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

SPONSOR Sanchez, B.

ORIGINAL DATE

LAST UPDATED

1/31/08

HB

SHORT TITLE New Mexico Individual Development Accounts

SB 459

ANALYST Lucero

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

$1,000.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to Appropriation in the General Appropriation Act

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Workforce Solutions (DWS)

SUMMARY

Synopsis of Bill

Senate Bill 459 appropriates one million ($1,000,000) from the general fund to the individual

development fund for expenditure in FY09 to carry out the provisions of the Individual

Development Account (IDA) Act.

FISCAL IMPLICATIONS

The appropriation of one million ($1,000,000) contained in this bill is a recurring expense to the

general fund. Any unexpended or unencumbered balance remaining at the end of fiscal year

2009 shall revert to the general fund.

The language in this bill conflicts with Section 58-30-13 NMSA 1978 which created the

individual development fund as a non-reverting fund; therefore, the language “Any unexpended

or unencumbered balance remaining at the end of fiscal year 2009 shall revert to the general

fund" is in conflict with the statute.

Senate Bill 459 – Page

2

SIGNIFICANT ISSUES

DWS administers the IDA program through the Workforce Transition Services Division. Three

contractors administrate the program including: Community Action, Women Economic Self-

Sufficiency Team, and HELP NM.

To reach geographic areas of the state not currently receiving funding, this bill could be amended

to include language precluding existing service areas from receiving the newly appropriated

funds contained in this bill.

The department could issue another request for proposals (RFP) to allocate the appropriation in

this bill or could expand the existing contracts. Requirements to qualify as a provider are

detailed in Section 59-30-3 NMSA 1978.

PERFORMANCE IMPLICATIONS

DWS does not currently report IDA performance outcomes. Program measures could be

developed such as “Number of individual development accounts created during fiscal year

2009."

ADMINISTRATIVE IMPLICATIONS

According to Section 58-30-5 NMSA 1978, the Department of Workforce Solutions can use no

more that 5 percent of the appropriation to administer the Act.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

The language in this bill conflicts with Section 58-30-13 NMSA 1978 which created the

individual development fund as a non-reverting fund; therefore, the language “Any unexpended

or unencumbered balance remaining at the end of fiscal year 2009 shall revert to the general

fund" is in conflict with the statute.

TECHNICAL ISSUES

None identified

OTHER SUBSTANTIVE ISSUES

Individual Development Accounts (IDAs) are matched savings accounts that enable low-income

or low-wealth participants to save, build assets, and enter the financial mainstream. IDAs reward

the savings of working-poor families who are saving to buy a home, pay for post-secondary

education, purchase a vehicle for work, or start a small business. IDAs make it possible for low-

income families to build the financial assets to achieve the “American Dream."

IDA’s provide a match incentive through a variety of government and private sector sources. In

New Mexico, IDA participants must complete a financial literacy course to receive the matched

funds.

Senate Bill 459 – Page

3

AMENDMENTS

The sponsor of the bill may want to amend the bill and insert at the beginning of line 18 “and

subsequent years". Additionally, the bill should be amended to include the word “not" on line 20

after the word “shall" and before the word “revert". This would resolve the conflict with

Section 58-30-13 NMSA 1978 which created the individual development fund as a non-reverting

fund.

To reach geographic areas of the state not currently receiving funding, this bill could be amended

to include language precluding existing service areas from receiving the newly appropriated

funds contained in this bill.

DL/nt