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

SPONSOR Salazar

ORIGINAL DATE

LAST UPDATED

1/28/08

HB 280

SHORT TITLE Manufacturing Extension Services

SB

ANALYST Earnest

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

$1,300.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

House Bill 280 duplicates Senate Bill 110.

SOURCES OF INFORMATION

LFC Files

Responses Received From

Economic Development Department (EDD)

SUMMARY

Synopsis of Bill

House Bill 280 appropriates $1.3 million for expenditure in FY08 and FY09 from the general

fund to the Economic Development Department to contract for manufacturing extension services

for small and mid-sized manufacturers. The appropriation is contingent on the receipt of money

from the National Institute of Standards and Technology (NIST) to operate a manufacturing

center in New Mexico that is approved by NIST. The bill declares an emergency.

FISCAL IMPLICATIONS

The appropriation of $1.3 million contained in this bill is a recurring expense to the general fund.

Any unexpended or unencumbered balance remaining at the end of fiscal year 2009 shall revert

to the general fund.

SIGNIFICANT ISSUES

EDD reports that manufacturing extension services to New Mexico’s emerging and medium-size

manufacturing companies is a key technical assistance program utilized by the Economic

House Bill 280 – Page

2

Development Department. This assistance helps these companies streamline their processes so

that they operate more efficiently and become more competitive. This type of technical

assistance ultimately results in the creation of more jobs and greater capital investment in New

Mexico. Manufacturing Extension Services is extremely valuable to start-up manufacturers by

helping them design streamlined processes.

The Economic Development Department also has a program to train companies in streamlining

manufacturing practices to become IS0-9000 certified.

PERFORMANCE IMPLICATIONS

According to EDD, the department has an existing contract with New Mexico Manufacturing

Extension Partnership (NMMEP) for manufacturing extension services. From July 1 to

December 31, 2007, NMMEP has assisted 26 urban and 46 rural companies with manufacturing

extension services. Since 2000, NMMEP has created or retained approximately 2,631 jobs.

In addition, EDD reports that one of NMMEP’s successes is La Puerta Original Incorporated, a

high-end custom door and millwork company located in Santa Fe. Through Lean Manufacturing

Principles, NMMEP’s assistance has resulted in faster, more efficient production process,

reduced paperwork, greater on-time delivery to customers, improved customer satisfaction, and

improved cash flow for La Puerta.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

House Bill 280 duplicates Senate Bill 110.

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