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).

Adobe PDF versions include all attachments, whereas HTML versions may not. Previously issued FIRs and

attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

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

SPONSOR Griego

DATE TYPED 3/10/05

HB

SHORT TITLE Raise Food Sanitation Act Permit Fees

SB

328/aSFC

ANALYST Hadwiger

APPROPRIATION

(in $000s)

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

See Narrative

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates HB455.

SOURCES OF INFORMATION

LFC Files

Comments received from:

Department of Environment (NMED)

SUMMARY

Synopsis of SFC Amendment

The amendment removes the continuing appropriation in the original bill.

Synopsis of the Original Bill

Senate Bill 328 would allow the Environmental Improvement Board to increase fees for issuance

and renewal under the Food Service Sanitation Act such that no fee would be less than $100.00

or more than $200.00 annually for a food service establishment with not more than a $25.00 in-

cremental increase per fiscal year. Currently, statute sets the minimum at $75.00 and the maxi-

mum at $100.00 annually for a food service establishment and sets no maximum rate of increase.

The bill would also appropriate funds from the Food Service Sanitation Fund to the Department

of Environment (NMED)

Significant Issues

According to NMED, the $100.00 current limitation on food permit fees allows the Department

Senate Bill 328/aSFC -- Page 2

to collect about one third of the cost of permitting and inspecting food service establishments in

the state. All neighboring states presently have higher food permit fees than what New Mexico

is requesting. The City of Albuquerque, who inspects food service establishments within the city

limits, currently has a maximum permit fee of $350. Currently only one inspection per year oc-

curs at restaurant establishments. One inspection per establishment per year in addition to the

many temporary food permits that the Department issues for special events such as county fairs,

Indian Market, and the State Fair is not as protective of public health as other states provide to its

citizens and tourists, especially for high risk establishments.

This original bill provided for continuing appropriations. The Legislative Finance Committee

objects to including continuing appropriation language in the statutory provisions for newly cre-

ated funds. Earmarking reduces the ability of the legislature to establish spending priorities. The

SFC amendment removed the continuing appropriation.

PERFORMANCE IMPLICATIONS:

According to NMED, SB328 will facilitate the agency’s capacity to collect additional fees, sub-

sequent to EIB approval, and will enhance future performance measures. For example, the cur-

rent performance measure for FY05 requires the Field Operations Division to perform one an-

nual inspection per year for each restaurant facility. However, in many instances this is not suf-

ficient, especially for the high risk facilities that are frequented by many patrons. Currently, due

to budgetary and staff constraints, NMED has not identified food facilities that pose a high risk

and require more frequent inspections than once a year. Additional fee revenues are needed to

implement this Risk Based Food Establishment Inspections Program, which will have a definite

positive impact by reducing the probability of serious food-borne illness outbreaks and provide

better protection to persons in New Mexico. Additional fee revenues will allow NMED to en-

hance the current program, provide greater food service personnel training, continue and provide

more public outreach programs, implement a high risk inspection program and antiterrorism pro-

tection.

FISCAL IMPLICATIONS

NMED indicates there are no recurring costs or additional revenues needed from general funds

directly occurring from the passage of this bill. A future increase of $25 in the permit fee would

generate approximately $160,000 in revenues per year.

ADMINISTRATIVE IMPLICATIONS: Additional revenues collected will allow for addi-

tional employees to assess, classify and conduct increased food safety and compliance inspec-

tions and implement the High Risk Based Food Establishment Inspection program. Environ-

mental Improvement Board approval will be required to raise the permit fees, which may take a

few months. In FY06, the assessment and classification of the facilities can be completed with

increased inspections of high-risk food facilities starting in FY07. Current staff will absorb the

additional tasks of review of the food establishments for risk classification. This will also pro-

vide administrative directive for implementing training and outreach education to the regulated

industry and public.

OTHER SUBSTANTIVE ISSUES:

According to NMED, in December 2004, NMED responded to a major food borne illness out-

Senate Bill 328/aSFC -- Page 3

break in Alamagordo in which 93 people became violently ill. Additional revenues will aid the

Department to provide greater sampling and protection to better determine the source of the

food-borne outbreaks and prevent and eliminate the source, whether it is Salmonella, C.

Botulinum, Escherichia Coli, or Campylobacter. Inspecting and permitting all food service es-

tablishments in the state is both a performance efficiency measure and required by law. In-

creased fees would aid the Department’s ability to implement significant improvements to the

overall food sanitation program for public safety and protection and provide for additional in-

spections for high risk facilities.

NMED indicates that the food program must develop and implement a bioterrorism emergency

response plan to aide New Mexicans in the event of an emergency or terrorist attack. The addi-

tional funds in SB328 will support a high risk as well as an antiterrorist

program.

DH/sb:yr