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).

Adobe PDF versions include all attachments, whereas HTML versions may not. Previously issued FIRs and

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 Lovejoy

ORIGINAL DATE

LAST UPDATED

1-17-2008

HB

SHORT TITLE Native American Art Authenticity Program

SB 16

ANALYST Dearing

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

$300.0 Nonrecurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Cultural Affairs

SUMMARY

Synopsis of Bill

Senate Bill 16 appropriates $300 thousand from the general fund to department of Cultural

Affairs for the purpose of implementing a Native American art authenticity program to label

Indian Arts and Crafts sold or originating in New Mexico as authentic in source.

FISCAL IMPLICATIONS

The appropriation of $300 thousand contained in this bill is a nonrecurring expense to the

General Fund. Any unexpended or unencumbered balance remaining at the end of FY08 shall

not revert to the General Fund.

SIGNIFICANT ISSUES

The federal Indian Arts and Crafts Act of 1990 (created under Public Law 101-644) and codified

as 25 U.S.C. Section 305 established a Native American handmade product classification.

The 1990 federal legislation created the Indian Arts and Crafts Board (IACB). The Board is

tasked with establishing policies and direction to maintain the economic development of

Senate Bill 16 – Page 2

American Indians and Alaska Natives through expansion of the Indian arts and crafts markets.

The IACB consists of five (5) commissioners appointed by the Secretary of the Interior serving

voluntarily, without compensation.

Under the existing federal Act, any item produced after 1935 that is marketed using terms such

as “Indian," “Native American" or “Alaska Native" must be made by a member of a State or

federally-recognized tribe or by a certified Indian artisan.

For a first time violation of the existing Federal Indian Arts and Crafts Act of 1990, an individual

can face civil or federal criminal penalties up to a $250,000 fine or a 5-year prison term, or both.

If a business violates the Act, it can face civil penalties or can be prosecuted and fined up to

$1,000,000.

Fraudulently labeled items marketed as authentic and Indian or Native American in

craftsmanship can harm sales of authentic merchandise. According to the Attorney General’s

office, the federal IACB is not sufficiently funded or provided other resources to accomplish its

oversight role for the Indian arts and crafts markets.

PERFORMANCE IMPLICATIONS

If enacted, the LFC recommends that the Cultural Affairs department submit a plan for program

evaluation with specific program goals and criteria for assessing the program effectiveness and

suggested outputs, outcomes and performance measures to evaluate the performance of state

government programs as prescribed in the Accountability in Government Act.

ALTERNATIVES

Under 25 U.S.C. Section 305, artists may currently create advertisements, logos, marks, or group

or individual hallmarks or otherwise conspicuously mark items to indicate that the item is

authentically produced by a Native American. Items produced with materials prescribed in 25

U.S.C. Section 305 through specific production methods may be marked and marketed as

“Indian," “Native American," or “Alaska Native", under the act, and may also be labeled as

originating from a particular tribe, provided the item was created by a member of that particular

tribe. Items labeled or referencing a specific tribal or Indian nation “heritage," “descent," or

“ancestry" should be used only where the statement is truthful and does not indicate the artist is a

member of the relevant tribe.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

Not enacting Senate Bill 16 would prevent an appropriation to implement the Native American

art authenticity program.

PD/bb