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

SPONSOR Grubesic

DATE TYPED 02/14/05 HB

SHORT TITLE Employee Lease Contractor Licenses and Fund

SB 596

ANALYST Ford

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

Indeterminate*

Employee Lease

Act Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

REVENUE

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY05

FY06

Employee Lease

Act Fund

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

SUMMARY

Synopsis of Bill

Senate Bill 596 creates the employee leasing act fund, a non-reverting special fund that shall be

administered by the Regulation and Licensing Department (RLD) and shall be appropriated for

the purpose of carrying out the provisions of the Employee Leasing Act.

Senate Bill 596 also revises the bonding requirements for employee leasing contractors. Under

current law, contractors registered in New Mexico as of September 30, 1993 shall maintain a

surety bond of $25 thousand whereas contractors registered after that date must maintain a surety

bond of $100 thousand. This bill would remove the provisions for contractors registered as of

September 30, 1993, thus requiring all employee leasing contractors to maintain the same level

of surety bond at $100 thousand. The bill also changes references to contractors “domiciled and

registered” in the state to simply “registered.”

Senate Bill 596 -- Page 2

FISCAL IMPLICATIONS

The indeterminate appropriation contained in this bill is a recurring expense to the employee

leasing act fund. Any unexpended or unencumbered balance remaining at the end of any fiscal

year shall not revert to any other fund.

Continuing Appropriations

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.

OTHER SUBSTANTIVE ISSUES

This bill may result in more employee leasing contractors having to maintain surety bonds or

having to maintain higher levels of surety bonds.

EF/lg