agreements, remarketing agreements and any agree-

ments necessary to issue the bonds.

HB 602 contains non-impairment language to protect the revenues of the fund while there are

outstanding loans or bonds secured with this revenue source. It provides that the State will

not do anything to alter or impair the distribution while the bonds are outstanding.

OTHER ISSUES

Included in the amendment were specific caps for each school district:

School District

Identifying

Code

Project Ex-

penditure

Limit

Alamogordo

46

$2,366,000

Albuquerque

1 $34,606,000

Animas

30

$854,000

Artesia

22

$2,244,000

Aztec

64

$2,326,000

Belen

87

$3,420,000

Bernalillo

61

$2,474,000

Bloomfield

66

$2,418,000

Capitan

40

$586,000

Carlsbad

20

$2,874,000

Carrizozo

37

$458,000

Central

67

$5,640,000

Chama

53

$560,000

House Bill 602/aHTRC – Page

4

School District

Identifying

Code

Project Ex-

penditure

Limit

Cimarron

8

$850,000

Clayton

84

$1,608,000

Cloudcroft

48

$644,000

Clovis

12

$2,400,000

Cobre Consolidated

24

$1,182,000

Corona

38

$662,000

Cuba

62

$1,616,000

Deming

42

$2,812,000

Des Moines

85

$482,000

Dexter

6

$712,000

Dora

60

$658,000

Dulce

54

$125,000

Elida

58

$568,000

Espanola

55

$4,372,000

Estancia

80

$872,000

Eunice

32

$250,000

Farmington

65

$4,978,000

Floyd

59

$230,000

Fort Sumner

16

$1,312,000

Gadsen

19 $10,404,000

Gallup

43 $20,068,000

Grady

15

$484,000

Grants

88

$2,098,000

Hagerman

5

$260,000

Hatch

18

$730,000

Hobbs

33

$3,302,000

Hondo

39

$336,000

House

50

$332,000

Jal

34

$476,000

Jemez Mountain

56

$1,328,000

Jemez Valley

63

$546,000

Lake Arthur

7

$131,000

Las Cruces

17 $12,504,000

Las Vegas East

69

$1,308,000

Las Vegas West

68

$1,754,000

Logan

51

$608,000

Lordsburg

29

$410,000

Los Alamos

41

$924,000

Los Lunas

86

$7,066,000

Loving

21

$164,000

Lovington

31

$1,378,000

House Bill 602/aHTRC – Page

5

School District

Identifying

Code

Project Ex-

penditure

Limit

Magdalena

75

$548,000

Maxwell

11

$73,000

Melrose

14

$526,000

Mesa Vista

78

$1,286,000

Mora

44

$658,000

Moriarty

81

$5,856,000

Mosquero

28

$386,000

Mountainair

82

$382,000

Pecos

70

$760,000

Penasco

77

$458,000

Pojoaque

72

$1,864,000

Portales

57

$1,060,000

Quemado

3

$632,000

Questa

79

$444,000

Raton

9

$842,000

Reserve

2

$416,000

Rio Rancho

83

$5,792,000

Roswell

4

$3,018,000

Roy

27

$470,000

Ruidoso

36

$1,502,000

San Jon

52

$438,000

Santa Fe

71

$7,118,000

Santa Rosa

25

$1,072,000

Silver City

23

$1,500,000

Socorro

74

$1,054,000

Springer

10

$316,000

Taos

76

$2,100,000

Tatum

35

$826,000

Texico

13

$464,000

Truth or Consequences

73

$1,586,000

Tucumcari

49

$852,000

Tularosa

47

$804,000

Vaughn

26

$151,000

Wagon Mound

45

$312,000

Zuni

89

$664,000

NF/mt:yr