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

SPONSOR Heaton

ORIGINAL DATE

LAST UPDATED

1/18/2008

HB 65

SHORT TITLE NMSU Carlsbad Manufacturing Development

SB

ANALYST McOlash

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

$181.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to Appropriation in the General Appropriation Act

SOURCES OF INFORMATION

LFC Files

Responses Received From

New Mexico Higher Education Department (NMHED)

New Mexico State University (NMSU)

SUMMARY

Synopsis of Bill

House Bill 65 appropriates $181,000 from the General Fund to the Board of Regents of NMSU

for expenditure in FY09 to provide work force and vocational training through the Carlsbad

Manufacturing Sector Development Program.

FISCAL IMPLICATIONS

The appropriation of $181,000 contained in this bill is a recurring expense to the General Fund

Any unexpended or unencumbered balance remaining at the end of FY09 shall revert to the

General Fund.

SIGNIFICANT ISSUES

According to the NMSU analysis, the Engineered Products Division of Washington TRU

Solutions (the authorized contractor for the Waste Isolation Pilot Plant – WIPP in Carlsbad) is in

dire need of highly trained welders to manufacture stainless steel waste drums and other nuclear-

approved storage containers. It is estimated that EPD would hire an additional twenty welders

House Bill 65 – Page

2

immediately with plans to hire an additional twenty to thirty over the next two years, assuming

demand for EPD’s products remain constant. EPD currently pays between $18 & $23 per hour

for skilled welders. This expansion request, if funded, would secure two additional full-time

welding instructors (certified by the American Welding Society as an AWS Welding Supervisor)

and equipment needed to implement a specialized, high-level welding training program to meet

the needs of EPD and its subcontractors.

This expansion request is for $181,000 in addition to the annual appropriation of $363,600. A

request was submitted by NMSU Carlsbad in the amount of $181,100 to the New Mexico Higher

Education Department for review. The NMHED funding recommendation for FY09 is a

continuance of FY08 recurring funding in the amount of $363,600 and does not include the

$181,000 expansions request.

The HED’s evaluation table of FY09 Research and Public Service Projects provided to the LFC

classifies this project as a “would not oppose if funding available" project. Reasons for this

classification decision are not provided. (LFC Report 07-20, Higher Education Department

Review of Selected Research and Public Service Projects, January 12, 2008, Table 4, p74.)

OTHER SUBSTANTIVE ISSUES

Newly employed welders at EPD do not typically have sufficient skill or training needed to

produce the type of products that EPD offers; therefore, EPD has asked for assistance in creating

a specialized training program to provide welding students with sufficient skills in the nuclear

arena.

ALTERNATIVES

If this expansion request is not funded, NMSU Carlsbad will attempt to seek additional external

grant sources to accommodate this workforce development request.

BMc/mt