NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

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(Parenthesis ( ) Indicate Revenue Decreases)

Relates to SB427, SB515, SB533, HB501, HB525, and HB827

SOURCES OF INFORMATION

Health Policy Commission

Department of Health

Attorney General

SUMMARY

Synopsis of Bill

The SPAC committee substitute for SB-714, the Youth Development Act, has as its purpose the establishment of the next generation council and the establishment of a grant assistance program to support community service, citizenship and leadership activities developing the next generation.

The council is administratively attached to the State Department of Education, and consists of fifteen members, ten adults and five youth who are appointed to achieve geographic diversity. The bill provides that the governor would appoint two members, the Speaker of the House and the President Pro-tem of Senate would appoint two members, the Commission on Higher Education would appoint two members, the Secretary of Health would appoint one member, the State Board of Education would appoint one member, and the Secretary of the Children, Youth and Families Department would appoint seven members upon recommendation of the New Mexico community foundation.

The bill directs 10 percent of the tobacco settlement money to the Next Generation Trust Fund, which is to be managed by the State Investment Council in the same manner it manages the state's permanent funds. The interest earnings of the trust fund are to be annually distributed to the youth development grant assistance program. Money in the grant assistance grant fund is appropriated to the council for its grant assistance program. Grants are to be awarded through a competitive proposal process to communities, public schools, not for profits organizations, tribal entities and post-secondary schools for youth development programs and activities throughout the state.

FISCAL IMPLICATIONS

The table at the top of the first page shows that there is no fiscal impact until FY 2001. This is because the timing of tobacco revenues still remains uncertain. The first distributions may not arrive until FY 2001. If so, they are expected to total nearly $90 million. Unless legislation is passed directing the money elsewhere, it will automatically flow to the general fund. This bill directs 10 percent of the money, or roughly $9 million to the Next Generation Trust Fund. Thus, there is a $9 million dollar gain to the Trust Fund and an offsetting $9 million loss to the General Fund shown. Grant money will not be available until the year following the deposit of the money into the trust fund. In the first year, there should be about $700 thousand available for grants, assuming an 8 percent return on the $9 million in the trust fund.

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