NOTE:  As provided in LFC policy, this report is intended only 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 for other purposes.

 

The most recent FIR version (in HTML & Adobe PDF formats) is available on the Legislative Website.  The Adobe PDF version includes all attachments, whereas the HTML version does not.  Previously issued FIRs and attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

 

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

 

 

SPONSOR:

Garcia

 

DATE TYPED:

02/05/03

 

HB

 

 

SHORT TITLE:

Utility Service Areas

 

SB

50/aSCONC

 

 

ANALYST:

L. Kehoe

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

FY03

FY04

 

 

NFI

 

 

 

 

 

(Parenthesis ( ) Indicate Expenditure Decreases)

 

Duplicates Appropriation in the General Appropriation Act

Relates to Appropriation in the General Appropriation Act

 

SOURCES OF INFORMATION

 

LFC Files

 

SUMMARY

 

     Synopsis of SCONC Amendment

 

The Senate Conservation Committee amendment to Senate Bill 50 expands the definition of “association” to exclude licensed or certified septic tank, liquid waste or on-site wastewater system installers, operators, maintenance providers or pumpers as members of an association.

 

     Synopsis of Original Bill

 

Senate Bill 50 prohibits encroachment by a political subdivision, franchise or an extension of service or the offer of services by another utility in an area served by a community water and sewer association during the period an association is indebted to a state agency or instrumentality, including the New Mexico Finance Authority (NMFA).  If encroachment should occur, an association may bring an action in the district court of the county in which the area served by the association is located.

 

     Significant Issues

 

NMFA makes loans to such associations secured solely by a security interest in the association’s net system revenues.  Competition by other utility providers in these service areas may result in a decrease in net revenues securing NMFA loans and may necessitate the restructuring of a loan.  Senate Bill 50 may curtail competition in service areas and may protect poor performing utilities to continue service because of their indebtedness to the state or governmental instrumentality.

 

FISCAL IMPLICATIONS

 

Increased competition may result in decreased revenues, thereby impairing NMFA loans.

 

LMK/prr