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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 2/1/05

HB 367

SHORT TITLE Film Business Incubator Program

SB

ANALYST Rosen

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

$10,000.0

Indeterminate Indeterminate Recurring General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates SB446

SOURCES OF INFORMATION

LFC Files

Responses Received From

Economic Development Department (EDD)

Office of Workforce Training and Development (OWTD)

Public Education Department (PED)

No Responses Received From

Office of the Governor (OG)

Department of Labor (DOL)

SUMMARY

Synopsis of Bill

House Bill 367 appropriates $10 million from the general fund to EDD for expenditure in FY05

and FY06 the purpose of financing a pilot film business incubator for apprenticing New Mexico

resident workforce training students of film and digital media.

Significant Issues

It is not clear how this incubator integrates with the governor’s Media Industries Strategy Project

(MISP). $6 million of $10 million in capital outlay approved last year has already been diverted

House Bill 367 -- Page 2

from a “film production education and training center” to University of New Mexico, New Mex-

ico State University and Santa Fe Community College for various MISP-approved educational

programs.

Furthermore, various entities, including the Office of the Governor, EDD, Tourism Department

and OWTD, appear to play potentially conflicting roles in the development and training of stu-

dents of film and digital media and it is not clear how EDD management of this incubator would

relate to other agencies’ film training and development efforts.

If the purpose of the bill “apprenticing New Mexico resident workforce training students of film

and digital media” is for the procurement of training for future workers in the industry then

OWTD should have responsibility for coordinating the workforce training of students of film and

digital media.

PERFORMANCE IMPLICATIONS

OWTD notes there are no performance measures or targets for the film business incubator and

there is no requirement for U.S. Department of Labor Bureau of Apprenticeship (BAT) approval

of the apprenticeship training program.

FISCAL IMPLICATIONS

The appropriation of $10 million contained in this bill is a recurring expense to the general fund.

Any unexpended or unencumbered balance remaining at the end of FY06 shall revert to the gen-

eral fund.

EDD indicates this bill could have enormous fiscal impact on the EDD budget if the pilot pro-

gram requires ongoing funding.

ADMINISTRATIVE IMPLICATIONS

EDD indicates passage of this bill will generate significant additional administrative support re-

quirements for the department.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Duplicates SB446

TECHNICAL ISSUES

OWTD indicates the term “workforce training students” is unclear as to whom the target popula-

tion is to be served.

OTHER SUBSTANTIVE ISSUES

Despite EDD Film Office’s role in helping to bring film productions to New Mexico, there is no

single point of coordination for all state-related film industry activities. Multiple executive

agencies continue to pursue independent film industry initiatives and make independent requests

for funding for potentially duplicative programs.

House Bill 367 -- Page 3

ALTERNATIVES

If the intent of this bill is train New Mexico students the appropriation could be made to OWTD

for integration with its other workforce training activities.

If the intent of this bill is to incubate new film businesses in New Mexico the appropriation could

be made to the State Investment Council for integration with its other film industry investment

activities.

JR/yr