Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR Szczepanski
LAST UPDATED
ORIGINAL DATE 1/27/2025
SHORT TITLE IRB Project Minimum Wage
BILL
NUMBER House Bill 6
ANALYST Graeser
REVENUE*
(dollars in thousands)
Type FY25 FY26 FY27 FY28 FY29
Recurring or
Nonrecurring
Fund
Affected
PIT
Indeterminate
– may exceed
$1,000.0
Indeterminate
– may exceed
$1,000.0
Indeterminate
– may exceed
$1,000.0
Indeterminate
– may exceed
$1,000.0
Recurring General Fund
CIT
Indeterminate
– may exceed
($1,000.0)
Indeterminate
– may exceed
($1,000.0)
Indeterminate
– may exceed
($1,000.0)
Indeterminate
– may exceed
($1,000.0)
Recurring General Fund
Parentheses ( ) indicate revenue decreases.
Relates to Senate Bill 59 which amends some provisions of the Public Works Minimum Wage
Act.
Sources of Information
LFC Files
Agency Analysis Received From
Workforce Solutions Department (WSD) Agency Analysis was Solicited but Not Received From
Taxation and Revenue Department (TRD)
SUMMARY
Synopsis of House Bill 6
House Bill 6 amends the Public Works Minimum Wage Act (Sections 13-4-10 through 13-4-17
NMSA 1978) to require that projects funded through industrial revenue bonds (IRBs) issued by
municipalities or counties comply with prevailing wage and fringe benefit requirements.
Specifically, contractors, subcontractors, employers, and others acting as contractors on these
projects will be required to pay workers’ wages and benefits in accordance with the prevailing
wage rates determined by the Workforce Solutions Department (WSD) Labor Relations Division
(LRD). This amendment applies to projects exceeding $60 thousand, aligning with the
requirements outlined in Section 13-4-11 NMSA 1978.
House Bill 6 – Page 2
This bill does not contain an effective date and, as a result, would go into effect 90 days after the
Legislature adjourns, or June 20, 2025, if enacted.
FISCAL IMPLICATIONS
There is no central repository of data on current or proposed industrial revenue bonds (IRBs).
One popular area for applying for IRBs is renewable energy, including solar projects and wind
farms. These projects may qualify for either federal renewable energy investment credits or
renewable energy production credits. These federal tax credits were signed into law in 2022:
On August 16, 2022, President Biden signed Public Law 117-369, 136 Stat. 1818,
commonly known as the Inflation Reduction Act of 2022 (IRA), into law. Under the
Inflation Reduction Act, taxpayers may receive increased tax benefits by meeting
prevailing wage and apprenticeship requirements (PWA)
1
.
The increases in specific dollar or percentage credits can be as much as five times greater if the
developers and operators conform to prevailing wage requirements. It is unlikely that any
developers who are eligible for these enhanced credits will fail to meet the requirements of the
IRA. Thus, for this segment of the IRB universe, the provisions of the bill will have no fiscal
effect against the plausible and probable base. If the new administration is able to repeal the IRA
renewable energy credits with the labor cost incentives, this assumption should be reviewed.
One of the first executive orders signed by President Trump was a 90-day delay on IRA funding.
Although primarily addressing offshore wind projects and the electric vehicle mandate, the
future of clean energy incentives is uncertain.
2
If federal IRA tax credits are repealed, then the
incentive for renewable energy project developers to hire registered apprentices and union labor
is significantly reduced. The provisions of this bill would require renewable projects that take
advantage of the IRB provisions to pay apprentices and labor the prevailing rate.
IRBs also cover projects such as the Facebook project in Las Lunas. The provisions of this bill
would also apply to similar projects.
Because of the lack of data on future IRBs of the Facebook type, the fiscal impacts are shown as
“indeterminate, could exceed $1,000.0” because wages subject to personal income tax might
increase and “indeterminate, could exceed ($1,000.0)” for CIT because labor costs might
increase and profits fall.
WSD anticipates that some additional staff time will be necessary to review wage scales and
address complaints arising from these projects and to educate governments about the impact of
these changes. Given that IRB projects are not nearly as widespread as other public works projects,
the fiscal impact likely can be absorbed by existing staff and resources.
SIGNIFICANT ISSUES
Historically, the first IRB approved in the state provided an incentive for Intel to build the first
chip manufacturing plant in Sandoval County, just outside the Rio Rancho city boundaries.
1
https://www.dol.gov/agencies/whd/IRA
2
https://www.energysage.com/blog/ira-funding-pause-2025/ House Bill 6 – Page 3
Currently, the Facebook plant in Las Lunas has been approved in multiple tranches for a total of
$70 billion in industrial revenue bonds. Many of the recent utility-scale solar farms and wind
farms built in the state have been approved for IRBs.
The Inflation Reduction Act has been a drivers of recent solar and wind. Many of these projects
ask for IRBs. If the payment in lieu of taxes are carefully calculated, the IRB election and
approval can benefit both the developer and the sponsoring government.
WSD points out that the bill relates to broader efforts to ensure fair wages on publicly funded or
facilitated projects, with more and more local governments exploring project labor agreements
and other tools for worker protection. Coordination with WSD and municipalities will be crucial
to avoid administrative duplication and ensure efficient enforcement of prevailing wage laws
under both bills.
PERFORMANCE IMPLICATIONS
The LFC tax policy of accountability is not met because TRD is not required in the bill to report
annually to an interim legislative committee regarding the data compiled from the reports from
taxpayers taking the implicit property tax exemption and gross receipts tax deduction.
WSD points out the following:
The inclusion of industrial revenue bond (IRB) projects under the Public Works
Minimum Wage Act (PWMWA) will require additional compliance and enforcement
efforts by WSD and LRD. Contractors and subcontractors working on IRB-funded
projects will need to request wage decisions from WSD in order to bid on projects and
adhere to prevailing wage rates and fringe benefit requirements. LRD will be responsible
for auditing these projects as part of its routine compliance monitoring.
The bill could benefit from including provisions that require municipalities and counties
issuing IRBs to disclose all project details to WSD at the outset. Such a requirement
would streamline wage determinations and improve enforcement efficiency.
Moreover, municipalities and counties may need to implement or expand their own
processes to monitor compliance on IRB projects. Training for municipal and county
officials, as well as contractors, on the requirements of the PWMWA could further
ensure smooth implementation and compliance. Establishing a clear, streamlined
compliance process—such as requiring contractors to submit certified payroll records—
will be critical to effectively enforce the prevailing wage requirements on IRB-funded
projects.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
WSD points out House Bill 6 (HB6) intersects with Senate Bill 59 (SB59), which also proposes
amendments to the Public Works Minimum Wage Act (PWMWA). SB59 addresses the inclusion
of "off-site fabricators" under the PWMWA, while HB6 focuses on extending prevailing wage
requirements to projects financed through industrial revenue bonds (IRBs). Both bills amend
overlapping sections of the PWMWA, specifically Sections 13-4-10.1, 13-4-11, 13-4-13, and 13-
4-14, which will need to be reconciled to avoid conflict if both bills are enacted. House Bill 6 – Page 4
TECHNICAL ISSUES
WSD recommends the Legislature should harmonize the language in HB6 and SB59 to ensure
clarity and consistency in the implementation of PWMWA provisions. Additionally, if SB59 is
enacted, the wage decision and compliance requirements for off-site fabricators should align
with the expanded requirements for IRB-funded projects under HB6 to maintain uniform
enforcement standards.
LG/sgs/hg