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

 

 

 

SPONSOR:

Salazar

 

DATE TYPED:

02/24/03

 

HB

795

 

SHORT TITLE:

Payment of Ledoux Water Consumers Loan

 

SB

 

 

 

ANALYST:

Valenzuela

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

FY03

FY04

 

 

 

$110.0

 

 

Non-recurring

General Fund

 

 

 

 

 

 

(Parenthesis ( ) Indicate Expenditure Decreases)

 

SOURCES OF INFORMATION

 

New Mexico Finance Authority

Office of the State Engineer

Department of Environment

 

SUMMARY

 

     Synopsis of Bill

 

House Bill 795 appropriates $110.0 from the general fund to the Department of Environment for the purpose of assisting the Ledoux mutual domestic water consumers association in paying a loan to the U.S. Department of Agriculture.

 

     Significant Issues

 

According to the NMED, the bill could establish a precedent to provide grant money to a community that has demonstrated ability to afford a loan.  Ledoux received a $330,000 grant and $110,000 loan (75%/25%) from USDA Rural Utilities Services in 1999 to make improvements in their water system.  The project is complete and the first payment of $6,000 on the loan is due September 2003.  The loan has a 40-year term at an annual rate of 4.5 percent.

 

Ledoux could seek refinancing of the loan at a lower interest rate and shorter term through the New Mexico Finance Authority Drinking Water Revolving Loan fund or the NMED Rural Infrastructure Program loan.  A 20 year, 2 percent drinking water loan would save the community over $100,000 in interest, at approximately the same annual payment.

 

 

FISCAL IMPLICATIONS

 

The appropriation of $110.0 contained in this bill is a non-recurring expense to the general fund. Any unexpended or unencumbered balance remaining at the end of fiscal year 2004 shall revert to the general fund.

 

MFV/njw