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

SPONSOR Stewart

ORIGINAL DATE

LAST UPDATED

2-7-06

2/12/06 HB 483

SHORT TITLE

CREATE UNEMPLOYMENT INSURANCE TASK

FORCE

SB

ANALYST Lucero

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

$10.0

Non-Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Labor Department (LD)

Department of Finance and Administration (DFA)

SUMMARY

Synopsis of Bill

House Bill 483 appropriates $10.0 from the general fund to the Legislative Council Service to

create an unemployment insurance task force to examine the existing program of unemployment

insurance New Mexico. The task force will examine:

1) The requirements of federal law,

2) The adequacy of the contribution levels for employers,

3) The reasonableness of the statutory structure for adjusting contribution levels,

4) The adequacy of existing benefits and alternatives to expand and improve upon

those benefits

5) The actuarial soundness of the unemployment compensation fund and alternatives

for reimbursing or crediting excess amounts to employers.

The task force will report its findings and recommendations to the first session of the forty-

eighth legislature no later than December 31, 2006.

House Bill 483 appropriates $10.0 from the general fund to the Legislative Council Service for

the purpose of paying per diem and mileage and other expenses of the unemployment insurance

task force.

House Bill 483 – Page 2

FISCAL IMPLICATIONS

The (multi-year) appropriation of $10.0 contained in this bill is a non-recurring expense to the

general fund. Any unexpended or unencumbered balance remaining at the end of fiscal year

2007 shall revert to the general fund.

This bill declares an emergency for the public peace, health and safety.

SIGNIFICANT ISSUES

The Office of Workforce Training and Development (OWTD) is not included in the task force.

OWTD should be involved in the discussion of “adequacy of existing benefits and alternatives to

expand and improve upon those benefits”. Perhaps in lieu of a cash benefit, the unemployed can

receive job training.

Employer taxes affect the overall business climate of the state. The Economic Development De-

partment (EDD) should be a member of the task force.

The task force does not include a labor representative from the Native American Tribes.

ADMINISTRATIVE IMPLICATIONS

$10.0 is appropriated from the general fund to the Legislative Council Service for the purpose of

paying per diem and mileage and other expenses of the unemployment insurance task force.

The cost of running special reports, programming, and actuarial analysis may require more than

$10.0.

TECHNICAL ISSUES

The Department of Labor would also request that a member of the U.S. Department of Labor be

involved in this task force as well. This is a federal program, which requires federal conformity.

A 2005 legislative bill to create an unemployment insurance task force bill was vetoed last ses-

sion.

OTHER SUBSTANTIVE ISSUES

Employers in New Mexico face a myriad of regulations governing the workplace, many of which

unnecessarily drive up the cost of doing business. Most all employers support safe working con-

ditions and programs that protect their employees. However, workforce legislation concerning

workers' compensation, unemployment insurance, and minimum wage increases hampers the

ability of employers to expand their workforce or re-invest in their businesses. This is an eco-

nomic development issue.

House Bill 483 – Page 2

ALTERNATIVES

The Labor Secretary can call for and convene a task force at any time to accomplish the same

thing called for in this bill. The Secretary of Labor has expressed his willingness to convene

such a taskforce during the spring of 2006.

DL/mt