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

SPONSOR HJC

ORIGINAL DATE

LAST UPDATED

1/27/06

2/15/06 HB 152/HJCS

SHORT TITLE Sustainable Development Testing Site Act

SB

ANALYST Lewis

APPROPRIATION (dollars in thousands)

Appropriation

FY06

FY07

Recurring

or Non-Rec

Fund

Affected

NFI*

(Parenthesis ( ) Indicate Expenditure Decreases)

*See narrative.

SOURCES OF INFORMATION

LFC Files

Responses Received From

New Mexico Environment Department of (NMED)

Energy, Minerals and Natural Resources Department (EMNRD)

Office of the State Engineer (OSE)

Regulation and Licensing Department (RLD)

No Response Received From

Association of Counties (AOC)

SUMMARY

Synopsis of Bill

The House Judiciary Committee substitute for House Bill 152 enacts the Sustainable Develop-

ment Testing Site Act. The act allows county planning commissions, after review by the De-

partment of Environment and the Office of the State Engineer, to permit specific rural areas as

“sustainable development testing sites” to which (as specified in the testing site permit) certain

county codes, ordinances, rules or permits do not apply.

A sustainable development testing site is an area that is:

two acres or less in size;

situated wholly outside the planning and platting jurisdiction of a municipality; and

subject to a testing site permit and existing federal laws and regulations.

A testing site permit will be issued only after evaluation of the permit application by the Depart-

ment of Environment and the Office of the State Engineer and a public hearing. The permit shall

House Bill 152/HJCS – Page

2

include:

1)

the specific sustainable development research that may be conducted at the testing site;

2)

the maximum number of structures that may be constructed;

3)

the maximum number of individuals that may inhabit the site;

4)

the specific county codes, ordinances, rules and permits relating to construction or building

requirements, occupancy, zoning or subdivisions from which the permittee’s sustainable de-

velopment research is exempt; and

5)

other restrictions as required by rules adopted pursuant to the act or as determined by the

planning commission.

The permit may be issued for a term of up to five years, subject to renewal for another five years,

with no renewal after the second five-year period.

Land within a sustainable development testing site shall not be sold in whole or in part unless the

subsequent owner obtains a testing site permit; or the owner or subsequent owner enters into an

agreement with the planning commission to bring the area within the site into compliance with

all county codes, ordinances, rules and permits that would be applicable to the site in the absence

of a testing site permit.

A county or a planning commission

may define a new category of rules applicable to sustainable development testing sites and

promulgate rules for the category; and

may also promulgate rules or permit conditions applicable to a specific sustainable develop-

ment testing site.

FISCAL IMPLICATIONS

House Bill 152 does not include an appropriation.

The New Mexico Environment Department (NMED) argues that the Sustainable Development

Testing Site Act creates an unfunded mandate in that it requires NMED to review sustainable

development permit applications submitted to counties, but provides no fees to NMED.

SIGNIFICANT ISSUES

According to the Energy, Minerals and Natural Resources Department (EMNRD), HB152 would

provide valuable information and a mechanism to evaluate and potentially implement new sus-

tainable development practices that are currently not allowed under existing laws, while provid-

ing protection against negative environmental and social impacts.

NMED objected that the original bill would have the effect of transferring NMED’s statutory

mandate and authority for protecting public health and the environment to county planning

commissions. However, the HJC substitute clearly requires that all permit applications be evalu-

ated by NMED (and by the Office of the State Engineer) and that the county planning commis-

sion shall not issue a permit unless the State Engineer and the Department of Environment have

determined that the sustainable development testing site or sustainable development research

proposed to be conducted at the site will not damage land, water or air adjacent to the site or will

not permanently damage the area of the site.

The Construction Industries Division (CID) of the Regulation and Licensing Department (RLD)

House Bill 152/HJCS – Page

3

asserts that any rules regulating test sites should be developed by the Environment Department

and the State Engineer so that activities such as waste disposal, air pollution and erosion which

are likely to harm the environment within or outside the site can be controlled. CID/RLD asserts

that it has no statutory authority to create or enforce standards governing these activities.

RLD further asserts that it is virtually impossible to develop rules that would be applicable to

experimental construction given the limitless possibilities inherent in experimentation. Addition-

ally, RLD is concerned that under this bill construction on the test sites could be exempted en-

tirely from building permits and inspections. In that event, because permits and inspections are

the only means of enforcing building codes and standards, the new rules required by the bill

would be unenforceable.

Finally, RLD argues that CID has a well established process for accepting and processing pro-

posed amendments to the state building codes. If experimentation or research on sustainable de-

velopment results in a demonstrable and viable approach to building that is not covered by the

existing building codes, this process is available to those promoting the change. RLD concludes

that forcing adoption of rules on sustainable development before demonstrable value has been

established for a particular alternative to conventional building is neither logical nor a justifiable

use of taxpayer dollars or state resources.

PERFORMANCE IMPLICATIONS

EMNRD suggests that the research facilitated by the Sustainable Development Testing Site Act

could lead to advancements in green building practices, including significant future reductions in

fossil-fuel related energy consumption, that support both Executive Order 2006-01 for “Energy

Efficient Green Building Standards for State Buildings” and the renewable energy and energy

conservation goals of EMNRD’s strategic plan.

NMED worries that, by transferring its authority to the county planning commissions, HB 152

could negatively affect the liquid waste performance and other measures, and could jeopardize

EPA funding.

ADMINISTRATIVE IMPLICATIONS

According to the EMNRD, that department’s review of permit applications could be accom-

plished with existing staff resources.

NMED

questions what enforcement authority would apply, and which agency would apply it, if

a permittee violates the testing site permit and creates a hazard to public health or the environ-

ment. NMED expresses further concern that the bill does not provide for notification of unau-

thorized discharges as required by various state and federal laws and regulations.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

According to NMED, HB 152 conflicts with NMSA 1978 Section 9-7A-15 in that all wastewater

treatment and disposal technologies must be reviewed by the Wastewater Technical Advisory

Committee (WTAC). NMED suggests that experimental technologies that are proven under this

program should be reviewed by the WTAC and placed on the NMED list of approved technolo-

gies for use in New Mexico.

House Bill 152/HJCS – Page

4

TECHNICAL ISSUES

The Construction Industries Division (CID) of RLD raises a number of technical questions and

concerns, including:

What rights would neighboring landholders have with respect to the experimental construc-

tion and research activities that are to be permitted.

There is no definition of “person” in the bill, and there are no qualifications placed on appli-

cants for the proposed permits. For example, if construction is to be performed on the site,

will it be performed by the permittee. Will he, she or it be required to be a validly licensed

contractor.

Once a permit is issued, a county may not revoke the permit without first conducting a public

hearing. This may interfere with a county’s police power. For example, suppose criminal ac-

tivity such as a methamphetamine lab were discovered on a test site. The county should be

able to take immediate remedial action without conducting a hearing.

The bill does not address responsibility for remediation of the site once the permit is termi-

nated or expires. For example, what is to happen to residential or other structures on the site

that are not code compliant.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

EMNRD suggests that, without a mechanism for research that pushes the limits of our existing

codes and regulations, innovative solutions that could dramatically improve and increase sustain-

able development in New Mexico are severely curtailed or dependent on research done in other

states. EMNRD argues that if New Mexico wants to be a leader in the global sustainable devel-

opment effort and wants to take advantage of the state’s unique climate and natural environment,

HB152 will support those objectives.

However, RLD suggests simply that

other less intrusive and unmanageable alternatives for fos-

tering alternative sustainable development could and would be considered.

ML/mt