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

SPONSOR Varela

ORIGINAL DATE

LAST UPDATED

1/28/08

HB 340

SHORT TITLE Community Development Equity Capital

SB

ANALYST Earnest

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

$350.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to an appropriation in Section 5 of the General Appropriation Act.

SOURCES OF INFORMATION

LFC Files

Responses Received From

Economic Development Department (EDD)

Department of Finance and Administration (DFA)

SUMMARY

Synopsis of Bill

House Bill 340 appropriates $350 thousand from the general fund to Economic Development

Department to provide community development equity capital for underserved individuals and

communities and to administer a social bottom-line equity organization serving small businesses

throughout New Mexico, with a focus on rural communities.

FISCAL IMPLICATIONS

The appropriation of $350 thousand 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

New Mexico Community Capital (NMCC) provides equity capital and business growth services

to qualifying businesses throughout New Mexico, particularly in under-invested areas.

According to NMCC, the organization has a dual bottom line. Through targeted financial

House Bill 340 – Page

2

investments (Equity Fund) and entrepreneurial support (IMPACT-NM Business Growth

Services), NMCC produces two primary results:

•

Positive social returns as the direct consequence of new job opportunities and a well-

trained, well-compensated workforce in the local community.

•

Solid financial returns for our investors.

ADMINISTRATIVE IMPLICATIONS

The Economic Development Department would be required to administer a contract with

NMCC, but could do so with existing resources.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

The appropriation in this bill relates to a $75 thousand appropriation in the General

Appropriation Act (HB7) for the same purpose.

ALTERNATIVES

EDD suggests that the appropriation could be made to the New Mexico Finance Authority

(NMFA) to take advantage of their expertise administering capital equity funds.

BE/mt