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.

 

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

 

 

 

SPONSOR:

Larranaga

 

DATE TYPED:

02/24/03

 

HB

864

 

SHORT TITLE:

Wastewater Facility Construction Loan Fund

 

SB

 

 

 

ANALYST:

Kehoe

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

FY03

FY04

 

 

$3,000.0

 

 

 

Non-Recurring

General Fund

 

 

 

 

 

 

(Parenthesis ( ) Indicate Expenditure Decreases)

 

 

REVENUE

 

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

 

 

 

$3,000.0

 

 

Non-Recurring

WFCRLF

$13,000.0

 

 

Non-Recurring

Federal

(Parenthesis ( ) Indicate Revenue Decreases)

 

Duplicates HCOR 1250 and SCOR 781

 

SOURCES OF INFORMATION

 

Environment Department (ED)

LFC Files

 

SUMMARY

 

     Synopsis of Bill

 

House Bill 864 appropriates $3,000,000 from the General Fund to the Wastewater Facility Construction Loan Fund for the purpose of making low-interest wastewater construction loans to eligible entities.

 

     Significant Issues

 

House Bill 864 appropriates $3 million to the Environment Department (ED) to match federal funds totaling $13 million to capitalize the Wastewater Facility Construction Revolving Loan Program administered by ED for the purpose of constructing wastewater collection and treatment facilities in the state to eligible entities.  The Wastewater Facility Construction Revolving Loan Fund (WFCRLF) is restricted to low-interest loans with a current interest base rate of three percent to one percent, with some communities qualifying for hardship interest rates of zero.  Eligible entities include municipalities, counties, sanitation districts, and Native American tribes or pueblos with resources to repay the loans.

 

To date, the state matches and federal allotment of funds to New Mexico has enabled ED to complete over $126 million in the construction of wastewater facilities statewide.  ED currently has a priority list indicating there is over $276 million in unmet wastewater infrastructure needs for communities in New Mexico.  The current uncommitted balance in WFCRLF is $6 million.  

 

FISCAL IMPLICATIONS

 

The $3,000.0 appropriation contained in this bill is a non-recurring expense from the general fund to the Wastewater Facility Construction Revolving Loan Fund. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not revert to the general fund.  The state has until September 2003 to provide a $3 million match to qualify for a federal allotment of $13,000.0 for the Wastewater Facility Construction Revolving Loan Program.

 

DUPLICATION

 

House Bill 864 duplicates HCOR 1250 and SCOR 781.  However, HCOR 1250 and SCOR 781 requests severance tax bond funding as a match for the program rather than general funds.

 

The Executive capital recommendation includes a $3 million match from Rural Infrastructure Fund balances for the Wastewater Facility Construction Revolving Loan.  However, provisions of the Rural Infrastructure Act require that funds be used to make loans and grants to local entities, individually or jointly, for “water supply” or “wastewater facilities.”  The Wastewater Facility Construction Revolving Loan Program is intended for constructing wastewater facilities only.  The commingling of the two funds may violate the intended purpose of both Acts.

 

TECHNICAL ISSUES

 

House Bill 864 should be amended to reflect that the $3 million appropriation is a state match for a federal Environmental Protection Agency grant of $13 million.

 

The following amendments are offered:

On page 1, line 11, between the word “appropriation” and “to”, insert the words “for a match”

 

On page 1, line 16, between the words “fund” and “to,” insert the words “to the state environment department for a state match to a federal Environmental Protection Agency grant”; and

 

On page 1, line 16, change the word “to” to “for”

LMK/njw