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F I S C A L I M P A C T R E P O R T
SPONSOR Ingle
ORIGINAL DATE
LAST UPDATED
1/28/08
HB
SHORT TITLE Expand Arts and Cultural Districts
SB 343
ANALYST Earnest
APPROPRIATION (dollars in thousands)
Appropriation
Recurring
or Non-Rec
Fund
Affected
FY08
FY09
$300.0
Recurring
General Fund
(Parenthesis ( ) Indicate Expenditure Decreases)
Senate Bill 343 duplicates HB440.
SOURCES OF INFORMATION
LFC Files
Responses Received From
Economic Development Department (EDD)
Department of Cultural Affairs (DCA)
SUMMARY
Synopsis of Bill
Senate Bill 343 appropriates $300 thousand from the general fund to Economic Development
Department for the MainStreet program to expand the number of arts and cultural districts.
FISCAL IMPLICATIONS
The appropriation of $300 thousand contained in this bill is a recurring expense to the general
fund. Any unexpended or unencumbered balance remaining at the end of fiscal year shall revert
to the general fund.
SIGNIFICANT ISSUES
Laws 2007, Chapter 160 (House Bill 606), created Arts and Cultural Districts as an economic
stimulus program for local communities. The Arts and Cultural District program is attached to
the Economic Development Department, which works in collaboration with Department of
Cultural Affairs, and is responsible for designating districts annually in New Mexico. The intent
was to support arts- and culture-based economic development for businesses, individuals,
organizations, agencies and institutions to work collaboratively and to formally structure that
pg_0002
Senate Bill 343 – Page
2
collaboration creating an economic market niche. The legislation established EDD’s MainStreet
Program Director as the coordinator of the state’s efforts and the New Mexico Arts Commission
as the authorizing body for such districts. The legislation did not include funding for the
administration and implementation of the initiative.
Without an appropriation in 2007, only two districts were designated to assist the local
communities and support technical assistance and resources to the local councils. EDD reports
that “there are 11 communities that have requested technical assistance associated with the Arts
and Culture Districts program. Without this funding the Economic Development will not have
the resources to continue the Arts and Culture Districts Program."
According to EDD:
An Arts and Culture District is a well-recognized, branded, mixed-use, compact area of a
town in which a high concentration of arts and cultural facilities serves as the anchor and
is not larger than one (1) square mile in area. Arts and Culture Districts can be found in
small rural communities or in large urban areas with the potential for more than one arts
and culture district.
More than 90 cities in the United States have planned or implemented an Arts and
Culture District – positioning the arts and culture as the center of revitalization and
community economic development efforts. The impact of Arts and Culture Districts is
measurable. The arts and areas with historic structures attract residents and tourists who
also support adjacent businesses such as restaurants, lodging, retail and entertainment.
The presence of arts and cultural opportunities enhances property values, the profitability
of surrounding businesses and the tax base of the region. These districts attract a diverse
and well-educated workforce – a key incentive for new and relocating businesses. And
these districts contribute to the creativity and innovation of a community.
The NM MainStreet budget for FY08 is about $1 million. This includes salaries and benefits,
travel and other operating expenses for 2 FTE. The bulk of the funding, $825 thousand, is for
contractors who provide the specialized services – e.g., architectural design, marketing, strategic
planning, economic analysis, etc – to the communities. The budget has grown significantly since
2003. The largest increase came in 2006 when the Legislature appropriated an additional $500
thousand specifically for the program.
The Legislature has appropriated another $4.5 million in capital outlay over the last three years
for MainStreet projects statewide.
PERFORMANCE IMPLICATIONS
According to DCA:
Technical advice and outreach are performance measures for DCA. The Cultural
Properties Act of 1978 outlined the responsibilities of the Historic Preservation Division,
including the preservation of cultural properties which contribute to the economic
development, quality of life and rich cultural heritage of the State of New Mexico and its
communities through increased economic activity, community pride, tourism and
increase in gross receipts taxes. Projects in newly designated arts and cultural districts
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Senate Bill 343 – Page
3
that expect to see benefit of the raised historic tax credit cap will still need to comply
with existing program requirements for the DCA/Historic Preservation Divisions historic
tax credit program.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
Senate Bill 343 duplicates House Bill 440.
OTHER SUBSTANTIVE ISSUES
According to EDD:
The legislation states that any New Mexico MainStreet community, whose MainStreet
organization chooses to apply with other partnering Arts and Culture organizations and
with their municipality, may apply for authorization of a MainStreet Arts and Culture
District.
The benefits offered to state authorized districts may include: enhanced historic tax
credits for rehabilitation of historic structures or other incentives which create live/work
space for cultural workers, space for cultural and entertainment enterprises and access to
financial assistance programs from state agencies and other funding partners such as:
-
Specialized technical assistance and support through professionals in the field of
planning and development for such districts through the New Mexico MainStreet
Program and New Mexico Arts
-
Tourism Department support in marketing and promoting the official state authorized
District
-
Access to the MainStreet Capital Outlay Fund, set aside annually by the State
Legislature
-
Access to New Mexico Historic Preservation Division (HPD) Federal Rehabilitation
Investment Tax Credits and New Mexico Historic Property Tax Credit (doubled
within Arts and Culture Districts)
-
Access to New Mexico Historic Preservation Loan Fund and the MainStreet
Revolving Loan Fund
-
Potential locating of a Museum of New Mexico Foundation New Mexico Creates
shop
-
Potential access by participating artists and craftspeople to sell their creations on the
Museum of New Mexico Foundation’s e-commerce site
www.NewMexicoCreates.org
-
NMEDD potential access to Cooperative Advertising funds and Certified
Communities Initiative funding with the passage of LEDA for Arts and Culture
Districts
-
New Mexico Finance Authority planning grants
WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL
EDD will be limited in the number of arts and cultural districts it can create or will have to pull
from existing resources.
BE/mt