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

SPONSOR Campos

DATE TYPED 1/25/05

HB

SHORT TITLE Development Training Fund Selection Criteria

SB 7

ANALYST Dunbar

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

See Narrative

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to HB 8

Conflicts with HB 98

SOURCES OF INFORMATION

Responses Received From

Department of Labor (DOL)

Economic Development Department (EDD)

Office of Workforce Training and Development (OWTD)

Division of Vocational Rehabilitation (DVR)

SUMMARY

Synopsis of Bill

Senate Bill 7 amends 21-19-7 NMSA 1978 as follows:

:

•

Transfers administration of the Development Training Funds from the Economic Devel-

opment Department to the Labor Department.

•

Prescribes selection criteria for the award of these funds to be used by the industrial train-

ing board.

•

Adds film and multi-media production companies as eligible recipients but does not re-

quire that filming take place in New Mexico.

•

Removes the requirement that the project will employ more than fifteen hundred employ-

ees.

Senate Bill 7-- Page 2

•

Removes the requirement that no less than fifty percent of the project’s workforce shall

be residents of New Mexico.

•

Adds requirement restricting part-time jobs to no more than ten percent of the project.

The Economic Development Department has administered the Industrial Training Program

which is also known as the Job Training Incentive Program since 1997 when full fiscal responsi-

bility was transferred from the State Department of Education.

Significant Issues

The Economic Development Department, whose responsibility is to create jobs by growing ex-

isting businesses and/or recruiting new businesses to New Mexico, uses the Industrial Develop-

ment Training Program as its primary recruitment/incentive tool. EDD indicates that the pro-

gram is often the deal breaker when a company is considering a relocation decision over other

competing states. The Economic Development Department is the initial and often the sole con-

tact for corporate decision makers.

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 taxpayer money. OWTD is also concerned that the program does not have a coor-

dination requirement with the State Workforce Investment Board and Local Workforce Devel-

opment Boards’.

PERFORMANCE IMPLICATIONS

The bill establishes rigorous wage/benefits and retention/promotion requirement that companies

must meet to be eligible as a recipient of funds. In addition the bill requires companies to target

hard-to-employ persons.

FISCAL IMPLICATIONS

No appropriation is contained in the bill. The bill does not provide for administrative funding or

for the transfer of already existing FTE’s from Economic Development to Department of Labor.

There is an un-obligated balance in the fund of $12.8 million.

ADMINISTRATIVE IMPLICATIONS

DOL indicates that it will require the addition of three (3) FTE to administer this program.

TECHNICAL ISSUES

DVR suggests including persons with disabilities in the criteria of targeted hard-to-employ per-

sons and including a representative who is knowledgeable about the state’s vocational rehabilita-

tion programs on the Industrial Training Board.

Senate Bill 7-- Page 3

CONFLICT, RELATIONSHIP

Conflicts with HB 98, Page 19, Section 10- name of the agency is Office of Workforce Training

and Development. HB 98 deletes all reference in existing law to the job training division.

Relates to HB8 which appropriates twenty million dollars from the general

fund for this program.

ALTERNATIVES

In order to be consistent with HB 98, the bill could be amended to transfer the Development and

Training fund to the OWTD.

POSSIBLE QUESTIONS

Will the industrial development board have a duty of consultation with the State Workforce De-

velopment Board and Local Workforce Development Boards when projects are considered for

funding under this program.

Should film and multi-media production companies be required to produce films in New Mexico

as condition of eligibility for funding under this program.

BD/lg:yr