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

SPONSOR Nunez

ORIGINAL DATE

LAST UPDATED

2/2/2007

HB 438

SHORT TITLE NMSU Pecan Industry Assistance

SB

ANALYST McOlash

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

$250.0

Recurring

General fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

New Mexico State University - Department of Agriculture (DOA)

Higher Education Department (HED)

SUMMARY

Synopsis of Bill

House Bill 438 appropriates $250,000 from the General Fund to the Regents of NMSU for ex-

penditure in FY 2008 to support the DOA’s program for economic development, research, and

pest protection to serve the pecan industry.

FISCAL IMPLICATIONS

The appropriation of $250,000 contained in this bill is a recurring expense to the General Fund.

Any unexpended or unencumbered balance remaining at the end of FY 2008 shall revert to the

General Fund.

SIGNIFICANT ISSUES

Department of Agriculture Agency Analysis

New Mexico has quietly grown to be one of the top pecan producing and pecan

processing states in the country ($90-$120 million-excluding value added;

House Bill 438 – Page

2

2,000+ jobs). Private investment in New Mexico’s pecan industries continues

with planned expansion of existing shelling plants, future development of addi-

tional cold storage facilities, and additional “value added businesses" including

candy manufacturing. Currently, primary funding sources for pecan related

programs at NMSU/NMDA that support industry needs are comprised of fed-

eral grants and grower contributions. Over the past two years, federal grants

have been significantly reduced, thus increasing the importance of this funding

request. This year, New Mexico’s first $3-$4 million pecan shipment was

made to China as a result of last year’s economic development partnership be-

tween industry and NMDA. This funding request, combined with industry

contributions will partially support a non-traditional approach in which private

industry requirements, research, insect protection, and economic development

programs are interlaced. Funds will be jointly administered by the board of di-

rectors of NMPGA representatives from NMDA. The College of Agriculture

and Home Economics will coordinate research programs. Priority research di-

rections include: the efficient use of irrigation water, optimizing and minimiz-

ing pesticide use, and management practices to stabilize production. Funding

for economic development purposes will include expanding New Mexico’s pe-

can exports to China.

This proposal was not submitted to HED by NMSU and was not included in the Department’s

funding recommendation for FY08.

BM/yr