Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports if they are used for other purposes.

 

Current FIRs (in HTML & Adobe PDF formats) are available on the NM Legislative Website (legis.state.nm.us).  Adobe PDF versions include all attachments, whereas HTML versions may not.  Previously issued FIRs and attachments may also be obtained from the LFC in Suite 101 of the State Capitol Building North.

 

 

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

 

 

 

SPONSOR

Salazar

DATE TYPED

2/10/04

HB

387

 

SHORT TITLE

Small Business Investment Council Definitions

SB

 

 

 

ANALYST

Gilbert

 

REVENUE

 

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY04

FY05

 

 

See Narrative

Recurring

General Fund

 

($10,000.0)

˝% STPF

Recurring

Severance Tax Permanent Fund

(Parenthesis ( ) Indicate Revenue Decreases)

 

SOURCES OF INFORMATION

 

LFC Files

 

Responses Received From

State Investment Council (SIC)

Economic Development Department (EDD)

 

SUMMARY

 

Synopsis of Bill

 

House Bill 387 amends §7-27-5.15 NMSA 1978 (Laws 1990, Chapter 126, Section 5) to increase Small Business Investment Corporation (SBIC) funding from the Severance Tax Permanent Fund (STPF) from one-fourth percent to one-half percent of STPF market value.

 

§58-29-3 NMSA 1978 (Laws 2000, Chapter 97, Section 5) is amended to clarify the definitions of a “corporation’s board and “New Mexico business,” and adds a new definition for “cooperative agreement” as follows:

 

"cooperative agreement" means an agreement entered into by the corporation with a party that:

 

                (1) has demonstrated the capability to provide business assistance to new and expanding businesses; and

 

                (2) is primarily engaged or proposes to primarily engage in the business of providing business services and debt or equity capital to new and expanding businesses;

 

HB 387 amends the section pertaining to permitted equity investments (§58-29-5.1 NMSA 1978 (Laws 2003, Chapter 399, Section 9), to remove certain restrictions on SBIC investments in organizational entities that are parties to cooperative investment agreements.

 

This bill also clarifies language which pertains to restrictions on investments in pooled funds, when such entities are parties to cooperative investment agreements.

 

Significant Issues

 

Implementation of this bill will increase capital available to the SBIC by approximately $10 million each year.

 

FISCAL IMPLICATIONS

 

This bill increases SBIC funding from the Severance Tax Permanent Fund (STPF) from one-fourth percent to one-half percent of STPF market value, or an incremental increase of approximately $10 million each year.

 

Long-term revenue to the general fund may increase due to new business creation and future job growth in New Mexico.

 

OTHER SUBSTANTIVE ISSUES

 

According to the Economic Development Department (EDD), expansion of the Small Business Investment Corporation, through increased STPF funding, and expansion of the types of businesses funded (sole proprietorship and partnerships) will increase the ability of the SBIC to promoting business development in the state.

 

 

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