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

SPONSOR:	Maes		DATE TYPED:	01/29/02		HB
SHORT TITLE:		In-Plant Training				SB	217
					ANALYST:		Woodlee

APPROPRIATION

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY02

FY03

FY02

FY03

$6,000.0

$15,000.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to Appropriations in The General Appropriation Act.

Relates to House Bill 7 and Senate Bill 142

SOURCES OF INFORMATION

Economic Development Department

Labor Department

SUMMARY

Synopsis of Bill

Senate Bill 217 appropriates $6,000.0 from the general fund for fiscal year 2002 and $15,000.0 from the general fund for fiscal year 2003 to the Economic Development Department for the Industrial Development Training Program (IDTP), also known as In-Plant Training.

Significant Issues

The In-Plant Training Program partially reimburses up to six months of training costs for manufacturing or service exporting companies that are relocating or expanding to New Mexico. In addition, the program funds existing New Mexico companies that are expanding and creating new jobs.

During the 2001 legislative session, the Legislature increased the appropriation to the Industrial Development training fund by 50 percent to $9 million. In FY01, the agency reports 36 projects constituting 3,308 jobs with an average wage of $10.38 per hour. This breaks down to an average of $13.20 per hour in the urban areas (1,436 jobs) and $8.39 per hour in the rural areas (1,872 jobs). For the current fiscal year (FY02), the agency reports 10 projects constituting 875 jobs with an average wage of $8.29 per hour. This breaks down to an average wage of $17.12 per hour in urban areas (38 jobs) and $7.89 per hour in rural areas (837 jobs).

Of the active projects, 19 contracts have reached the established end date, which is one year after the original contract date. These 19 projects have an unexpended balance of $3,217.1; however the agency only reports $1,832.8 of available funds remaining unobligated as of January 2002. Although the policies of the program state that the reimbursement is limited to 1040 hours, or six months, of training, these projects have been ongoing for well over one year. In total (41 projects), $11,980.1 out of $18,944.8, or 63.2 percent, of active contract funding remains unexpended.

FISCAL IMPLICATIONS

The appropriations of $6,000.0 and $15,000.0 contained in this bill are recurring expenses to the general fund. Any unexpended or unencumbered balance remaining at the end of any fiscal year shall not revert to the general fund. The appropriation contains an emergency clause.

RELATIONSHIP

As introduced, House Bill 2 and Senate Bill 1 contain $2,000.0 within the Economic Development Department’s operating budget for the In-Plant Training Program to be transferred from the Temporary Assistance for Needy Families (TANF) block grant to reimburse employers’ training of individuals from working families.

The bill also relates to House Bill 7 and Senate Bill 142 which contain a $15,000.0 appropriation for both fiscal years 2002 and 2003.

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