NOTE: As provided in LFC policy, this report is
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DATE TYPED: |
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HB |
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SHORT TITLE: |
NMFA Water & Wastewater Projects |
SB |
294/aSCONC/aSFC |
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ANALYST: |
Kehoe |
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APPROPRIATION
Appropriation
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Estimated
Additional Impact |
Recurring or
Non-Rec |
Fund Affected |
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FY03 |
FY04 |
FY03 |
FY04 |
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NFI |
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(Parenthesis
( ) Indicate Expenditure Decreases)
Relates Senate Bill 292, Senate Bill 273 and
House Bill 90
Legislative
Finance Committee Files (LFC)
SUMMARY
Synopsis
of SFC Amendments
Senate Finance Committee amendments to SB 294/aSCONC deletes the $150 million appropriation from the title and contents of the bill and provides legislative authorization to NMFA to make grants for 7 more projects to eligible entities from the Water & Wastewater Project Grant Fund.
Synopsis
of SCORC Amendment
Senate Conservation Committee amendments to Senate Bill 294, Items 1 through 6, are technical corrections; Item 7 provides legislative authorization to NMFA to make grants to 10 eligible entities for 11 projects totaling approximately $39 million.
Synopsis
of Original Bill
Senate Bill 294
appropriates $150 million from the general fund to the Water & Wastewater
Project Grant Fund for the purpose of granting funds for water & wastewater
projects to qualified entities statewide; authorizes NMFA to provide grants to
115 entities for 175 projects statewide; voids authorization unless entities
notify NMFA by the end of fiscal year 2005 of their desire to pursue a grant;
and contains an emergency clause.
Significant
Issues
The Water and Wastewater Facility Grant Fund
Program (WWGF) administered by NMFA was created by the 1999 Legislature for the
purpose of awarding grants for water and wastewater projects to qualified
entities. The authorization provided in
Senate Bill 294 does not guarantee that the entities or projects will be
awarded a grant by NMFA. Applicants are
screened by NMFA based on rules approved by the NMFA governing board and NMFA
Legislative Oversight Committee. An
entity’s financial capability, the average water or wastewater rates charged
and the entity’s median household income could affect the amount of grant
funding eligibility for each project.
The WWGF may also be used to combine NMFA’s
low-cost, low-interest rate loan financing with grants for water and wastewater
projects. If a qualifying entity is
unable to finance a project fully with loan funds, the entity could apply for a
partial grant from grant funds and a partial loan from the Public Project
Revolving Loan Fund (PPRF). A local
match could be determined by a sliding scale based on the applicant’s financial
capability to repay a portion of the project from local resources.
Laws 2002, Chapter 23, broadened the terms and
condition for determining local match requirements for grants made from the
WWGF. Provisions allow a qualified
entity to receive a grant on behalf of another entity or other water systems
based on the financial capacity of the residents of that geographic area
benefiting from proposed improvements.
The new definition allows the consolidating of small water and
wastewater systems, discourages proliferation of multiple systems, and allows
small entities to hook up to larger neighboring systems rather than creating
and maintaining their own system.
FISCAL IMPLICATIONS
The 2002 Legislature appropriated $15 million to the Water & Wastewater Grant Fund. However, the bill providing legislative authority for awarding grants failed to pass the Senate. To date, approximately $6 million of the funds have been expended for emergency projects in fiscal years 2002 and 2003. A balance of $9 million remains in the fund.
RELATIONSHIP
Senate Bill 292
authorizes NMFA to make loans for certain statewide infrastructure projects
from the Public Project Revolving Fund.
If entities seeking financial assistance from NMFA do not qualify for a
grant, it is possible the same entity is listed within Senate Bill 292 seeking
legislative authorization for a loan.
Senate Bill 273
proposes to temporarily increase from $3 million to $5 million the amount NMFA
may disburse per fiscal year for emergency projects without legislative
authority. If approved, the increase
would be in effect for fiscal years 2003 through 2006.
House Bill 90 bill
appropriates $1 million from the general fund to NMFA’s planning fund for
feasibility studies for water and wastewater planning.
LMK/yr/njw:yr