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

 

 

 

SPONSOR:

Varela

 

DATE TYPED:

2/22/03

 

HB

493

 

SHORT TITLE:

Economic Development Corporation Act Money

 

SB

 

 

 

ANALYST:

Padilla

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

FY03

FY04

 

 

 

$3,000.0

 

 

Recurring

General Fund

 

 

 

 

 

 

(Parenthesis ( ) Indicate Expenditure Decreases)

 

Companion to HB 494

Duplicates some provisions of HB 589

Relates to Appropriation in the General Appropriation Act

 

SOURCES OF INFORMATION

 

LFC Files

 

Responses Received From

Economic Development Department

Department of Finance and Administration

Attorney General

 

SUMMARY

 

     Synopsis of Bill

 

House Bill 493 appropriates $3,000.0 from the general fund to the Economic Development Department for the purpose of contracting with a new non-profit corporation to carry out activities related to economic development.  The appropriation is contingent upon the enactment into law of the Economic Development Corporation Act.

 

The bill exempts the contract from the provisions of the Procurement Code.

 

     Significant Issues

 

1.  DFA notes that the Governor’s initiative is for this appropriation to be available in fiscal year 2003.  However, the bill does not contain an emergency clause that would allow spending in the current fiscal year.

 

2.  The bill stipulates that the contract between EDD and the new corporation shall contain reporting requirements to ensure that the contract furthers the purposes of the Economic Development Corporation Act.  EDD reports that the contract will be performance-based, with deliverables to include leads, prospects and signed deals in both rural and urban communities.  EDD notes that performance of the corporation will be measured as follows:

 

·        Increased leads generation

·        Increased trade show leads

·        Increase in direct inquires and exposures

·        Increase in earned media

·        Increase in web traffic

 

FISCAL IMPLICATIONS

 

The appropriation of $3,000.0 contained in this bill is a recurring expense to the general fund. Any unexpended or unencumbered balance remaining at the end of fiscal year 04 shall revert to the general fund.

 

EDD’s FY03 general fund budget is $6,001.5.

 

ADMINISTRATIVE IMPLICATIONS

 

This will be a large contract for EDD to manage.  EDD reports, however, that this bill will result in only a minimal increase in administrative functions for the department.

 

RELATIONSHIP

 

This bill is the companion to HB 494, “Economic Development Corporation Act,” which establishes a new non-profit corporation to carry out activities related to economic development.

 

Another bill, HB 589, also enacts the Economic Development Corporation Act and it includes a $3,000.0 appropriation from the general fund.

 

Either HB 494 or HB 589 would create the Economic Development Corporation.

 

This bill relates to the EDD appropriation in the General Appropriation Act.  The LFC general fund recommendation for FY04 is $5,820.7.

 

LP/njw