Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance

committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

if they are used for other purposes.

Current FIRs (in HTML & Adobe PDF formats) are a vailable on the NM Legislative Website (legis.state.nm.us).

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attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

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

SPONSOR Saavedra

ORIGINAL DATE

LAST UPDATED

01/31/08

02/07/08 HB 468/aHAFC

SHORT TITLE Faculty Endowment Fund Name Change

SB

ANALYST Williams

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

See Narrative

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to appropriation in the Senate-passed version of House Bill 2 which includes $5.6

million for a non-recurring general fund appropriation to the faculty endowment fund, including

$600 thousand for the establishment of the Pamela Minzner professorship at the University of

New Mexico School of Law.

SOURCES OF INFORMATION

LFC Files

Responses Received From

Higher Education Department (HED)

SUMMARY

Synopsis of HAFC Amendments

The House Appropriations and Finance Committee (HAFC) amendment #1 removes the

language regarding making an appropriation as a technical change. HAFC amendment #2 strikes

a portion of the existing statute relating to the appropriation enacted in 2007 legislation, then

inserts a temporary provision that $5 million appropriated from the general fund to the faculty

endowment fund in the General Appropriation Act of 2008 (House Bill 2) is to be disbursed in

fiscal year 2009 and subsequent years. Amendment #3 makes a technical change. Amendment

#4 specifies that whatever the final amount of the appropriation in the General Appropriation Act

of 2008 (House Bill 2) to the faculty endowment fund, the funding would be available for

university and college draw-down based on the allocations specified in the 2007 legislation.

Synopsis of Original Bill

House Bill 468 changes the name of the faculty endowment fund to the higher education

endowment fund. The bill expands the purpose of the fund to include scholarships for students.

House Bill 468/aHAFC – Page

2

FISCAL IMPLICATIONS

The bill does not contain an appropriation, and has no fiscal impact. The impact of the HAFC

amendments is to authorize House Bill 2 appropriations from the general fund to the faculty

endowment fund beginning in FY09. Further, the 2008 House Bill 2 appropriation to the faculty

endowment fund would be available for draw down by public, post-secondary institutions

proportionally according to the allocations specified in the 2007 legislation.

SIGNIFICANT ISSUES

HED notes during the 2007 session, changes were made to the existing statute along with an

appropriation of $12 million. The addition of the word “scholarship" resulted in differing

opinions on whether scholarships would apply only to faculty or would also apply to students.

The proposed legislation clearly expands the existing faculty endowment program to students.

The faculty endowment fund has traditionally been used as a mechanism to retain and recruit

highly qualified faculty.

Note that the appropriation currently included in House Bill 2 is relatively small, compared to

historical appropriations for this purpose. The attached draft from HED shows the current status

of faculty endowment fund draw downs.

OTHER SUBSTANTIVE ISSUES

The state is ranked an “F" for student financial aid in the 2006 Measuring Up report of state

higher education outcomes. This ranking is driven by the state’s reliance on the lottery

scholarship program, a merit-based program, and under-reliance on need-based programs. As

well, the state’s ranking on affordability influences the ranking. Current funding for all state

student financial aid programs total $72.3 million as included in the LFC budget

recommendation in Volume II on page 358.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

The HAFC amendments make reference to the General Appropriation Act of 2008 and appear to

amend language in House Bill 2. The outcome is that the HAFC amendment would conflict with

current scoring of the fiscal impact of the General Appropriation Act of 2008 (House Bill 2).

The Department of Finance and Administration may harmonize this issue through the allotment

process.

AW/mt:bb