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(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates/Conflicts with/Companion to/Relates to

SOURCES OF INFORMATION

Economic Development Department (EDD)

SUMMARY

Synopsis of Bill

The bill would transfer all real, personal and intangible property of the New Mexico Rural Rehabilitation Corporation (RRC) to the Economic Development Department (EDD). The attorney general would take all actions necessary to protect the property and effectuate the transfer. Except for money, contracts and contract rights, the EDD would sell or otherwise dispose of all property transferred from RRC and continue to collect money due from all contracts of the RRC. The bill creates a rural development fund, where all funds from liquidation of RRC assets and repayment of contracts would be deposited. Money in the fund would not revert and income earned by the fund would be credited to the fund. The EDD would use fund balances for economic development projects in counties with assessed valuations under $300 million and with populations under 100,000 people.

Significant Issues

According to EDD, the RRC is federally funded through the U.S. Department of Agriculture. The bill states that, pursuant to federal law, the property of the RRC is state property and subject to state law and appropriation. However, a New Mexico attorney general opinion has not yet been rendered on this matter.

EDD further notes that the bill requires that agency to continue to collect money due the RRC and to otherwise fulfill the terms of all contracts transferred from the RRC. However, the anti-donation clause prohibits a state agency from continuing some of the activities currently conducted by the RRC, including granting loans for livestock, mortgage loans for farm land, and scholarships and/or loans for college students. EDD suggests that other non-state organizations already in existence might better serve the purposes outlined in the bill, including the Rural Development Response Council and Enchanted Land Certified Development Corporation.

FISCAL IMPLICATIONS

According to EDD, that agency would require about $160.0 per year for staff or contracts to administer the funds and programs in this bill.

DH/gm