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

SPONSOR Lujan, B

DATE TYPED 2/14/2005 HB 517

SHORT TITLE Development Training Program Funding

SB

ANALYST Dunbar

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

See Narrative See Narrative

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to HB8; HB367

Conflicts with SB7

SOURCES OF INFORMATION

LFC Files

Responses Received From

Division of Vocational Rehabilitation (DVR)

Department of Labor (DOL)

Economic Development Department (EDD)

NM Public Education Department (NMPED)

Office of Workforce Training and Development (OWTD)

SUMMARY

Synopsis of Bill

House Bill 517 amends Section 21-19-7 NMSA 1978 to provide additional funds to the Eco-

nomic Development Department for skill enhancement training and pre-employment training

program for film and multimedia production companies.

The bill contains an emergency clause.

The Economic Development Department’s web site identifies the Job Training Incentive Pro-

gram (JTIP) as the funding provided under Section 21-19-7. The bill will allow EDD to use Job

Training Incentive Program to provide New Mexicans with the necessary training to work on

film and production crews in the state.

House Bill 517 Page 2

In Section 21-19-7, skill-enhancement training is added. Film and multimedia production com-

panies and a pre-employment training program for the film and multimedia industry are in-

cluded. The bill clarifies that the Public Education Department’s (PED) director of the voca-

tional education shall be a member of the Industrial Training Board, which will include the direc-

tor of the Governor’s Office of Workforce Training and Development. The board is expanded to

include an employee of the Department of Labor. The one-year New Mexico residency require-

ment for training applicants is changed to “at any time” instead of immediately prior to the

commencement of the training program, and the residency waiver provisions are deleted.

In Section 21-19-7-1, the rules for development funding for film and multimedia production

companies are changed to include personnel who have participated in on-the-job training. The

section specifies that previously required information from those companies will now be pro-

vided to the New Mexico Film Division of the Economic Development Department. The re-

sponsibility for approval and reimbursement and the establishment of a film and multimedia pre-

employment training program are assigned to the Film Division. Furthermore, the Film Division

shall establish a film and multimedia pre-employment training program and adopt rules imple-

menting the program.

This bill allows for a number of administrative changes to the JTIP program in addition to the

provision for Film Training. Reference is made to “fiscal implications” below.

Significant Issues

OWTD notes that the bill allows training dollars to be spent on non-residents of New Mexico

and permits New Mexico film and multi-media companies to produce films in other states with

New Mexico funds. On the other hand, enactment of HB517 would relieve potential employees

of the residency requirement

.

FISCAL IMPLICATIONS

Although the title of the bill includes the phrase “Making an Appropriation,” in fact the bill con-

tains no appropriation for the Development Training Program, also known as the Job Training

Incentive Program. However, the bill would, upon an appropriation being made to the program

in the General Appropriation Act (a contingency in the bill), enact into law certain statutory re-

quirements that would govern appropriations made to the program.

This bill will provide funding for the Development Training Programs, which enhances the Job

Training Incentive Program (JTIP) to allow skills upgrade training for existing employees, and

also allows for pre-employment training for the film and multimedia industry

The bill adds a new Section 3 that specifies distributions of development training funds as fol-

lows:

•

Up to two-thirds shall be expended in urban communities and one-third expended in non-

urban communities

•

Up to $50,000 shall be used to generally administer the program

•

Up to $50,000 shall be used to generally administer the program as it relates to the film

and multimedia industry

•

Up to $2 million may be used to reimburse film and multimedia production companies

and to provide pre-employment training for that industry.

House Bill 517 Page 3

Currently, the unobligated balance for JTIP is $12.8 million.

ADMINISTRATIVE IMPLICATIONS

The bill will allow available funds from previous appropriations to be used for administrative

purposes (fifty-thousand dollars to generally administer the development training programs and

fifty-thousand dollars to administer the provisions of the film training program).

CONFLICT, RELATIONSHIP

Conflicts with SB 7, Page 1, Section 1, 21-19-1-which identifies the labor department as the

agency responsible for the administration of these funds.

Relates to HB 8 which appropriates twenty million dollars from the general fund to the develop-

ment training fund.

Relates to HB 367 which appropriates ten million dollars from the general fund to the economic

development department to finance pilot film business incubator for apprenticing New Mexico

resident workforce training students of film and multimedia.

TECHNICAL ISSUES

The “Vocational Education Division” is now the Career-Technical and Workforce Education Bu-

reau of the Instructional Support Division of the PED according to the agency’s reorganization

request recently approved by the State Personnel Office.

DVR suggests that the bill should require that training target hard-to-employ individuals includ-

ing people with disabilities and also accommodate a representative who is knowledgeable about

the state’s vocational rehabilitation programs on the Industrial Training Board.

The bill gives rule-making authority for the new film and multimedia program to the new film

division of the economic development department but it also requires the industrial development

board to develop rules for funding film and multimedia companies.

OTHER SUBSTANTIVE ISSUES

Data provided by EDD indicate:

•

JTIP assisted in the creation of 1,950 jobs in FY04 at an annual income of close to

$30,000/year ($28,246- actual/year; or $13.58/hour).

•

So far this year, JTIP assisted in the creation of 394 jobs at an average annual salary of

$31,470 (or $15.13/hour).

•

Rural communities which have had JTIP projects this year include: Espanola, Belen (2),

Taos (2), Santa Teresa, Anthony, Farmington, Las Vegas and Mora (2)

The New Mexico film industry has grown 1000% in the last two years – to a point where we are

announcing nearly one film every month. These films are being produced throughout the state –

Clovis, Portales, Silver City, Las Cruces, Albuquerque, Santa Fe, and inNorthern New Mexico.

House Bill 517 Page 4

Film Training Program data:

•

In FY04, the Film Training Program funded 8 projects for a total of $380,000 and 162

trained positions.

•

This Fiscal Year, the Film Training Program has funded an additional 8 projects for

approximately $300,000 and 109 trained positions.

The 2002-2003 Annual Report for the JTIP indicates that 54 businesses received funding from

this program. Of these, 43 were engaged in manufacturing and 11 were engaged in other types

of business pursuits. Two of the recipients were postsecondary institutions.

The New Mexico Film Office provides a Workforce Training Program that provides film train-

ing courses to New Mexico residents interested in entering this industry or intermediate crew

members looking to move up in their profession. Productions hiring graduates of these programs

qualify for a 50% wage reimbursement for each trainee hired. The program is for production

companies creating feature films, television programs, national commercials, documentaries,

music videos or public service announcements.

The Film Office also offers a mentorship program designed to offer a 50% wage reimbursement

to production companies who provide on-the-job training opportunities to New Mexico film

crew members who are ready to move up in job classification. Both programs will certify crew

members as "trainees," qualifying them for the JTIP.

BD/yr