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

SPONSOR HBIC

ORIGINAL DATE

LAST UPDATED

1/18/2008

HB 68/HBICS

SHORT TITLE Educational Television and Radio Equipment

SB

ANALYST Sánchez

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

$1,295.0 Non-recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Companion to HB88 which appropriates funds for educational television to Western New

Mexico University ($118.6 thousand)

SOURCES OF INFORMATION

LFC Files

SUMMARY

Synopsis of House Business and Industry Committee Substitute

The HBIC substitute for House Bill 68 adds an emergency clause to the bill making it effective

immediately upon being signed.

House Bill 68 amends Section 21-1-34 NMSA 1978 (education television equipment

replacement fund) to include radio equipment replacement. It appropriates $1,295 thousand

from the GENERAL FUND to the University of New Mexico ($405 thousand), New Mexico

state University ($365 thousand), Eastern New Mexico University ($365 thousand) and

Albuquerque Public Schools ($40 thousand) for the purpose of replacing equipment for

corporation for public broadcasting qualified educational television and radio at the stations

operated by the entities listed above after the Higher Education Department has developed

criteria and promulgated rules for the disbursement of the funds. House Bill 68 also appropriates

$120 thousand to the Higher Education Department for television and radio interconnection

expenditures in fiscal year 2008 and beyond.

FISCAL IMPLICATIONS

The appropriation of $1,295 thousand contained in this bill is a NON-RECURRING expense to

the GENERAL FUND. Any unexpended or unencumbered balance remaining at the end of

House Bill 68/HBICS – Page

2

FISCAL YEAR 2008 and beyond shall not revert to the GENERAL FUND.

This bill amends an existing fund to include replacement of radio equipment with television

equipment for corporation for public broadcasting certified stations operated by public post-

secondary educational institutions or public schools. The LFC has concerns with including

continuing appropriation language in the statutory provisions for newly created funds, as

earmarking reduces the ability of the legislature to establish spending priorities.

SIGNIFICANT ISSUES

According to HED, educational television stations have funded digital upgrades through federal

funds, education radio stations have funded equipment through capital outlay appropriations.

Educational television and radio stations have not had any other consistent funding source for

equipment replacement.

From 2005 through 2007 the New Mexico legislature has appropriated over $70 million from all

funding sources to support educational television in all post-secondary state supported schools

that have an educational television station. Of that amount, over $10 million has been from the

general fund. It appears that not even 1 percent of the annual appropriation has been set aside for

equipment replacement.

From the responses received from the entities affected, it does not appear that any of them have

set up an internal fund for equipment replacement that is funded through the normal equipment

depreciation that can then be used to fund replacement of equipment. It is important to note that

upgrading the stations to the federally-required digital signal by February 2009 is an expense that

may not have been able to be covered by a well thought out and funded equipment replacement

fund. However, the universities and Albuquerque Public Schools (APS) could have started to

position themselves for the change since the federal government announced the change as early

as the late 1990s.

According to the Higher Education Department, the appropriation would serve as a twenty-five

percent (25%) match to a federal grant. It is unclear from the response if any of the universities

that operate a public television or radio station and APS that operates a public radio station have

applied for and been granted funding through the Community Service Grant or the Digital Radio

Conversion Fund and the Digital Television Conversion Fund ($1.5 billion available).

According to the members of the commission for public broadcasting all revenue received over

the past several years has been solely to pay for programming. No additional amounts have been

available for equipment replacement. Moreover, all eligible federal funds have been applied for.

ADMINISTRATIVE IMPLICATIONS

APS is not an entity governed by HED, yet the act requires HED to set criteria under which APS

will be granted funds to replace its equipment. HED should enter into a memo of understanding

with APS to avoid any potential issues with disbursement of funds based on rules established by

HED.

House Bill 68/HBICS – Page

3

TECHNICAL ISSUES

On page 3, line 15 delete the word "state" after eastern New Mexico to avoid any confusion over

which university the appropriation refers.

OTHER SUBSTANTIVE ISSUES

According to HED other states fund educational television and radio equipment replacement.

Without the upgrade to the equipment and the transition to digital, television and radio stations

may not be able to transmit. According to the New Mexico chairman of the Commission on

Public Broadcasting some of the equipment needs are so dire some stations may not be able to

broadcast.

AS/mt