NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

The LFC is only preparing FIRs on bills referred to the Senate Finance Committee, the Senate Ways and Means Committee, the House Appropriations and Finance Committee and the House Taxation and Revenue Committee. The chief clerks are responsible for preparing and issuing all other bill analyses.

Only the most recent FIR version, excluding attachments, is available on the Intranet. Previously issued FIRs and attachments may be obtained from the LFC office in Room 416 of the State Capitol Building.

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates/Conflicts with/Companion to/Relates to

SOURCES OF INFORMATION

LFC files

SUMMARY

Synopsis of Bill

HB 452 designates the agency responsible for Flood Plain Management Coordination; Creating the Office of State Flood Plain Administration; mitigating flood and mudslide damage.

According to the Regulation and Licensing Department (RLD), HB 452 centralizes the state compliance with the federal flood plain program in the Department of public safety (DPS). DPS coordinates New Mexico's federal flood plain compliance and training activity between various, state, city and county agencies.

The scope of HB 452 includes new construction activity (public and private) and the placement of manufactured homes, on lands within the jurisdiction of the state. HB 452 requires that prior to the placement or issuance of a construction or manufactured home installation permit(s) issuing agencies (state and local) must determine that the site upon which the activity is to take place, complies with federal flood plain requirements. Verification of compliance and enforcement of the flood plain requirements is imputed to the permit issuing agencies (state and local).

Current New Mexico law places the burden to ensure compliance with flood plain requirements on the owner, developer, contractor or manufactured home dealer, prior to placement or construction activity taking place and the local flood plain administrator.

Significant Issues

RLD reports, HB 452 moves the enforcement of federal flood plain construction standards from being the sole responsibility of the local designated flood plain administrator, to the permit issuing agencies (state and local). HB 452 encompasses all public and private property and improvements thereon.

FISCAL IMPLICATIONS

DPS reports, no appropriation is needed in the bill. (Funding has already been appropriated as a 25% match for the flood plain administrator position.)

RLD reports:

• This measure may have significant and recurring impact on the general fund.

• •General fund dollars may be required to fund operations of a Office of State Fund Administration, and the position of State Administrator.

• •General fund dollars may be required to fund the development of rules and regulations, and a program for statewide certification and training for flood managers.

• It is unclear if this measure allows the permit issuance authority and revenue, to remain at the State level, but then transfers "exclusive jurisdiction over permits issued" to the local level.

There is a potentially significant impact on the general fund revenue if the bill does transfer the permitting for residential and commercial buildings, and the installation of manufacture homes, from the state to the local level. The following table shows the general fund revenue from the last two fiscal years from such state permits:

• This measure has the potential to impact county and municipal expenditures by requiring the designation and/or hiring of a local flood plain manager, certain operating and training costs to implement the flood plain program, and the costs of adoption of ordinances.

• This measure could impact the costs of public building and other construction if permitting is transferred from local jurisdictions. Local jurisdictions currently have permit fees which range up to 10 time higher than the Construction Industries Division permit fees.

ADMINISTRATIVE IMPLICATIONS

DPS reports, HB 452 should not effect the administrative tasks of the DPS position. It may add some administrative requirements to other agencies i.e., Construction Industries Division and Manufactured Housing Division.

RLD reports the administrative impact cannot be assessed without clarification of the issues addressed in Other Substantive Issues.

CONFLICT/DUPLICATION/COMPANIONSHIP/RELATIONSHIP

DPS report a position that administers/manages the FEMA 75% funded Community Assistance Program (Flood Plain) has been in place in the DPS for the last seven (7) years. This legislation should not impact that position. DPS does not believe this bill intends to supplement or add to this position.

RLD reports a conflict exists with SB 291 which proposes to establish uniform building codes for all local jurisdictions. These codes would be adopted by the Construction Industries Commission. HB 452 could result in many different building codes.

TECHNICAL ISSUES

RLD asks, what is the difference between Federal Emergency management Agency and the Federal Insurance Administration? These terms are used throughout the bill.

OTHER SUBSTANTIVE ISSUES

According to RLD, the intent and purpose of this bill are unclear. In an attempt to clarify this, three areas are discussed.

Current States

• The DPS currently has a State Flood Plains Administrator who coordinates with federal, state and local jurisdictions.



• The Constructions Industries Licensing Act currently has a provision for the adoption of uniform standards for construction of all buildings, and instillation of modular and premanufatcured commercial units in flood or mud slide areas (Section 60-13-10). These have been addressed under the adoption of the 1997 Uniform Building Code.



• Municipalities and counties have the power under current law to adopt flood and mud slide ordinances. The Construction Industries Division now requires local jurisdiction approval of any zoning and/or ordinance issues before issuing a permit.

Questions Raised

The questions listed below are raised from the perspective of the Construction Industries and Manufactured Housing Divisions in RLD.

• Is it the intent of this bill to allow municipalities and counties to prescribe standards for constructing, altering, installing, or repairing both public and private buildings, including the installation of manufactured houses, and other improvements under a permit system within the designated flood or mud slide hazard area which are different than those standards adopted by the Construction Industries and Manufactured Housing Divisions (p.5, lines 9-13)?



• Is it the intent to grant municipalities and counties jurisdiction over public buildings (p.5, line 10)?



• Is it the intent of the bill to transfer the permit authority from the state Construction Industries and Manufactured Housing Divisions to the level of the county or municipality (p.7, lines 6-8)?



• What are the definitions of standards (p. 5, line 9), a permit system (p.5, line 12), and permits (p.7, line 7), for the purposes of this bill?



• What does exclusive jurisdiction over permits mean (p.7. line 6-7)?



• What are the possible ramifications of the reciprocal agreements authorized as they may relate to questions 1-5 above? P.7, line 23-25 and p. 8, lines 1-2)?

Comments

The following are comments from the Construction Industries Division of RLD:

• This bill may create conflicting construction plan review, permitting and inspector responsibilities due to the different standards and requirements based in different ordinances.



• Under the Construction Industries Licensing Act, the state has the authority for the plan review. Permitting and inspections of all public buildings. This law includes special requirements to assure handicapped accessibility. These provisions in the law assure that the state assumes the responsibility for uniform statewide enforcement and quality control. It is important for the State to retain jurisdiction for public buildings to preclude conflict of interest problems which could occur if local jurisdictions were to review, permit and inspect their own buildings.



• If the public were to be permitted at the local level, the cost of public building projects could increase. Fees currently charged for permitting at the local level range up to 10 times higher than the permit fees of the Construction Industries Division.



• There are currently 33 building departments at the local level which have a range of different responsibilities for permit and inspections depending upon the trade qualifications of their inspectors who must meet state certification standards. Because of the differences, it may be difficult for some local entities to handle certain permit and inspection responsibilities.

DPS reports, non-compliant development will continue in flood plain areas, which could threaten lives and property. Currently public buildings and manufactured homes are building in flood plains with out complying with national flood insurance requirements. Local governments seem to have no control over construction of public buildings, particularly state owned or sponsored construction. Public buildings that are in the flood plain and with no ordinances or codes in place will not be eligible for federal assistance following a federally declared disaster.

On page 1, line 22, change, "office of state flood plain administrator" to " office of state flood plain coordinator". Also change " state flood plain administrator" to state flood plain coordinator".

On page 1, line 21 and 22, change, "There is to be created in the department of public safety ". . .to read: "There is to be created in the department of public safety, technical and emergency support division."

RLD reports the following alternatives:

• This bill could be drafted to simply require the approval of the municipality or county for flood plain requirements before the state building permit is issued.



• This bill could be drafted to more clearly define the need for flood plain review and coordination between the state and local level without changing building standards and permit requirements of the Correction Industries and Manufactured Housing Divisions.



• The specific question raised under substantive issues need to be addressed. Most important is define standards (p.5, line 9, a permit system (p.5, line 12), permits (p.7, line 7), jurisdiction over public buildings (p.5, line 10) and exclusive jurisdiction (p.7, lines 6-7).

LAT/gm