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 Sen. Padilla
/Rep. Garratt
LAST UPDATED
ORIGINAL DATE 1/31/25
SHORT TITLE
Apprentice and Training Program
Contributions
BILL
NUMBER Senate Bill 24
ANALYST Garcia
REVENUE*
(dollars in thousands)
Type FY25 FY26 FY27 FY28 FY29
Recurring or
Nonrecurring
Fund
Affected
DWS
PWAT
Fund
Indeterminat
e but
minimal
gain
At least
$3,500.0
At least
$3,500.0
At least
$3,500.0
At least
$3,500.0
Recurring
Public Works
Apprentice
and Training
Fund
Parentheses ( ) indicate revenue decreases.
*Amounts reflect most recent analysis of this legislation.
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 FY26 FY27
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected
Local
Governments
Indeterminate
but minimal
Up to $1,000.0 Up to $1,000.0 Up to $2,000.0 Recurring
Local
Governments
GSD
Indeterminate
but minimal
At least $500.0 At least $500.0
At least
$1,000.0
Recurring General Fund
NMDOT
Indeterminate
but minimal
At least
$2,000.0
At least $2,000
At least
$4,000
Recurring
Other state
funds
WSD
No fiscal
impact
$25
No fiscal
impact
$25 Nonrecurring
Other state
funds
Total
Indeterminate
but minimal
At least $3,525 At least $3,500
At least
$7,025
Recurring
Choose an
item.
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Sources of Information
LFC Files
Agency Analysis Received From
Workforce Solutions Department (WSD) Regulation and Licensing Department (RLD)
General Services Department (GSD)
Department of Transportation (NMDOT)
Agency Analysis was Solicited but Not Received From
New Mexico Association of Counties New Mexico Municipal League Senate Bill 24 – Page 2
Because of the short timeframe between the introduction of this bill and its first hearing, LFC has
yet to receive analysis from all requested agencies. This analysis could be updated if that analysis
is received.
SUMMARY
Synopsis of Senate Bill 24
Senate Bill 24 (SB24) amends Section 13-4D-4 NMSA 1978, the “Public Works Apprentice and
Training Act,” to remove the exclusion of street, highway, bridge, road, utility, or maintenance
contracts from public works projects that require employers to make contributions to apprentice
and training programs.
The effect of the bill is that all public works construction contractors will be required to make
contributions to the public works apprentice and training fund administered by the Workforce
Solutions Department (WSD).
This bill does not contain an effective date and, as a result, would go into effect 90 days after the
Legislature adjourns if enacted, or June 20, 2025.
FISCAL IMPLICATIONS
Under the Public Works and Apprenticeship Training (PWAT) Act, employers who are engaged
in public works construction projects are required to either sponsor apprenticeships or contribute
to the public works apprentice and training fund, based on the wages of employees. Rules
adopted by WSD set this contirbution rate at 60 cents per labor hour. SB24 would remove
existing exemptions for projects that fall solely under “Type A: Street Highway, Utility, and
Light Engineering.” If this exemption is removed, the contributions to the public works
apprentice and training fund will increase, providing additional revenue for apprenticeship and
training funds administered by WSD, but it will also increase the costs of previously exempted
construction projects.
Local Government
Local governments would likely see cost increases. According to U.S. Census Bureau data, local
governments account for roughly 30 percent of total highway spending, while the state accounts
for roughly 70 percent. In 2023, LFC estimated a cost of $900 thousand for local governments
for of a similar bill; this analysis assumes a cost of up to $1 million for local governments.
General Services Department
The General Services Department (GSD) uses contractors for construction projects. In the
analysis submitted for this bill, the agency noted contractors may be subject to the bill, but GSD
will experience no direct fiscal impact. However, it is likely GSD contracting costs for
construction projects will increase because of this bill, impacting GSD’s operating costs. In
analysis for a similar bill in 2023, LFC estimated increases to state maintenance contracts of up
to $500 thousand annually and uses that estimate in this analysis.
Department of Transportation
NMDOT notes any increased costs to contractors will be passed on to NMDOT. However, Senate Bill 24 – Page 3
NMDOT cannot precisely assess the fiscal impact of the bill because NMDOT does not pay
contractors an hourly rate.
NMDOT reported 1.8 million labor hours in FY21 and 1.6 million labor hours in FY22. If the
cost had been passed on directly to NMDOT at a rate of 60 cents per hour, this bill would result
in additional annual costs ranging between $983 thousand and $1.1 million. This analysis
assumes a cost of at least $2 million annually to NMDOT in the state’s Road Fund.
In the analysis WSD submitted for SB24, the department noted the state has made significant
investments in road projects and the estimates provided by NMDOT for the 2023 fiscal impact
report would need to be updated to provide a more precise estimate of potential fiscal impacts.
Workforce Solutions Department (WSD)
To implement this bill, WSD reports the agency would need to add functionality to the electronic
PWAT management system to allow Type A projects into the online system for public works
projects. WSD estimates a one-time cost of $25 thousand to make this system enhancement and
reports the ability to use the administrative share allowed in PWAT for this purpose.
SIGNIFICANT ISSUES
Currently, PWAT exempts street, highway, bridge, road, utility, or maintenance contracts from
contributing to apprentice and training programs administered by WSD. SB24 will require all
contractors, not just building trades contractors, performing construction and maintenance work
to:
Contribute to the public works apprentice and training fund for each hour of labor
provided;
Have unpaid contributions withheld for nonpayment; and
Be excluded from bidding on future public works projects if noncompliant.
NMDOT notes the Act previously exempted heavy highway contractors; SB24 would require
these contractors to contribute to the public works apprentice and training fund. Many of these
contractors are already subject to federal on-the-job training obligations, reports NMDOT.
Additionally, NMDOT contractors participate in the New Mexico Technician Training and
Certification Program (TTCP) with the Associated Contractors of New Mexico. The TTCP
provides testing and certification services and associated documentation to ensure that all
materials and highway projects are properly measured and evaluated in accordance with national
standards for transportation construction. The TTCP training programs are specifically designed
for highway construction and are not duplicated by or a part of the WSD apprentice training,
which generally applies to building trades.
Apprenticeship programs combine paid on-the-job training with related classroom instruction,
aiming to prepare individuals for skilled occupations. Federal funding is available to support
registered apprenticeship programs, distributed through the (WSD), and eligible employers may
receive funding to reimburse a portion of the apprentices wages. Registered apprenticeship
programs must meet standards established by the U.S. Department of Labor. Apprenticeships
range between one year and five years in length and typically receive a minimum of 2,000 hours
of on-the-job training and 144 hours of related classroom instruction. According to the WSD,
more than 50 apprenticeship programs operate in New Mexico. Senate Bill 24 – Page 4
Statute allows for distributions from public works apprentice and training fund for approved
apprenticeship and training programs in New Mexico. While several other funding sources for
apprenticeships exist, the public works apprentice and training fund is focused on the
construction and building industries and provides a per-apprentice distribution.
The PWAT program provides costs of the apprenticeship program, totaling $1.9 million in FY24,
and the distribution rate is subject to the availability of funds. WSD distributed $1,700 per
apprentice in FY24 and $1,729 per apprentice in FY23.
Legislation passed during the 2024 legislative session created the workforce development and
apprenticeship trust fund and appropriated $30 million to the fund, which will distribute $5
million, evenly split between PWAT and Apprenticeship Assistance Act programs in FY25 and
FY26. With this increase to the PWAT, WSD projected per-apprentice distributions would
increase in FY25 and FY26.
ADMINISTRATIVE IMPLICATIONS
Public works project owners will need to ensure contractors have not been disqualified from
bidding based on non-compliance with the apprentice and training contribution requirement. It
may be challenging for some agencies to monitor contributions made pursuant to small
maintenance contracts, particularly for those below the $60 thousand limit that would require the
agency to go out for competitive bidding.
In analysis submitted by WSD for a similar bill filed in 2024, WSD reported the department does
not currently require reporting from public works contractors that would be included in PWAT
and is unable to estimate the share of contractors that would opt to pay into the fund, as opposed
to hosting their own apprenticeship program.
TECHNICAL ISSUES
NMDOT notes that removing the exemption applicable to street, highway, bridge, road, utility,
or maintenance contracts may conflict with Section 13-4D-3(A) NMSA 1978 which defines the
approved training programs as applying to “building trades” recognized by the U.S. Department
of Labor Bureau of Apprenticeship and Training or the New Mexico Apprenticeship Council.
OTHER SUBSTANT IVE ISSUES
WSD notes Executive Order 2024-152 requires state agencies to collaborate to develop a
“climate-ready” workforce and set a goal of training two thousand workers in climate-ready
professions by the end of 2026. This executive order includes transportation construction
industries, and WSD has identified construction and infrastructure development as priority
sections for workforce development. While this bill would result in additional costs for state
infrastructure projects, the revenue generated for apprenticeship and training programs would be
used to develop apprenticeships to fill gaps in the existing workforce.
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