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

SPONSOR Cervantes

DATE TYPED 02-07-05 HB 298

SHORT TITLE Improve Chile Industry

SB

ANALYST Woods

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

$130.0

Recurring General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to the appropriation for New Mexico State University in the General Appropriations Act.

Duplicates SB182

SOURCES OF INFORMATION

LFC Files

Responses Received From

New Mexico State University (NMSU), College of Agriculture and Home Economics (CAHE)

No Responses Received From

New Mexico Commission on Higher Education (CHE)

SUMMARY

Synopsis of Bill

House Bill 298 – Making an Appropriation to Increase Profitability, Yield and Sustainability of the

Chile Industry

–

appropriates $130,000 from the general fund to the Board of Regents of New Mex-

ico State University for expenditure in FY06 to increase the profitability and yield of chile and to in-

crease the economic sustainability of the New Mexico chile industry. Any unexpended or unencum-

bered balance remaining at the end of FY06 shall revert to the general fund.

House Bill 298 -- Page 2

Significant Issues

NMSU-CAHE indicates that without a critical mass of local chile production, there is no reason

for the chile processing industry to remain in New Mexico. Further, that presently more than 70

percent of the cayenne and jalapeno crops are grown in Mexico while, a decade ago, most of the

chile now imported was available from farms in southern New Mexico.

Facing increased foreign imports, NMSU-CAHE suggests that it is not difficult to imagine that

multi-national and non-locally owned companies will evaluate the economics of relocating closer

to the source of their raw materials. Accordingly, NMSU-CAHE has identified four key meas-

ures to insure that southern New Mexico communities are prepared to avoid the economic devas-

tation that would result from farms, businesses, jobs and income being lost to foreign competi-

tion:

•

improvement of management practices;

•

reduction of costs through harvesting system mechanization;

•

expansion of market opportunities; and

•

effectively and efficiently using existing technology to enhance the harvesting and de-

stemming of state-grown peppers.

While NMSU-CAHE indicates that this project was approved by the NMSU Board of Regents, it

is not included in the CHE’s 2005-2006 Higher Education Funding Recommendation.

FISCAL IMPLICATIONS

The appropriation of $130,000 contained in this bill is a recurring expense to the general fund.

Any unexpended or unencumbered balance remaining at the end of FY06 shall revert to the gen-

eral fund.

ADMINISTRATIVE IMPLICATIONS

NMSU-CAHE would retain oversight of the program.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Relates to the appropriation for New Mexico State University in the General Appropriations Act.

Duplicates SB182

BFW/njw