Fiscal impact
reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for
standing finance committees of the NM Legislature. The LFC does not assume
responsibility for the accuracy of these reports if they are used for other
purposes.
Current FIRs (in
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Previously issued FIRs and attachments may also be obtained from the LFC
in
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SPONSOR |
Cisneros |
DATE TYPED |
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HB |
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SHORT
TITLE |
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SB |
446/aSCONC/aSFL#1 |
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ANALYST |
Garcia |
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APPROPRIATION
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Appropriation
Contained |
Estimated
Additional Impact |
Recurring or
Non-Rec |
Fund Affected |
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FY04 |
FY05 |
FY04 |
FY05 |
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NFI |
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(Parenthesis
( ) Indicate Expenditure Decreases)
Duplicates HB 397, except for amendment.
LFC Files
Response
Received From
Public
Regulation Commission
Department
of Finance and Administration
Environment
Department
No
Responses
Association
of Counties
SUMMARY
Synopsis of SFL#1
Amendment
Senate Floor Amendment #1 to Senate Bill 446 adds
language which specifically identifies the counties in which county water and
sanitation authorities may be created. The amendment adds the language “and
under one hundred seventy thousand persons.”
Significant Issues
Under the provisions of this amendment, only
Synopsis of SCONC
Amendment
The Senate Conservation Committee amendment adds
language that “if more than one Indian nation, tribe or pueblo is located
within the territory comprising the territory of the authority, each Indian
nation, tribe or pueblo that is not represented on the board may appoint an
ex-officio nonvoting representative to the board”. This allows an Indian pueblo
to have nonvoting representation on the Authority Board, if the Authority
encroaches on Indian land.
In addition, the amendment adds an exemption to
the ability of the Authority to have the exclusive right to provide water and
sanitation services in the territory where the Authority is located. The
exemption is as follows: “except territory located within municipal limits,
territory that is under the jurisdiction of a municipality or territory
currently served, or that could be served, by a municipal water or sanitation
utility.”
Synopsis of Original Bill
The bill establishes a water and sewer authority
for Class A counties with a population of over 125,000 persons according to the
last decennial census and having an assessed value of over $3.7 billion.
The bill spells out the organization authority
and debt issuance authority of the newly created special districts. The bill
states that a board of five directors from the county where the special district
is created is the governing body. Three of the directors will be elected among
citizens of the particular county and the remaining two directors will be
appointed by the board of county commissioners. Initial directors will all be
appointed by the county commission. The board has all powers and duties vested
in them on the operations of the Water and Sanitation Authority. The bill also
states the Authority is created as a political subdivision and has the power
similar to other political subdivisions.
Section 9.A states that a
county authority created under this new statute may claim all service territory
of the following: “The initial service area of a county water and sanitation
authority…may consist of the territorial limits of the county in which an authority
is established except the territory encompassed within a municipality, an
existing water and sanitation district or the territory actually served on the
effective date of the County Water and Sanitation Authority Act by an existing
mutual domestic consumer water association.
A county water and sanitation authority shall have the exclusive right
to provide water and sanitation services within the territory served by that
authority.”
The bill also goes on to set the terms and
authorization of issuing revenue bonds. The bill states revenue bonds can be
issued for “acquiring real and personal property needed for an authority
project, including the purchase of water rights, etc.” The revenue bonds will
be tax exempt and will not be issued under the state’s credit rating, but the
rating of the special district.
Lastly, the bill allows the
Significant Issues
1) Section 9.A. of this act would allow a
county water and sanitation authority created under the act to claim exclusive
right to service territory within the entire county, notwithstanding that area
already served by a municipality, water & sanitation district, or mutual
domestic water consumer association. According to the PRC, not only would this infringe on the service
areas of other water and/or sewer systems not included in the exclusory
language, it would permanently prohibit any further expansion of any other
system including municipalities, water and sanitation districts, and mutual domestic
water consumer associations.
2) An authority created under this act would
have the power to force any resident to tie into the authority’s sanitation
system within 60 days, with no recourse, whether this is against the resident’s
wishes or ability to pay. The authority
would have the right to place a lien on any resident’s property to pay for a
connection to the system, without need to request the right to place such a
lien from any court or other authority.
3) Section 8.S. of this act gives a
county water and sanitation authority created under the act the power of
eminent domain and condemnation of private property necessary for the exercise
of the powers granted to the authority.
4) Section 10 of this act gives a county
water and sanitation authority created under the act the authority to issue
revenue bonds for acquiring real and personal property. NMSA 1978, §
Section 15 of this act
provides that revenue bonds issued by a
FISCAL IMPLICATIONS
The bill has no direct fiscal impact to the
state. However, it is unclear how or if the bill will affect municipal and
county utilities funding and financing other than defining bond issuance and
governing structures.
DUPLICATION
Senate Bill 446 duplicates House Bill 397.
OTHER SUBSTANTIVE ISSUES
The bill does not mention the service
“The following are declared to be the objects and purposes of this 1991 act. Experience has proven that the construction, development and extension of proper plants and facilities cannot be accomplished without unnecessary duplication and economic waste within areas certificated to water and sewer utilities without controls against duplicative intrusions into certificated areas by municipal utilities. A rational basis exists to prohibit intrusion of municipal water or sewer facilities or service into areas in which a public utility furnishes regulated services until that municipality elects to come within the terms of the Public Utility Act, in which event both systems will be brought into parity of treatment with respect to the commission’s independent jurisdiction and power to prevent unreasonable interference between competing plants, lines and systems. Without such controls as provided by Section 62-9-1.1 NMSA 1978, the declared policy of the Public Utility Act, the provision of reasonable and proper utility services at fair, just and reasonable rates and the general welfare, business and industry of the state may be frustrated.” [§62-3-2.1 C., NMSA 1978.]
A county water and sanitation authority created
under this statute would have no such constraints and would apparently be able
to encroach into a public utility’s service area with impunity.
DG/yr