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F I S C A L I M P A C T R E P O R T
SPONSOR Taylor
ORIGINAL DATE
LAST UPDATED
2-6-06
HB
SHORT TITLE SOUTH VALLEY BUSINESS INCUBATOR
SB 538
ANALYST Hadwiger
APPROPRIATION (dollars in thousands)
Appropriation
Recurring
or Non-Rec
Fund
Affected
FY06
FY07
$100.0
Recurring
General Fund
(Parenthesis ( ) Indicate Expenditure Decreases)
SOURCES OF INFORMATION
LFC Files
Responses Received From
Department of Finance and Administration (DFA)
SUMMARY
Synopsis of Bill
Senate Bill 538 appropriates $100 thousand from the general fund to the Local Government Di-
vision (LGD) of the Department of Finance and Administration (DFA) in FY07 to fund opera-
tional expenses of a business incubator in the South Valley of Bernalillo County.
FISCAL IMPLICATIONS
The appropriation of $100 thousand contained in this bill is a recurring expense to the general
fund. Any unexpended or unencumbered balance remaining at the end of FY07 would revert to
the general fund.
SIGNIFICANT ISSUES
DFA indicates the appropriation will assist in administrative costs including benefits for an addi-
tional four employees for the business incubator of the south valley. The existing south valley
business incubator (SVBI) has been in existence for over a year. The primary source of funds for
bricks and mortar of the business incubator was provided by the U.S. Department of Commerce.
The cost of the business incubator was $2.5 million. Upon completion of the project, the build-
pg_0002
Senate Bill 538 Page 2
ing and operation was transferred to Bernalillo County. SVBI currently leases the facility from
Bernalillo County. The Rio Grande Community Development Corporation is a private, not-for-
profit parent company which assists SVBI with environmental and social issues for businesses in
Bernalillo County. SVBI was one of the first business incubators to receive certification in May
2005. The intent of the business incubator is to provide low-cost office space and operate a
commercial kitchen for first time businesses. This is a critical time for first time businesses to
get on their own feet. Eventually, businesses learn to manage and operate independently.
DFA added currently, there is only one person on the SVBI staff. There should be at least four
other employees to operate the business incubator, where at least six businesses are operating
now. Current funding for SVBI is in partnership with Bernalillo county, State of New Mexico-
capital outlay funding, McCune Foundation and Department of Commerce. Funding has been
used primarily for bricks and mortar. The funding received by the Department of Commerce is
non-recurring and not eligible for operational costs.
ADMINISTRATIVE IMPLICATIONS
LGD/DFA and Bernalillo county will enter into a grant agreement for services to fund opera-
tional expenses of a business incubator in the south valley of Bernalillo county. The project will
be assigned to a project manager in the Community Development Bureau.
DH/mt