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

SPONSOR Stewart

DATE TYPED 1/27/05

HJM 11

SHORT TITLE Study Effectiveness of Various Departments

SB

ANALYST Rosen

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

NFI

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to Appropriation in the General Appropriation Act

SOURCES OF INFORMATION

LFC Files

No Responses Received From

Taxation and Revenue Department (TRD)

State Investment Council (SIC)

Department of Finance and Administration (DFA)

Economic Development Department (EDD)

Labor Department (LD)

New Mexico Municipal League (NMML)

New Mexico Association of Counties (NMAC)

SUMMARY

Synopsis of Bill

House Joint Memorial 11 requests TRD and EDD convene a task force to study the effectiveness

of the state’s economic development incentives, designates representatives on the task force from

TRD, EDD, DFA, LD, SIC, LFC, NMML, NMAC and a private sector development expert, de-

fines the task force’s duties and obligations, and directs the task force to report its findings to the

governor, LFC, House Revenue Stabilization and Tax Policy Committee, and any other legisla-

tive committee charged with studying economic development before November 30, 2005.

Significant Issues

EDD and TRD have been unable to provide accurate analysis of the impact of existing and future

House Joint Memorial 11 -- Page 2

tax incentives, rebates and credits related to economic development. LFC budget recommenda-

tions for EDD in FY05 and FY06 included funding and authorization for EDD to add an econo-

mist to the agency to assist in this analysis. FY05 funding and authorization for an EDD econo-

mist was vetoed by the governor. EDD indicates FY06 funding and authorization for an EDD

economist is not required until the results of this task force’s study are complete.

PERFORMANCE IMPLICATIONS

This memorial creates a formal process and a finite time frame for legislative and executive

agreement on key terms, measures and methodologies for accurately assessing the impact of ex-

isting and future economic development incentives.

FISCAL IMPLICATIONS

There is no fiscal impact associated with this memorial.

ADMINISTRATIVE IMPLICATIONS

While most task force members have economists on staff to provide necessary expertise to the

task force, EDD does not have an economist on staff to assist the task force in its complex in-

formation gathering, modeling, and analysis work.

JR/yr