Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports
if they are used for other purposes.
Current FIRs (in HTML & Adobe PDF formats) are a vailable on the NM Legislative Website (legis.state.nm.us).
Adobe PDF versions include all attachments, whereas HTML versions may not. Previously issued FIRs and
attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.
F I S C A L I M P A C T R E P O R T
SPONSOR Cisneros
ORIGINAL DATE
LAST UPDATED
1/27/06
HB
SHORT TITLE Affordable Housing Gross Receipts
SB 369
ANALYST Francis
REVENUE (dollars in thousands)
Estimated Revenue
Recurring
or Non-Rec
Fund
Affected
FY06
FY07
FY08
(932.0)
(932.0) Recurring General Fund
(622.0)
(622.0) Recurring Local Govern-
ments
(Parenthesis ( ) Indicate Expenditure Decreases)
SOURCES OF INFORMATION
LFC Files
Taxation and Revenue Department (TRD)
Responses Received From
Energy Minerals and Natural Resources (EMNRD)
Taxation and Revenue Department (TRD)
SUMMARY
Synopsis of Bill
Senate Bill 369 adds a new section to the Gross Receipts and Compensating Tax Act to allow for
a deduction from gross receipts or governmental gross receipts the sales of tangible property to
an organization that builds affordable housing.
The effective date is July 1, 2006.
FISCAL IMPLICATIONS
The gross receipts and governmental gross receipts revenue would decline in FY07 and subse-
quent years. TRD estimates that the fiscal impact would be $1.54 million per year in reduced
gross receipts tax collections for the state and the counties. This is based on an estimate of the
materials cost of a typical NM house for 800 houses.
pg_0002
Senate Bill 369 Page
2
The impact will also affect the Government gross receipts fund which will reduce revenue dis-
tributed to the Energy Minerals and Natural Resources Department.
SIGNIFICANT ISSUES
The buyer of building materials will have to get a non-taxable transaction certificate (NTTC) to
deliver to the seller so the seller can claim the deduction.
ADMINISTRATIVE IMPLICATIONS
TRD reports that the bill does not establish who is a qualified grantee and how a grantee be-
comes qualified. This information would be need to grant an NTTC.
OTHER SUBSTANTIVE ISSUES
The New Mexico Affordable Housing Tax Credit Program, signed into law April 2005, provides
tax credits to individuals, businesses and local governments that provide donations to affordable
housing projects approved by the New Mexico Mortgage Finance Authority. Credit can be taken
on income taxes, gross receipts taxes and compensating taxes (excluding local option gross re-
ceipts tax imposed by a municipality or county, or the government gross receipts tax) to any eli-
gible individual, business, and local or tribal government that donate land, buildings, cash or ser-
vices for an affordable housing project approved by MFA or for a trust fund administered by the
MFA.
NF/mt