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





SPONSOR: Burpo DATE TYPED: 03/14/01 HB 546/aSCORC
SHORT TITLE: Amend Small Business Investment Act SB
ANALYST: Valdes


APPROPRIATION



Appropriation Contained
Estimated Additional Impact
 Recurring

or Non-Rec

 Fund

Affected

FY01 FY02 FY01 FY02
NFI



(Parenthesis ( ) Indicate Expenditure Decreases)



SOURCES OF INFORMATION



LFC Files



SUMMARY



     Synopsis of SCORC Amendment



This amendment removes language placed in the original bill which authorized the Small Business Investment Corporation Board to determine if certain collateral would be acceptable for rural development business and industrial loans made. The effect of the amendment would be to require that all loans made for this purpose be subject to approval of the United States Small Business Administration or the United States Department of Agriculture. The amendment maintains limitations in existing law for collateral requirements on rural development business and industrial loans.



Synopsis of Original Bill



House Bill 546 expands the investments of the Small Business Investment Corporation authorized in present statutes to allow indebtedness collateralized to the satisfaction of the corporation's board of directors.



The bill requires that a president be selected from among the members of the Board. It authorizes the following members to appoint a designee to represent them on the Board:





The bill also authorizes the Board to appoint a qualified individual other than the president as chief executive officer of the corporation.



Significant Issues



This bill allows additional authority to the Small Business Investment Corporation Board of Directors to provide investment capital collateralized by debt instruments acceptable to the Board. This would expand opportunities for investment in small business in New Mexico while holding the Board responsible for setting collateral requirements. The composition of the Board would assure that Small Business Investment Corporation investments are adequately protected. The bill would stimulate economic development in New Mexico.



ADMINISTRATIVE IMPLICATIONS



This bill would streamline the composition of the Board of Directors and authorize the Board to select a chief executive officer to administer the operations of the Board.



MV/ar/njw