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 HTML & Adobe PDF formats) are available on the NM Legislative Website (legis.state.nm.us).  Adobe PDF versions include all attachments, whereas HTML versions may not.  Previously issued FIRs and attachments may also 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

Snyder

DATE TYPED

2/11/04

HB

 

 

SHORT TITLE

Sanitary Projects Funding & Associations

SB

424

 

 

ANALYST

Wilson

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY04

FY05

FY04

FY05

 

 

 

See Narrative

 

 

 

 

 

 

 

 

 

SOURCES OF INFORMATION

LFC Files

 

Responses Received From

Environment Department (ED)

 

SUMMARY

 

Synopsis of Bill

 

Senate Bill 424 revises and updates the Sanitary Projects Act (NMSA 3-29-1 et seq.) by deleting language regarding the already defunct Sanitary Projects Fund and strengthening the accountability of associations formed under the Act.

 

Significant Issues

 

Over 200 mutual domestic associations have been formed under the Sanitary Projects Act.  The ED has sole oversight authority over these organizations and this authority is clouded by archaic language tied to the sanitary project fund, which no longer exists.

 

Under the Safe Drinking Water Act, the ED’s Drinking Water Bureau is responsible for developing the managerial, financial, and operational capacity of water systems.  The most frequent complaints regarding these associations received by the ED concerns unfair or preferential practices, and poor or no financial accounting. The proposed revisions will strengthen the managerial and financial accountability of the associations.

 

 

ED believes the revisions to the Sanitary Projects Act to clarify and update archaic language are sorely needed.  The revisions will clearly define associations as political subdivisions of the State.

 

The powers of a board of directors will be clarified to address problems encountered with setting and collecting service charges.  The bill will permit ED to appoint a representative to oversee operations and allow for periodic reviews of the association.

 

Funds to operate the association must be derived from a rate setting analysis that includes a reserve fund for maintenance and future replacement of equipment.  Elements that must be included in articles of incorporation will be expanded to include the definition and voting rights of members, and elements to be included in bylaws will be added.

 

A new section provides guidelines for associations to merge, thereby encouraging regionalization.

 

FISCAL IMPLICATIONS

 

The ED oversight of mutual domestic associations should produce more efficient accounting and more effective use of resources.

 

 

ADMINISTRATIVE IMPLICATIONS

 

The addition of a membership accountability report submitted to the ED will require additional staff time for tracking and review:

 

DW/dm:lg