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 a vailable on the NM Legislative Website (legis.state.nm.us).

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

SPONSOR Carraro

DATE TYPED 2/04/05

HB

SHORT TITLE Create Military Assistance Fund

SB 490

ANALYST Peery

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

$5,000.0

Recurring General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

REVENUE

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY05

FY06

$5,000.0

Recurring Military Assistance

Fund

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

Response Received From

Department of Veterans Services (DVS)

No Responses

State Treasurer (ST)

Department of Military Affairs (DMA)

SUMMARY

Synopsis of Bill

Senate Bill 490 appropriates $5,000.0 from the general fund to the newly created Military Family

Assistance Fund to provide low-interest loans to New Mexico residents who are members of the

armed forces of the United States who are serving on active duty and to their spouses.

Senate Bill 490 -- Page 2

FISCAL IMPLICATIONS

The appropriation of $5,000.0 contained in this bill is a recurring expense to the general fund.

Any unexpended or unencumbered balance remaining at the end of a fiscal year shall revert to

the general fund.

This bill creates a new fund and provides for continuing appropriations. The LFC objects to in-

cluding continuing appropriation language in the statutory provisions for newly created funds.

Earmarking reduces the ability of the legislature to establish spending priorities.

ADMINISTRATIVE IMPLICATIONS

Department of Veteran Services reports they would need two FTEs to administer the program.

TECHNICAL ISSUES

Department of Veterans Services states the proposed legislation is unclear as to whether they

would need to adopt a rate of interest similar to the federal prime rate. Also, they state the bill

does not state whether any collateral is needed in the event of a loan default.

ALTERNATIVES

Since the proposed legislation refers to members of the armed forces of the United States who

are serving on “active” duty and to their spouses, it may be more efficient for the Department of

Military Affairs to administer the program. The Department of Veterans Services deals with re-

tired armed forces members.

RLP/sb:yr