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Economic Development Department

SUMMARY

Synopsis of House Appropriations and Finance Committee Amendment

The amendment adds a general fund appropriation of $160.0 to the Economic Development Department (EDD) to assist companies in rural areas in applying for and using in-plant training and other state development training resources.

Synopsis of Bill

The bill would appropriate $6 million general fund in FY99 and subsequent fiscal years to the development training fund for a development training program providing classroom and in-plant training to furnish qualified manpower resources for certain new or expanding industries and businesses in the state. Unexpended balances would not revert at the end of FY99. The bill includes an emergency clause.

Significant Issues

The industrial development (in-plant) training program is one of the most popular economic development incentives in New Mexico. In FY98, for example, the in-plant program contracted to create 3,712 jobs. This bill extends this program.

The in-plant training program has been criticized for its emphasis on companies in urban areas. Over 90 percent of in-plant funds in recent years have been committed to companies in Albuquerque and Rio Rancho. The funding for assistance in rural areas would allow EDD to provide as many as 2.5 employees to contact companies in rural areas which qualify for in-plant training, explain the in-plant program and assist with completion of paperwork to apply and complete reporting requirements to receive in-plant funds. Because in-plant funds are used only when companies create new jobs, these funds should help promote tangible economic growth in rural New Mexico. This effort will be further facilitated by rule revisions which have been adopted by the Industrial Development Training Board which will simplify reporting requirements for small companies and increase the reimbursement rate to 75 percent or more for all companies which create new jobs in rural parts of New Mexico.

FISCAL IMPLICATIONS

EDD does not anticipate a need for additional funding or staff to administer the funds in this bill.

ADMINISTRATIVE IMPLICATIONS

Staff to administer this program are included in the Economic Development Department base budget.

DH/njw