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

SPONSOR Lujan

DATE TYPED 02/16/05 HB 488

SHORT TITLE Weatherization Assistance Program

SB

ANALYST Kehoe

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

$200.0

Recurring General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates SB87.

SOURCES OF INFORMATION

LFC Files

Responses Received From

New Mexico Mortgage Finance Authority (MFA)

SUMMARY

Synopsis of Bill

House Bill 488 appropriates $200 thousand from the general fund to the Department of Finance

and Administration (DFA) in FY06 to expand the weatherization assistance program.

Significant Issues

HB488 would expand funding for weatherization services from $800,000 per year at present to

$1 million. Weatherization funds are used to increase the energy efficiency of homes occupied

by low-income people and to improve the health and safety of the household members. The pro-

gram is administered by MFA under a memorandum of understanding with DFA and operated

through community-based nonprofit organizations statewide. The funding contained in this bill

would complement the federal Weatherization Assistance Program funded by the U.S. Depart-

ment of Energy and federal Low Income Housing Energy Assistance Program (LIHEAP), both

currently administered by MFA.

House Bill 488 -- Page 2

Federal funding for weatherization programs has declined in recent years. The President’s pro-

posed budget for next year would reduce LIHEAP funding by $85 million. The state’s appro-

priation for weatherization services declined from $1 million in previous years to $800 thousand

in fiscal year 2005.

According to MFA, low-income homes statewide are in dire need of weatherization services. In

20003-04, federal funds totaled $1.7 million, providing weatherization services for 472 units

statewide.

FISCAL IMPLICATIONS

The appropriation of $200,000 contained in this bill is a recurring expense to the general fund.

Any unexpended or unencumbered balance remaining at the end of fiscal year 2006 would revert

to the general fund.

ADMINISTRATIVE IMPLICATIONS

If funding is approved, DFA would enter into a Memorandum of Understanding with MFA for

administration of the funds.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Duplicates SB87.

POSSIBLE QUESTIONS

1.

What would be the impact on state weatherization programs if the President’s proposed

budget for LIHEAP were adopted.

DH/lg