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F I S C A L I M P A C T R E P O R T
SPONSOR Fox-Young
ORIGINAL DATE
LAST UPDATED
2/10/06
HB 819
SHORT TITLE Public Money Bond Authorization
SB
ANALYST Kehoe
APPROPRIATION (dollars in thousands)
Appropriation
Recurring
or Non-Rec
Fund
Affected
FY06
FY07
$31,000.0
Non-Recurring
General Fund
$88,600.0 Non-Recurring
General Fund
(Parenthesis ( ) Indicate Expenditure Decreases)
Duplicates,Relates to,Conflicts with, Companion to
Duplicates Appropriation in the General Appropriation Act
Relates to Appropriation in the General Appropriation Act
REVENUE (dollars in thousands)
Estimated Revenue
Recurring
or Non-Rec
Fund
Affected
FY06
FY07
FY08
$31,000.0
Non-Recurring State Building
Bond Fund
$88,600.0
Non-Recurring State Building
Bond Fund
(Parenthesis ( ) Indicate Expenditure Decreases)
SOURCES OF INFORMATION
LFC Files
Taxation and Revenue Department (TRD)
General Services Department (GSD)
New Mexico Finance Authority (NMFA)
SUMMARY
House Bill 819 appropriates $119.6 million from the general fund for defeasance of all out-
standing State Office Building Tax Revenue Bonds; and appropriates funds for certain capital
pg_0002
House Bill 819 Page
2
projects for which the bonds have been authorized.
FISCAL IMPLICATIONS
House Bill 819 appropriates $31 million from the general fund to the state building bonding fund
for expenditure in fiscal years 2006 and 2007 for the purpose of retiring all outstanding state of-
fice building tax revenue bonds. Any unexpended or unencumbered balances remaining at the
end of fiscal year 2007 shall revert to the general fund.
The bill appropriates $88.6 million from the general fund to the Property Control Division of the
General Services Department for expenditure in fiscal years 2006 through 2011 for certain capi-
tal outlay projects as follows:
$23.5 million to purchase, renovate, equip and furnish the Public Employees Retirement
Association (PERA) building located on the central capitol campus in Santa Fe, at a ne-
gotiated price that is not less than fair market value.
$8 million to plan, design, construct and equip a parking structure located on the central
capitol campus in Santa Fe to be transferred to and operated by the Legislative Council
Service.
$31.8 for land acquisition and to plan, design, construct and equip a state laboratory fa-
cility in Albuquerque.
$10.3 million for capital projects at the Southern New Mexico Rehabilitation Center
(SNMRC) at Roswell.
$11 million for capital projects at the New Mexico Behavioral Health Center (NMBHC)
at Las Vegas.
$4 million for capital projects at the Fort Bayard Medical Center (FBMC) near Silver
City.
The bill repeals Section 8 of Laws of 2005 (Chapter 320) which eliminates authorization for $39
million in revenue bonds payable from cigarette tax revenues for SNMRC, NMBHC, FBMC,
and the state laboratory currently under construction in Albuquerque.
The New Mexico Finance Authority (NMFA) reports approximately $43 million of debt service
balance remains on the State Office Building Revenue Bonds and confirms the cost to retire the
bonds is $31 million, assuming the state would purchase an escrow and earn at least 4.36 per-
cent. This represents a $12 million in savings over the life of the bonds.
According to TRD, the proposed bill does not address the earmark of $6 million of gross receipts
tax revenue which currently goes to the State Office Building Fund to pay debt service on the
outstanding bonds. If the bonds proposed in this bill are retired, it may be possible to eliminate
the earmark of the revenues and allow the money to flow back into the general fund.
SIGNIFICANT ISSUES
The New Mexico Finance Authority in 2002 issued $34,695,000 of State Office Building Tax
Revenue bonds for three projects authorized by the Legislature. The projects included purchase
of the NEA building, West Capitol Complex and the acquisition of land on Cerrillos Road in
Santa Fe. The bonds are secured with a pledge of the first $500,000 per month in gross receipts
pg_0003
House Bill 819 Page
3
tax collections from the state.
In addition, NMFA issued bonds for the Department of Cultural Affairs for $5,760,000 in 2003.
This debt is secured by the same revenue stream and has approximately $5,613,000 outstanding,
but the debt is currently callable.
The four Department of Health projects listed above were authorized by the Legislature in 2005
and financed through the issuance of bonds by NMFA with a pledge of cigarette tax revenues
and a backup pledge of the cigarette tax credit enhancement account. The bonds have not been
issued as of this date.
LMK/mt