NOTE:  As provided in LFC policy, this report is intended only for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used for other purposes.

 

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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:

01/28/03

 

HB

 

 

SHORT TITLE:

Manufacturing Extension Services

 

SB

11

 

 

ANALYST:

Padilla

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

FY03

FY04

 

 

$400.0

 

 

 

Recurring

General Fund

 

 

 

 

 

 

(Parenthesis ( ) Indicate Expenditure Decreases)

 

Duplicates HB 88

 

SOURCES OF INFORMATION

LFC Files

 

Responses Received From

Economic Development Department

 

SUMMARY

 

     Synopsis of Bill

 

Senate Bill 11 appropriates $400.0 from the general fund to the Economic Development Department for expenditure in fiscal years 2003 and 2004 for the purpose of contracting for manufacturing extension services.  Expenditure of the funds is contingent on the receipt of an unspecified amount of funds from the National Institute of Standards and Technology (NIST) for a NIST-approved manufacturing center in New Mexico.  The bill contains an emergency clause.

 

     Significant Issues

 

The only NIST-approved center for manufacturing extension services in New Mexico is the New Mexico Manufacturing Extension Partnership (MEP). The MEP is part of a nationwide system of centers intended to assist small manufacturers to become more competitive.  According to EDD, NIST supports the MEP network and provides funds at a one-third match.  The bill, however, does not specify the level of NIST contributions. 

 

FISCAL IMPLICATIONS

 

The appropriation of $400.0 contained in this bill is a recurring expense to the general fund.  Any unexpended or unencumbered balance remaining at the end of fiscal year 2004 shall revert to the general fund.

 

ADMINISTRATIVE IMPLICATIONS

 

EDD believes there may be administrative implications to the agency for administration of the contract.  In FY01, when EDD last managed a contract with the MEP, the agency did not have sufficient resources to conduct what it felt was an adequate audit.  Via spot checks, EDD found two significant issues:  1) the MEP invoiced the department for services that were specifically excluded by the contract, and 2) the MEP initially invoiced the department for a 20 percent “management fee” on all the services it provided to small businesses.

 

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

 

Senate Bill 11 duplicates House Bill 88

 

OTHER SUBSTANTIVE ISSUES

 

According to EDD, the New Mexico MEP is managed by a Maine-based non-profit organization called MEP/MSI.  The New Mexico MEP pays a fee to MEP/MSI for its services.  EDD believes this arrangement is not ideal and does not allow for the best use of MEP resources in New Mexico. 

 

LP/prr