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 López/Pope/Pinto/Sedillo Lopez
LAST UPDATED
ORIGINAL DATE 2/24/2025
SHORT TITLE State Diversity Act
BILL
NUMBER Senate Bill 356
ANALYST Hanika-Ortiz
APPROPRIATION*
(dollars in thousands)
FY25 FY26
Recurring or
Nonrecurring
Fund
Affected
$250.0 Recurring 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
SPO
No fiscal
impact
$275.0 $275.0 $550.0 Recurring General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Sources of Information
LFC Files
Agency Analysis Received From
State Personnel Office (SPO)
SUMMARY
Synopsis of Senate Bill 356
Senate Bill 356 (SB356) appropriates $250 thousand from the general fund to the State Personnel
Office to enact and carry out the provisions of the Diversity Act.
Sections 1 and 2 title the act and define terms, among them "council" to mean the workforce
diversity and inclusion council; "institutional racism" to refer to differential access to goods,
services, and opportunities because of policies or practices that marginalize others, whether
intentional or not; and "workforce diversity" to mean the process of recruiting from a diverse,
qualified applicant pool. Section 3 creates the "chief diversity officer" (CDO) to help agencies
assess barriers and develop strategies to create a diverse, high performing workforce; establish
best practices for leading diverse groups; and create strategies to recruit from underserved
communities. On or before each December 31, the CDO will analyze data, develop policies to
address inequities in hiring, pay or promotions, and conduct anti-institutional racism training.
Senate Bill 356 – Page 2
Section 4 requires the CDO to convene a "workforce diversity and inclusion council" staffed
with liaisons from agencies. The liaisons will implement recommendations proposed by agencies
and the CDO. The CDO will ensure job postings and personnel reviews reflect council findings.
Section 5 says by each July 1, agencies will collect workforce data, assess and update anti-
institutional racism policies, analyze demographic data of companies that win contracts and
grants; assess accommodations for employees with disabilities, and use data-driven approaches
to address solutions. This section also requires the CDO to compile agency reports into one
annual report for the governor and Legislature and to be part of each agency’s annual budget
request submission.
Section 6 requires agency strategic plans to reflect diversity, equity, and inclusion efforts.
The effective date of this bill is July 1, 2025.
FISCAL IMPLICATIONS
The appropriation of $250 thousand contained in this bill is a recurring expense to the general
fund. Any unexpended or unencumbered balance remaining at the end of FY26 shall revert to the
general fund. Although SB356 does not specify future appropriations, establishing a new
program could create an expectation the program will continue in future fiscal years; therefore,
this cost is assumed to be recurring
The State Personnel Director would hire a CDO who would convene a council of liaisons from
state agencies. The council would convene regularly and may form subcommittees as needed.
State agencies would compile and analyze workforce data and develop diversity, equity and
inclusion plans. The appropriation in the bill should cover the costs for year one, but not for
future years.
The State Personnel Office (SPO) estimates the office needs a total of 2 FTE to run the program
at an annual cost of $275 thousand.
SIGNIFICANT ISSUES
The bill provides a framework to support and increase the number of qualified employees in the
state government workforce from underserved populations who would also provide meaningful
contributions to the state and have better paying jobs and opportunities for advancement.
SB356 convenes a council made up of agency liaisons and provides a CDO to oversee the
program. The bill includes data collection and reporting requirements for SPO and the council.
SPO commented that the CDO cannot be both in a classified position, terminated only for just
cause, and serve at the pleasure of the State Personnel Director, which is terminable at will.
Additionally, the bill establishes job requirements for the position of CDO, but SPO says its
office is responsible for adopting the minimum qualifications for classified State employee
positions.
There is currently no requirement to collect demographic data on contractors and similar
positions.
Senate Bill 356 – Page 3
SPO and agencies will need to be able to redact personally identifiable information in reports.
A copy of the council’s annual report is to be published on the SPO website and maintained in
the Legislative Council Service library, the State Library, and the State Records Center and
Archives.
ADMINISTRATIVE IMPLICATIONS
Agencies will designate a “diversity and inclusion liaison” to participate in the council, report to
respective agency heads, and collaborate with the CDO when tracking data and developing
plans.
TECHNICAL ISSUES
SPO believes it would be more fitting for the CDO to “consult with state agencies concerning
compliance with laws and rules relevant to diversity, equity and inclusion efforts.” SPO
emphasizes that each agency is responsible for their own compliance with state laws and
regulations.
SB356 also requires the CDO to “have full access to SPO's human resource management
systems,” but SPO suggests “…access to SPO’s human resources management systems
necessary to carry out the requirements of the act” is more appropriate. While the CDO needs
access to race and gender data, the CDO would not need to access social security numbers,
addresses, or time sheets.
The bill does not include a definition for “demographic data,” which SPO said would be helpful.
OTHER SUBSTANT IVE ISSUES
New Mexico is one of three states and the District of Columbia in which ethnic minorities
comprise the majority.
AHO/SL2/hj