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 a vailable 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 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 A. Lujan

DATE TYPED 2/22/05

HB 722

SHORT TITLE New Mexico Health Community Act

SB

ANALYST Hadwiger

APPROPRIATION

(in $000s)

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

See Narrative

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to SB710.

SOURCES OF INFORMATION

LFC Files

Responses Received From

Office of the Attorney General (AG)

Department of Finance and Administration (DFA)

Department of Environment (NMED)

Office of the State Engineer (OSE)

Energy, Minerals and Natural Resources Department (EMNRD)

Department of Health (DOH)

Public Regulation Commission (PRC)

SUMMARY

Synopsis of Bill

House Bill 722 would enact the New Mexico Healthy Communities Act. The Act would require

the Energy, Minerals and Natural Resources Department (EMNRD), New Mexico Department of

Environment (NMED), and municipal and county zoning authorities to identify regulatory and

infrastructure decisions that have health, environmental and cultural impacts on specified com-

munities (particularly those sharing a common ethnic, income or racial background) and to avoid

decisions that would have a disproportionate negative impact on the communities. In particular,

the bill would:

1.

Require the chief administrative officer (secretary of EMNRD or NMED or the chief

administrative officer of the municipal or county zoning authority) to determine whether

a decision concerning a regulated facility may have an impact on an affected community

2.

Require a community impact report prior to any decision concerning a regulated facility

House Bill 722 -- Page 2

including:

a.

The demographic composition (ethnicity, income-level, and racial composition)

of each affected community.

b.

The present and future impacts that the existing or proposed facility will or may

have on the public health, environment or culture of each affected community.

c.

Other known existing and proposed facilities that will affect public health, envi-

ronment or culture of each affected community.

d.

Any other factors that would affect the health, environment or culture of each af-

fected community

3.

Require the CAO, after completion of the community impact report but prior to making a

decision concerning the regulated facility, to give written notice of the application, pro-

ceeding and any public hearing to owners of properties adjacent to the facility. The

CAO would also provide notice to other community residents through all of the follow-

ing media: a newspaper of general circulation, by mail (to individuals who request a no-

tice), posted on a web site, and provided in at least one additional medium (television,

radio). The notice would be in English and any other written language appropriate to the

affected community.

4.

Prohibit agencies from making any decision concerning a regulated facility if the deci-

sion would result in disproportionate public health, environmental or cultural impact or

risk being imposed on the members of any ethnic, income-level or racial population of

an affected community or would result in a concentration of regulated facilities in an af-

fected community.

5.

Allow individuals to undertake civil actions to compel agency compliance with the Act

and establish a process for such actions.

6.

The provisions of the Act would be in addition to other regulatory requirements for lo-

cating and operating a regulated facility.

7.

Contrary decisions made after July 1, 2005 would be void if not in substantial compli-

ance with the Act.

Significant Issues

According to the Department of Health (DOH), environmental health risks have consistently

been higher in racial and ethnic minority and low-income populations.

The New Mexico

Healthy Communities Act would prevent disproportionate, negative public health, environmental

and cultural impacts on members of ethnic, low income-level and disenfranchised populations.

DOH indicated that HB722 supports critical components for fostering healthier communities in-

cluding assuring comprehensive assessments of the potential impact of a regulated facility lo-

cated within communities; the impact of public, environmental, cultural, social and economic

health of the residents; and the need to provide mechanisms for critical partnerships and between

communities, regulatory agencies and regulated facilities in protecting the publics’ health.

The AG noted that HB722 is designed to achieve the commendable goal of enhanced community

involvement in regulatory decision making and zoning. As structured, however, the bill imposes

potentially burdensome requirements on NMED, EMNRD and local governments. This added

burden will likely significantly slow down and increase the cost of regulation. In turn, this ad-

ministrative burden will likely result in increased costs to the regulated businesses.

The AG also indicated that the citizen suit provisions appear to create a significant new waiver of

New Mexico’s sovereign immunity without explicitly amending the New Mexico Tort Claims

Act. New Mexico taxpayers would be potentially liable for attorney fees and costs for successful

House Bill 722 -- Page 3

citizen suits against the State of New Mexico to enforce this bill. The AG was concerned that

the lack of objective criteria to make the determination of whether an action would result in a

disproportionate public health, environmental or cultural impact or risk being imposed on mem-

bers of an ethnic, income level or racial population of an affected community opens the doors for

litigation by anyone dissatisfied with the agency or local government decision. Additionally,

according to the AG, indefinitely permitting citizen suits following regulatory approval could

have a chilling effect on industry, as companies are likely to be concerned that their permits will

indefinitely remain in a state of limbo, subject to a citizen suit challenging them. These lawsuits

will also result in additional regulatory delays and significant legal costs in defending the state

agencies even if the courts ultimately rule in favor of the regulatory agency.

NMED identified the following concerns with the general provisions of HB722:

1.

This bill would greatly increase costs to a business seeking a zoning change from a local

government or permit from NMED or EMNRD. Any projects funded by NMED such as

drinking water system improvements may also be subject to the requirement of a com-

munity impact report.

2.

The bill contains no objective criteria for determining whether an action would result in a

disproportionate public health, environmental or cultural impact or risk being imposed on

members of any ethnic, income level or racial population of an affected community.

Also, no objective criteria are given for determining what is an “affected community.”

3.

A community impact report must be prepared when, in the opinion of the chief adminis-

trative officer, there may be an impact on an affected community, but the bill provides no

criteria for making this determination. The bill also requires that the community impact

report be in English and any other written language most appropriate to the affected

community. However, there is no definition of the “most appropriate” language for the

writing of the report. Although this determination may be readily assumed, perceptions

and assumptions often vary.

4.

With the exception of the demographic information required, the other required compo-

nents of the community impact report are difficult to define. Rules promulgated under

the Act must be specific and definitive of “future impact”, types of “other known existing

and proposed facilities” and “other known environmental factors.” In order for the report

to be meaningful and useful.

5.

The public notice requirements are also unclear. For example, the public notice require-

ment is only applicable for those facilities requiring a community impact report. The de-

termination of a need for the report is made by the CAO, which can only be made once

the application has been filed and at least preliminarily reviewed. HB722 states that the

notice shall be given at the time the application or other request for the decision is filed.

6.

Although it seems that the intentions of the section on Prohibited Acts are to prevent

regulated facilities from being permitted that would result in disproportionate impacts on

certain communities, and to prevent an oppressive concentration of such facilities in any

one community, the statement that permitting agencies may not make any decision re-

garding a regulated facility is misguided, as a decision must be made even if it is denial.

House Bill 722 -- Page 4

7.

Because there are no objective criteria for decisions about what would result in a “dispro-

portionate public health, environmental or cultural impact or risk being imposed on the

members of any ethnic, income level or racial population of an affected community,”

there will be much litigation over the meaning of these terms.

EMNRD noted that the scope of the proposed bill is vast. Thousands of facilities in New Mexico

hold permits from EMNRD or NMED. The Oil Conservation Division (OCD) of EMNRD,

alone, processes over 2,000 applications for drilling permits each year. In addition, both

EMNRD and NMED provide funding for numerous projects and facilities, including those in-

tended for energy conservation. The number of facilities covered by local zoning actions is even

greater. EMNRD reiterated many of the comments made by NMED, placed in the context of its

own agency operations.

PERFORMANCE IMPLICATIONS

DOH indicated that HB722 aligns with the Department of Health’s (DOH) Strategic Plan, “Pro-

gram Area 3: Epidemiology and Response – Epidemiology and Response Division strategic di-

rection: Improve capacity of the state to respond to health emergencies”. It also relates to “Pro-

gram Area 1: Objective 6: Prevent and control chronic diseases”.

FISCAL IMPLICATIONS

Implementation of HB722 would require additional responsibilities of NMED and EMNRD as

well as local governments. The full extent of these additional responsibilities, and the costs as-

sociated with completing these requirements, cannot be precisely evaluated; however, additional

costs may be incurred with the notification requirements, additional public hearings, increased

possibility and likelihood of litigation, the review of the community impact reports and necessi-

tated responses, as well as additional materials and publications required.

ADMINISTRATIVE IMPLICATIONS

DOH indicated that HB722 as supporting the agency mandate to protect public health, including

environmental exposures. HB722 may result in additional requests for information and data to

DOH from communities concerned about potential health effects of proposed facilities. This will

be provided with existing staff, to the extent of available resources.

NMED indicated this bill will likely increase the amount of time needed to process permits and

projects, and hearing issues will be expanded. In addition, more lawsuits may occur. As stated

above, the full extent of these additional responsibilities, and the time associated with completing

these requirements, cannot be completely evaluated without the implementing regulations.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

SB710 contains much of the same text and intent of HB722, however there are differences in the

text, particularly in the order of the sections. HB722 does not require conspicuous posting of

notices and does not specify that newsletters are allowed as other media for disseminating public

notices. HB722 places the requirement for the community impact report prior to public notifica-

tion; SB710 requires the report after public notification.

House Bill 722 -- Page 5

OTHER SUBSTANTIVE ISSUES

DOH provided the following general background with regard to HB722:

Facilities that affect New Mexico communities’ environment and that are regulated by

EMNRD, NMED or local governments according to their zoning authority tend to be con-

centrated in communities of certain ethnic and economic composition. According to the

Congressional Black Caucus Foundation, Inc. an estimated 50% of African-Americans and

60% of Hispanics live in a county in which levels of two or more air pollutants exceed gov-

ernmental standards. Communities with the greatest number of commercial hazardous-

waste facilities have some of the highest proportions of minority residents. Half of all

Asian/Pacific Islanders and American Indians live in communities with uncontrolled toxic

waste sites. A recent report from the New Mexico Environmental Law Center raised con-

cerns about a municipal waste disposal site, the Southwest landfill in Bernalillo County.

The population disproportionately impacted by the location of this landfill is the largely

Hispanic population of the South Valley and the people of Isleta Pueblo. Currently, deci-

sions about granting permits to regulated facilities are made by state and local governments

according to their zoning authority only. These decisions may not consider the full public

health, environmental, and cultural negative impacts of the regulated facilities on ethnic and

low-income populations.

NMED provided the following comments about agency activities with regard to environmental

justice:

NMED recently concluded a year-long series of “Environmental Justice Listening Sessions.”

These sessions were held to allow citizens to present issues of perceived environmental injus-

tices or issues where regulated facilities were concentrated in communities that fit certain

ethnic, income-level or racial demographics. NMED’s Environmental Justice Policy Com-

mittee drafted a definition of Environmental Justice based on the input received at the listen-

ing sessions. The definition is as follows:

The fair treatment and meaningful involvement of all people, regardless of race, ethnicity,

culture or income level, with respect to the development, implementation, and enforcement

of environmental laws, regulations and policies. Environmental Justice goals are:

1.

Ensure that no community is forced to shoulder a disproportionate burden of the

negative human health impacts, environmental impacts and environmental risks of

pollution or other environmental hazards;

2.

Provide for meaningful participation to all New Mexicans in the development, imple-

mentation and enforcement of environmental laws, regulations and policies.

The Policy Committee has the duty of recommending policy to the Environment Department

that would positively affect and address issues of environmental injustices. The Policy

Committee also drafted an Executive Order that addresses environmental justice for execu-

tive agencies in the state.

DH/yr