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 Gonzales
LAST UPDATED
ORIGINAL DATE 2/17/25
SHORT TITLE
North Central NM Economic Development
Dist.
BILL
NUMBER Senate Bill 349
ANALYST Hilla
APPROPRIATION*
(dollars in thousands)
FY25 FY26
Recurring or
Nonrecurring
Fund
Affected
$2,000.0 Nonrecurring General fund
$35,000.0 Nonrecurring General fund
Parentheses ( ) indicate expenditure 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
DFA
No fiscal
impact
$550.0 $550.0 $1,100.0 Recurring
Other state
funds
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Relates to the General Appropriation Act
Sources of Information
LFC Files
Agency Analysis Received From
Department of Finance and Administration (DFA)
Economic Development Department (EDD)
Agency Analysis was Solicited but Not Received From
Office of Housing New Mexico Counties (NMC) New Mexico Councils of Government (COGs)
SUMMARY
Synopsis of Senate Bill 349
Senate Bill 349 (SB349) appropriates $37 million from the general fund to the Department of
Finance and Administration (DFA) to provide grants to public entities for housing planning and Senate Bill 349 – Page 2
construction in the North Central New Mexico Economic Development District (NCEDD). Any
balance at the end of a fiscal year shall not revert to the general fund. No more than ten percent
of the appropriations shall be used for the Department of Finance and Administration (DFA)
to administer the grants.
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
The appropriation of $37 million contained in this bill is a nonrecurring expense to the general
fund. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not
revert to the general fund. DFA is allowed to use 10 percent, or $3.7 million, for administrative
costs, leaving $33.6 million for allocation.
The 10 percent allowance for DFA’s administrative costs is much higher than for other funds
created at the department. Laws 2024, Chapter 7, creates the New Mexico match fund at DFA,
and allows the department to use no more than 3 percent of appropriations to the fund for
administrative expenses. House Bill 2 currently has a $75 million appropriation to the match
fund, meaning DFA could use $2.2 million for administrative costs. Providing a similar
percentage of administrative costs in SB349 would allow consistency from previous legislation.
Having the three percent for administrative costs means DFA can use $1.1 million of the $37
million appropriation in SB349.
SIGNIFICANT ISSUES
The $2 million appropriation is to provide grants for housing planning and the $35 million
appropriation to provide grants to public entities for housing construction and infrastructure.
There is no capped amount that each eligible entity can receive from the fund. The absence of a
capped amount for the matching fund allows for a flexible, case-by-case approach. This
flexibility ensures that each entity applying for the fund can receive needed financial support
without being constrained by predetermined limits. However, no capped amount allows for
varying funding requests and potential fiscal uncertainty. Without a capped amount, there may
be difficulties in allocating resources efficiently and balancing competing needs within the state,
especially if entities are seeking funding simultaneously. Also, the bill does not identify specific
criteria or the process that an eligible entity must follow to qualify for funding, leaving DFA
with complete discretion of the funds.
DFA states that SB349 does not provide long-term maintenance and sustainability of housing
projects funded. DFA notes the bill does not outline equitable distribution of funds for various
public entities in NCEDD, stating that clear guidelines are essential.
Other than the bill outlining that “disbursements of the fund shall be made by warrant of the
secretary of finance and administration,” there is little accountability to keep track of the
disbursement of funds. For similar appropriations, there are guardrails to ensure that the money
being administered to the eligible entity is phased out and are being used for the awarded
purpose. This bill should consider similar guardrails to ensure appropriate awarding. The bill is
unclear as to what happens to unexpended balances eligible entities may have once their Senate Bill 349 – Page 3
project(s) are complete. The concern of reporting requirements, unspecific allocation criteria, and
lack of performance metrics is also a concern noted by DFA.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
Relates to the $75 million appropriation in the General Appropriation Act to the New Mexico
match fund at DFA.
TECHNICAL ISSUES
The bill does not define “public entity” and is unclear what entities would be eligible for
applying for funds. Public entity should be defined.
ALTERNATIVES
DFA states alternatives could be implementing changes to public-private partnerships, targeted
housing tax credits, or housing voucher programs.
Entities in NCEDD could apply also for the New Mexico match fund to leverage federal funding
relating to housing and infrastructure.
EH/hj/SL2