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 Snyder

ORIGINAL DATE

LAST UPDATED

2/2/06

HB

SHORT TITLE Public Safety Finance Act

SB 572

ANALYST Kehoe

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

$100,000.0

Non-Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY06

FY08

FY09

$100,000.0

Non-Recurring Public Safety

Permanent Fund

($8,000.0)

Recurring Public Safety

Permanent Fund

$8,000.0

Recurring Public Safety

Assistance Fund

$6,800.0 Recurring

Public Safety

Assistance Fund

(PSAF)

(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

$58.5

$175.5 Recurring PSAF

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

New Mexico Finance Authority (NMFA)

New Mexico Corrections Department (NMCD)

Senate Bill 572 – Page

2

SUMMARY

Synopsis of Bill

Senate Bill 572 enacts a Public Safety Finance Act, creates a public safety permanent fund and a

public safety assistance fund for the purpose of providing public safety assistance to governmen-

tal entities. The funds would provide technology, vehicles and equipment to law enforcement,

fire departments and other first responders of qualifying entities, but shall not include operational

expenses or buildings. “Qualifying entities” are defined as state agency, county, municipality or

a recognized Indian nation, tribe or pueblo wholly or partially located in New Mexico.

FISCAL IMPLICATIONS

Senate Bill 572 appropriates $100 million from the general fund to the public safety permanent

fund for distribution according to provisions of the Public Safety Finance Act. According to the

Act, the $100 million appropriation to the public safety permanent fund would be invested by the

State Investment Officer in the same manner that the land grant permanent funds are invested.

Earnings from the investment of the public safety permanent funds are to be credited to the pub-

lic safety assistance fund and shall be used only for an annual distribution to public safety assis-

tance fund. The Act provides that on July 1 of fiscal year 2008, and on July 1 of each fiscal year

thereafter, an annual distribution will be made from the public safety permanent fund to the pub-

lic safety assistance fund in the amount of eighty-five percent of the earnings accrued on the

permanent fund in the previous fiscal year. An increase in the annual distribution would require

a vote of three-fourths of the members elected to each house of the Legislature.

The public safety assistance fund is created within the New Mexico Finance Authority (NMFA).

The NMFA will invest the fund in accordance with its own investment rules and policies. In-

come from investment of the public safety assistance fund will be credited to the fund. Balances

in the fund at the end of a fiscal year shall not revert to the general fund.

SIGNIFICANT ISSUES

Senate Bill 572 requires NMFA to administer the public safety assistance fund, including adopt-

ing the necessary rules, procedures, and criteria necessary to carry out the purpose of the Act.

The NMFA is required to report on the status of the public safety assistance fund, the applica-

tions made by qualifying entities for public safety assistance, and make recommendations for

appropriations from the public safety assistance fund to the NMFA Oversight Committee no later

than October 1 of each calendar year.

NMFA is required to make recommendations for appropriations made from the public safety as-

sistance fund and report the recommendations to the NMFA Oversight Committee, but the bill

does not provide for Legislative authorization to make the allocations to the qualifying entities.

ADMINISTRATIVE IMPLICATIONS

The NMFA indicates it will need to hire one full-time equivalent to administer the proposed pub-

lic safety assistance fund and estimates it would cost approximately $58.5 thousand per year.

LK/nt