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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-

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