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:

Picraux

 

DATE TYPED:

2/5/03

 

HB

319

 

SHORT TITLE:

Expand UNM Manufacturing Engineering Program

 

SB

 

 

 

ANALYST:

L. Baca

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

FY03

FY04

 

 

 

$320.0

 

 

Recurring

GF

(Parenthesis ( ) Indicate Expenditure Decreases)

 

REVENUE

 

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

 

 

 

 

Significant

 

Recurring

Federal

 

 

 

 

 

(Parenthesis ( ) Indicate Revenue Decreases)

 

HB 319 is similar to SB 257

 

Relates to Appropriation for the University of New Mexico in the General Appropriation Act

 

SOURCES OF INFORMATION

 

Responses Received From

Economic Development Department (EDD)

Commission on Higher Education (CHE)

 

SUMMARY

 

     Synopsis of Bill

 

House Bill 319 appropriates $320.0 from the general fund to the Board of Regents of the University of New Mexico to expand the manufacturing engineering program (MEP).

 

     Significant Issues

 

The EDD reports that this $320,000 incremental appropriation request is for operational monies to operate the significant infrastructure investments in the facility (often referred to as the cleanroom or MTTC). This facility was built with $6 million from sources other than state appropriations and was equipped with $6 million in equipment donations by private companies. The state legislature has made capital appropriations for a total of $2.5 million in 1998, 2000, and 2002.

 

The EDD also reports that this facility provides a pipeline for a substantial number of high wage workers (200-300 per year) into the New Mexico economy to work in private companies in the state.

 

In addition, states the EDD analysis, the cleanroom needs to be completed as soon as possible to be a complete resource to the University of New Mexico and to local companies in the state’s emerging high tech industry. This cleanroom is a major part of the region’s technology business and industry development infrastructure to create high-tech, high-wage jobs in New Mexico. Sandia, Next Generation Economy, AED, Intel, and other organizations are very supportive of the facility.

 

This cleanroom proposal leverages significant federal dollars to match the state’s dollars as well as significant private sector equipment donations as is demonstrated by a $4.0 million of equipment donations pending from the private sector sometime in February, according to EDD.

 

Completing the facility will also enable UNM to provide greater assistance to the private sector and become more competitive for federal grants in micorsystems and biotechnology.

 

FISCAL IMPLICATIONS

 

The appropriation of $320.0 is 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.

 

According to the CHE, the bill appropriates $320,000 for expansion of the MEP.  According to the proposal submitted to the CHE, the expenditures would be made according to the following breakdown (which is in addition to their base funding of $425,800):

 

Salaries (1.0 FTE)

$76,000

Fringe Benefits

18,200

Supplies

170,800

Travel

0

Equipment

55,000

Other:  (specify)

0

 

 

TOTAL

$320,000

 

RELATIONSHIP

 

HB 319 is essentially the same as SB 257; only the wording in the two bills differs.

 

OTHER SUBSTANTIVE ISSUES

 

According to the CHE, UNM submitted an expansion request of $320,000 for the MEP.  This request was ranked 3rd out of 12 research and public service expansion items submitted to the Commission on Higher Education (CHE) by UNM.  This program was not recommended for expansion by the CHE. 

 

AMENDMENTS

 

The CHE suggests the following language for all new recurring higher education programs and expansion of current programs (assuming that funding will continue beyond 2002-2003):

 

“The institution receiving the appropriation in this bill submit a program evaluation to the Legislative Finance Committee and the Commission on Higher Education by August 2005 detailing the benefits to the State of New Mexico from having implemented this program over a three period.”

 

LB/njw:sb