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

SPONSOR HTPW

ORIGINAL DATE

LAST UPDATED

2/7/2008

HB 656

SHORT TITLE Public Peace, Health, Safety & Welfare

SB

ANALYST Moser

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

FY10

$0.1

$0.1

Recurring

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

New Mexico Department of Transportation (NMDOT)

SUMMARY

Synopsis of Bill

House Bill 656 broadens the definition of a regional transit system within the Regional Transit

District Act (RTDA) to include “…a street, road, highway and bridge that is of regional or

district significance, in a district whose geographic area includes a class A county with a

population greater than five hundred thousand…" The Regional Transit District Act (RTDA)

presently defines a regional transit system as being “a property, improvement or system designed

to be compatible with established state and local transportation plans that transports or conveys

passengers within a region by means of a high occupancy vehicle including an automobile, truck,

bus, van or railcar."

House Bill 656 – Page

2

This amendment will expand the uses of any tax imposed by the regional transit district (RTD) to

include streets, roads, highways and bridges that are of regional or district significance.

FISCAL IMPLICATIONS

House Bill 656 would allow imposition of not less than 1/16

th

percent and not more than ½

percent county regional transit gross receipts tax in a qualifying district. Currently the only

qualifying RTD would be composed of Bernalillo, Sandoval, and Valencia counties. This RTD

has not chosen in the past to impose such the county regional transit gross receipts tax. The

timing of this fiscal impact will depend on when and if the board of directors of the district

passes a resolution directing each county to impose the tax, and when and if the voters of the

three counties approve imposition of the tax.

The table below illustrates the revenue that would be generated if a 1/8 percent increment were

imposed in FY09 based upon the most recent data provided by the Taxation and Revenue

Department. In FY09, these three counties will have combined taxable gross receipts totaling

$20 billion in FY09. A 1/8 percent tax on that amount would yield $25.1 million.

Illustration of Potential Revenue from Additional County Local Option Increments - Fiscal Year

2009

County

FY09 Taxable

Gross Receipts

Potential Revenue: 1/8% County Regional Transit GRT

Increment

Bernalillo

$17,471,824,545

21,839,781

Sandoval

$1,820,394,040

2,275,493

Valencia

$783,790,951

979,739

Total

$20,076,009,536

25,095,012

Source: Taxation and Revenue Department, Office of Research and Statistics

SIGNIFICANT ISSUES

House Bill 656 by modifying the definition of a regional transit system to include roads,

highways and bridges of regional significance creates the opportunity for local option taxes to be

imposed, after approval by the electorate, for improvement and construction of highway projects

within the district. This creation of local option taxes for highway programs was one of the

recommendations presented by the House Memorial 35 task force in 2007.

With this addition, the Regional Transit District Board could develop a proposal for a gross

receipts tax increase or a bond to fund a package of transportation improvements including both

road and public transportation projects.

In addition to allowing local option taxes this amendment would allows for the imposition of

tolls on roads within the district. Tolling previously was restricted to public transportation

systems under this act.

New Mexico’s municipalities and counties are authorized to impose over 4 percent of local

option gross receipts taxes (that figure excludes several additional local option taxes that have

House Bill 656 – Page

3

been authorized for selected local governments). Due to increasing imposition of local option

taxes, the statewide gross receipts tax rate is increasing steadily. On average, a local option gross

receipts tax of about 1.9 percent will be imposed by local governments statewide by FY09.

Combined with the state gross receipts tax of 5 percent, the statewide tax rate is therefore 6.9

percent.

The relationship with the NMDOT regarding the Statewide Transportation Improvement Plan

and its coordination with a RTD plan on highway improvements needs to be reviewed as part of

this bill as the timing and funding of projects may be impacted.

GM/bb