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

SPONSOR Lundstrum

ORIGINAL DATE

LAST UPDATED

1-18-2007

HB 152

SHORT TITLE Indian Arts & Crafts Certification Marks

SB

ANALYST Dearing

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

$300.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to House Bill 153

SOURCES OF INFORMATION

LFC Files

Library of Congress

Federal Trade Commission

The U.S. Department of Interior’s Indian Arts and Crafts Board

Responses Received From

Indian Affairs Department (IAD)

Cultural Affairs Department (CAD)

SUMMARY

Synopsis of Bill

House Bill 152 appropriates $300 thousand from the general fund to Department of Cultural

Affairs for the purpose of implementing a certification mark program to label Indian Arts and

Crafts sold or originating in New Mexico as authentic in source.

FISCAL IMPLICATIONS

The appropriation of $300 thousand contained in this bill is a nonrecurring expense to the

General Fund. Any unexpended or unencumbered balance remaining at the end of FY08 shall

not revert to the General Fund.

House Bill 152 – Page

2

SIGNIFICANT ISSUES

The federal Indian Arts and Crafts Act of 1990 (created under Public Law 101-644) and codified

as 25 U.S.C. Section 305 established a Native American handmade product classification.

The 1990 federal legislation created the Indian Arts and Crafts Board (IACB). The Board is

tasked with establishing policies and direction to maintain the economic development of

American Indians and Alaska Natives through expansion of the Indian arts and crafts markets.

The IACB consists of five (5) commissioners appointed by the Secretary of the Interior serving

voluntarily, without compensation.

Under the existing federal Act, any item produced after 1935 that is marketed using terms such

as “Indian," “Native American" or “Alaska Native" must be made by a member of a State or

federally-recognized tribe or by a certified Indian artisan.

For a first time violation of the existing Federal Indian Arts and Crafts Act of 1990, an individual

can face civil or federal criminal penalties up to a $250,000 fine or a 5-year prison term, or both.

If a business violates the Act, it can face civil penalties or can be prosecuted and fined up to

$1,000,000.

Fraudulently labeled items marketed as authentic and Indian or Native American in

craftsmanship can harm sales of authentic merchandise. According to the Attorney General’s

office, the federal IACB is not sufficiently funded or provided other resources to accomplish its

oversight role for the Indian arts and crafts markets.

PERFORMANCE IMPLICATIONS

If enacted, the LFC recommends that the Cultural Affairs department submit a plan for program

evaluation with specific program goals and criteria for assessing the program effectiveness and

suggested outputs, outcomes and performance measures to evaluate the performance of state

government programs as prescribed in the Accountability in Government Act.

RELATIONSHIP

House Bill 152 relates to House Bill 153. House Bill 152 appropriates $300 thousand for

expenditure in FY08 to implement the Indian arts and crafts certification mark program. House

Bill 152 proposes a non-reverting appropriation, however it does not includes amendments or

additions to the existing Indian Arts and Crafts Sales Act, Sections 30-33-6, 30-33-7, and 30-33-

11 NMSA as proposed in House Bill 153.

ALTERNATIVES

Under 25 U.S.C. Section 305, artists may currently create advertisements, logos, marks, or group

or individual hallmarks or otherwise conspicuously mark items to indicate that the item is

authentically produced by a Native American. Items produced with materials prescribed in 25

U.S.C. Section 305 through specific production methods may be marked and marketed as

“Indian," “Native American," or “Alaska Native", under the act, and may also be labeled as

originating from a particular tribe, provided the item was created by a member of that particular

tribe. Items labeled or referencing a specific tribal or Indian nation “heritage," “descent," or

House Bill 152 – Page

3

“ancestry" should be used only where the statement is truthful and does not indicate the artist is a

member of the relevant tribe.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

Not enacting House Bill 152 would prevent an appropriation to implement the certification mark

program.

PD/csd