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

SPONSOR Snyder

DATE TYPED 03//11/05 HB

SHORT TITLE Utility Operator Regulation and Fees

SB 293/aSCONC

ANALYST Hadwiger

APPROPRIATION

(in $000s)

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

$70.0

Recurring PWSSOPW

Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates HB153.

REVENUE

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY05

FY06

$70.0

$70.0 Recurring PWSSOPW Fund

($25.0)

($25.0) Recurring

General Fund

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Environment (NMED)

Office of the State Engineer (OSE)

Energy, Minerals and Natural Resources Department (EMNRD)

SUMMARY

Synopsis of SCONC Amendment

The SCONC amendment to Senate Bill 293 would exempt from certification requirements “do-

mestic liquid waste treatment units” that are designed to discharge less than 2000 gallons per day

and that are subject to the Liquid Waste Regulations promulgated by the Environmental Im-

provement Board. The amendment would also reduce the annual cap on fee increases from 10

Senate Bill 293/aSCONC -- Page 2

percent of the existing fee to five percent of the existing fee and make several technical amend-

ments.

Synopsis of Original Bill

Senate Bill 293 amends the Utility Operators Certification Act (hereafter, the Act) to:

1.

Eliminate the distinction between certified operators and certified supervisors;

2.

Add a new definition of the term “operate” to the Act to provide guidance regarding who

must be certified;

3.

Place administration and enforcement of the Act under the Department of Environment

(NMED) rather than under the Water Quality Control Commission (WQCC) under cur-

rent statute, including allowing NMED to suspend or revoke a certification under speci-

fied circumstances, to enforce compliance orders, and to conduct public hearings pursu-

ant to appeals and maintain a record of same;

4.

Allow the WQCC to adopt rules relating to the administration and enforcement of the

Act;

5.

Allow the WQCC to adopt criteria for identifying the minimum number of certified op-

erators needed to operate the various classifications of public water supply systems or

public wastewater facilities to protect public health;

6.

Increases the maximum fees:

a.

For examination for certification as a certified operator in each classification from

$25.00 to $200.00

b.

For renewal of a certificate after a period set by rule from $10.00 to $200.00

c.

For issuance of a certificate by endorsement from $25.00 to $200.00.

7.

Fees would not be increased more than once per calendar year, with the first increase not

to exceed $50.00 and subsequent increases not to exceed 10 percent of the existing fee;

8.

Amends the purpose and administration of the public water supply system operator and

public wastewater facility operator fund;

a.

Under current statute, the fund is used to make necessary refunds. At the end of

each month after refunds, the remaining balance is transferred to the general fund

by the State Treasurer.

b.

Under SB293, the fund would be used for administering and enforcing the Act. It

would be administered by NMED. Money in the fund would be appropriated to

NMED. Balances would not revert but would be credited to the fund, as would

earnings.

9.

Makes it illegal to allow operation of a public water or wastewater facility unless the fa-

cility is operated or under the supervision of a certified operator who meets or exceeds

the appropriate certification level;

10.

Allows appeals of compliance order hearing outcomes to the WQCC based on the record;

and

11.

All penalties collected from compliance orders pursuant to Section 61-33-10 NMSA

1978 would be deposited in the general fund (as at present) but to the credit of the current

school fund.

Significant Issues

According to NMED, currently, there are 2,954 water and wastewater certified operators in New

Mexico. There are approximately 1,300 public water systems and 400 public wastewater systems

Senate Bill 293/aSCONC -- Page 3

that are required to have certified operators. Depending on the size of the water or wastewater

system, one or more certified operators may be required. There are a significant number of pub-

lic water systems that do not have certified water operators. SB293 strengthens the New Mexico

Environment Department’s ability to enforce the requirement to have certified water and waste-

water operators to protect public health, safety and welfare.

The Utility Operator Certification Program affects most New Mexicans; the program provides

training, testing and licensing to ensure public utility operators have the knowledge and skill to

properly operate and maintain public water and wastewater systems. Proper operation of these

public facilities is critical because:

Improper operation can seriously jeopardize public health by allowing operational failures

that can result in unsafe drinking water or sewage spills.

The state has invested billions of public dollars in water and wastewater utility infrastructure

statewide, and this investment must be protected.

Proper operation protects the environment, especially the quality of our limited ground and

surface water resources; one of the worst fish kills in New Mexico in recent years was caused

by an improper discharge from a drinking water plant to the Rio Ruidoso, a result of operator

error.

According to NMED, SB293 would provide necessary resources to protect public health through

this program and would modify outdated statutory provisions which hamper the effectiveness of

the program.

FISCAL IMPLICATIONS

The General Fund would lose $20-50.0 thousand per year if this bill were adopted and revenues

from the public water supply system operator and public wastewater facility operator fund were

dedicated to the NMED program.

The State Parks Division (SPD) of EMNRD was concerned that the bill could impose significant

costs upon that agency depending upon implementation. Currently, SPD employs 29 licensed

water/wastewater operators in order to properly maintain and operate utility systems owned by

SPD. The bill allows a phased-in increase from $25.00 up to $200.00 for the renewal of utility

operator licenses. This increase, multiplied by the number of licensed operators the division is

required to employ, will come directly out of the division's operating budget. SPD indicated the

increases may dramatically add to the financial burdens the Division is currently faced with and

in future years. This concern appears exaggerated as the bill would allow the fee to increase by

only $25.00 the first year, $5.00 the next year, etc. Thus the fiscal impact on SPD would be 29

operators times $25.00 per certificate or a total $725.00. The next year, the bill would increase

costs by $145.00. If the full increase allowed by the bill were imposed annually, the fee would

not reach $200.00 for 15 years.

Continuing Appropriations

This bill creates a new fund and provides for continuing appropriations. The LFC objects to in-

cluding continuing appropriation language in the statutory provisions for newly created funds.

Earmarking reduces the ability of the legislature to establish spending priorities. To eliminate

the continuing appropriation, the bill could be amended on page 9, lines 1 and 2, “is appropriated

to the department” and insert “shall be retained by the department for use, subject to appropria-

Senate Bill 293/aSCONC -- Page 4

tion by the legislature” in lieu thereof.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Duplicates HB153.

OTHER SUBSTANTIVE ISSUES

The proposed amendments were developed through a stakeholder workgroup convened in May

2003; the workgroup included representatives of NMED, certified operators, municipalities, and

rural water systems. The language in SB293 is the same as the language included in HB172 and

SB131 in the 2004 legislative session. The language has not changed since approval by the

workgroup in 2003.

POSSIBLE QUESTIONS

1.

How will NMED use the additional funding to improve the Utility Operator Certification

Program.

2.

How many operators lack the necessary certification at present.

DH/sb:lg