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

SPONSOR Griego

ORIGINAL DATE

LAST UPDATED

2-19-07

3-15-07 HB

SHORT TITLE Solar Rights Act Definitions & Installations

SB 1031/aSCONC/aHJC

ANALYST Aubel

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY07

FY08

FY09 3 Year

Total Cost

Recurring

or Non-Rec

Fund

Affected

Total

$0.01

Recurring

See

narrative

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates HB 611/HENRCS /aSFL#1

Relates to HB 610

SOURCES OF INFORMATION

LFC Files

Responses Received From

Energy, Minerals and Natural Resources Department (EMNRD)

Attorney General’s Office (AGO)

New Mexico Environment Department (NMED)

SUMMARY

Synopsis of HJC Amendment

The House Judiciary Committee amendment reinserts the July 1, 1978 effective date that had

been eliminated by the Senate Conservation Committee amendment, thereby reinstating the

provision that voids solar collector restrictions in agreements and other documents related to real

property going back almost 30 years to the effective date of the Solar Rights Act.

Two opposite interpretations of this provision have been forwarded. EMNRD suggests that

without the date the provision applies only to those documents relating to real property moving

forward from the bill’s effective date. However, NMED suggests the opposite: that without the

date the provision would apply to all listed contracts relating to real property, not just those

dating from July 1, 1978. These differing interpretations indicate some confusion regarding this

provision.

In addition, ENMRD points out that retroactively voiding restrictive covenants on real property

from this date may violate Article II, Section 19 of the New Mexico Constitution, which

prohibits the impairment of contractual obligations unless it is a valid exercise of the state’s

Senate Bill 1031/aSCONCS/aHJC – Page

2

police power, as follows:

“No ex post facto law, bill of attainder nor law impairing the obligation of contracts shall be

enacted by the legislature."

The technical issue of including counties in statute relating to municipalities remains.

Synopsis of SCONC Amendment

The Senate Conservation Committee Amendment makes two fundamental changes to Senate Bill

1031. First, in the case of historic districts in a county or municipality, solar collector placement

could be restricted

as well as regulated, removing the requirement to not prohibit solar collector

placement.

Second, 7-1-78 as the effective date for voiding restrictions on solar collector placement in

agreements and the other documents was deleted. According to the AGO, this change means

that a covenant, restriction or condition, contained in a deed, contract, security agreement or

other instrument affecting the transfer, sale or use of, or an interest in, real property, that

effectively prohibits the installation or use of a solar collector is void and unenforceable.

EMNRD suggests that this amendment could be interpreted as only affecting the listed

agreements from the time of HB 611’s effective date going forward

According to EMNRD’s interpretation, the amendment scales back potential solar market

deployment that could be implemented in historic districts and in land development with

agreements in force back to 1978; however, broad opportunities would still exist for the solar

markets.

Adding the “county" designation (Page 1, line 23) cleans up the language to agree with wording

earlier in the sentence. However, the technical issue raised by the AGO remains: related sections

of statute would not be appropriately updated to reflect the intent of the bill. Rather, the standard

practice of reconciling various sections through amending all related sections is replaced by

putting statute relating to counties and property conveyances in this section relating to

municipalities.

Synopsis of Original Bill

Senate Bill 1031 enacts a new section in Chapter 3, Article 18 NMSA 1978 (relating to powers

of municipalities) to limit restrictions by counties and municipalities on the installation or use of

solar collectors, including historic preservation districts which may regulate but not prohibit

placement of solar collectors; and voids future covenants or conditions attached to real property

after July 1, 2007 that prohibit the installation or use of a solar collector.

SB 1031 also expands the definition of “solar collector" in NMSA section 47-3-3 of the Solar

Rights Act to include “substances" that collect British Thermal Units from sunshine. The

definition of “solar collector" is also expanded to include devices, substances, or elements that

are used for the conveyance of light to the interior of a building.

Senate Bill 1031/aSCONCS/aHJC – Page

3

FISCAL IMPLICATIONS

EMNRD suggests that SB 1031 would likely increase workload and the need for additional

resources for interpreting and training the revised Solar Rights Act, which would be a recurring

budget impact to its Energy Conservation and Management Division. In addition, new brochures

or educational and outreach material would most likely be required, which would have a non-

recurring budget impact.

SIGNIFICANT ISSUES

SB 1031 strengthens the Solar Rights Act in favor of increased solar market development.

Future prohibitions on solar installations—as currently known to be practiced through covenants,

deeds, contracts, or other agreements relating to real property—would be prevented. Counties

and municipalities would not be able to limit solar access that is protected by the Solar Rights

Act, with the exception that historic preservation districts can regulate, but not prohibit, solar

installations. Restating the proposed “solar collector" and unchanged “solar right" definitions

from the Solar Rights Act would re-emphasize in law that solar access is a significant property

right in New Mexico.

According to the AGO, the language in HB 1031 relating to covenants and restrictions would

appear to allow reasonable restrictions on the installation or use of solar collector, as long as the

restriction does not “effectively prohibit" that installation or use. The case law on this issue is

limited and has examined the ability of homeowner’s associations to enforce restrictions on the

use of real property with respect to solar collection. See Palos Verdes Home Association v.

Rodman, 182 Cal. App. 3d 324 (1986); Garden Lakes Community Association v. Madigan, 204

Ariz. 238 (2003).

PERFORMANCE IMPLICATIONS

EMNRD suggests that the Senate Conservation Committee Amendment scales back potential

solar market deployment that could be implemented in historic districts and in land development

with agreements in force back to 1978, but maintains that broad opportunities would still exist

for the solar market with the amendments included.

SB 1031 would further the goal of increased solar market development.

ADMINISTRATIVE IMPLICATIONS

There would be administration implications for EMNRD if called upon to interpret the revised

Solar Rights Act and provide training.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Duplicates HB 611/HENRCS.

Relates to HB 610 due to revising definitions of “solar collector." SB 1031 and HB

611/HENRCS revise the definition of solar collector in the Solar Rights Act; HB 610 revises the

definition of solar collector in the Solar Collector Standards Act. A single definition of solar

collector should be considered.

Senate Bill 1031/aSCONCS/aHJC – Page

4

TECHNICAL ISSUES

The AGO notes the following technical issues:

Chapter 3, Article 18 of the New Mexico Statutes, relates only to powers of municipalities.

However, Section 1A of this bill restricts the power of counties with respect to solar collectors.

The bill does not amend Chapter 4 which governs the powers of counties. Further, Section 1B of

this bill governs deed restrictions and covenants, but does not amend Chapter 47 of the New

Mexico Statutes, which relates to private property conveyances. If this bill is enacted, the

restrictions on counties and private property conveyances would be placed in the sections of New

Mexico law governing the powers of municipalities.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

Increased solar market development may be hindered due to solar-access-limiting practices of

local governments, historic preservation districts, and property agreements from the effective

date of the bill.

MA/nt