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F I S C A L I M P A C T R E P O R T

SPONSOR Smith

ORIGINAL DATE

LAST UPDATED

1/30/06

HB

SHORT TITLE County Correctional Facility Bond Maturity

SB 299

ANALYST Schardin

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates HB361.

SOURCES OF INFORMATION

LFC Files

Responses Received From

New Mexico Association of Counties (NMAC)

Taxation and Revenue Department (TRD)

Department of Finance and Administration (DFA)

SUMMARY

Synopsis of Bill

Senate Bill 299 would extend the maximum maturity time for revenue bonds issued pursuant to

the County Correctional Facility Gross Receipts Tax Act from 10 to 25 years.

No effective date is specified, so assume 90 days following adjournment of the 2006 Session on

May 17, 2006.

SIGNIFICANT ISSUES

NMAC reports that normally bonds issued for capitol improvements are issued for as long as the

financed improvement is expected to last. Limiting the bond issuance to 10 years on facilities

that are designed to last much longer makes it expensive for counties to amortize the bond pro-

ceeds. Increasing the maximum bond maturity to 25 years will help counties by making debt ser-

vice payments more affordable.

Senate Bill 299 – Page

2

DFA notes that while allowing bond maturities of up to 25 years will make debt service pay-

ments more affordable, it will also increase interest costs paid by counties.

The County Correctional Facility Gross Receipts Tax may be imposed in increments of 1/16 per-

cent up to 1/8 percent. Revenue from the tax must be used to operate, maintain, construct, or

purchase a judicial-correctional or county correctional facility or to pay debt service on revenue

bonds.

TRD reports that as of January 1, 2006 the following New Mexico counties have imposed the

tax: Cibola, Curry, Guadalupe, Harding, McKinley, Mora, Otero, Quay, Roosevelt, San Juan,

San Miguel, Santa Fe, Sierra, Socorro, Torrance, Union, and Valencia.

ADMINISTRATIVE IMPLICATIONS

TRD reports that Senate Bill 299 would create minimal administrative impacts. Forms, instruc-

tions and publications will be changed with existing resources.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Senate Bill 299 duplicates House Bill 361.

SS/yr