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

SPONSOR Trujillo

ORIGINAL DATE

LAST UPDATED

1/26/06

HB 237

SHORT TITLE Minority and Small Business Owner Services

SB

ANALYST Earnest

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

$500.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY06

FY07

FY08 3 Year

Total Cost

Recurring

or Non-Rec

Fund

Affected

Total

($0.1)

($0.1)

($0.1) Recurring General

Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Office of Workforce Training and Development (OWTD)

Economic Development Department (EDD)

SUMMARY

Synopsis of Bill

HB 237 appropriates $500,000 from the general fund to the Economic Development Department

to fund a pilot program that provides outreach training and mentoring services to minority and

immigrant small business owners and entrepreneurs in Santa Fe and San Miguel Counties.

House Bill 237 – Page

2

FISCAL IMPLICATIONS

The appropriation of $500,000 contained in this bill is a recurring expense to the general fund.

Any unexpended or unencumbered balance remaining at the end of FY07 shall revert to the gen-

eral fund.

By establishing a pilot program, this legislation would likely have an administrative impact on

the Economic Development Department

SIGNIFICANT ISSUES

According to EDD, this pilot program would help entrepreneurs develop solid business practices,

such as tax reporting and compliance with health and safety regulations, eliminate language bar-

riers, and promote the sale of goods and services indigenous to Northern NM. The Economic

Development Department fosters a sustainable rise in our state’s production of goods and ser-

vices, from micro, small and large businesses alike.

EDD currently works with a number of small business service organizations, whether they are

non-minority, minority or immigrant owned. Through the EBS Initiative alone, a number of ser-

vice organizations exist that provide all business owners with counseling, entrepreneurial educa-

tion, financing, training, and mentoring services. EDD partners with service organizations such

as NMSBDC, WESST Corp, Accion NM, and the NM Community Development Loan Fund to

assist NM business owners.

The OWTD notes that the bill is silent concerning coordination with such local small business

development centers and associations that currently specialize in such providing such assistance

to all small business owners.

ADMINISTRATIVE IMPLICATIONS

OWTD indicates that EDD would need to dedicate staff to administer the program, and likely

would need to take a percentage of the appropriation to support these staff activities and other

associated and related tasks and costs.

EDD could establish a contractual agreement with an entity or organization outside of the de-

partment to run such program, which would reduce the administrative impact. However, the de-

partment would lose most oversight of the program.

The costs associated with outreach could include publications, travel, presentations, interpreta-

tion/translation services, and marketing tools/programs.

OTHER SUBSTANTIVE ISSUES

According to the OWTD, some of the same services are currently available through post-

secondary educational institutions and small business development centers. Such coordination

could prevent duplication of services and maximize all available resources to provide additional

services to business owners and entrepreneurs.

House Bill 237 – Page

3

ALTERNATIVES

OWTD suggests the funding could be directed to existing state-funded programs, specific to

Santa Fe & San Miguel Counties, with the stipulation that a specific number of clients must be

assisted. OWTD notes that although these services exist, agencies find it difficult to fund costs

associated with outreach, advertising, workshop development. These funds would be more useful

for that purpose alone.

BE/nt