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committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

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

SPONSOR Balderas

ORIGINAL DATE

LAST UPDATED

2-1-06

HB 618

SHORT TITLE

SOLID WASTE TRANSPORTATION GRANT

FUND

SB

ANALYST Hadwiger

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

$5,000.0

Non-Rec

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates SB353.

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

FY08

$5,000.0

Non-Rec

Solid Waste

Transportation

Grant Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY06

FY07

FY08

3 Year

Total Cost

Recurring

or Non-Rec

Fund

Affected

Total

$50.0

$50.0

$100.0

Rec

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Finance and Administration (DFA)

New Mexico Department of Environment (NMED)

New Mexico Municipal League (NMML)

House Bill 618 – Page

2

SUMMARY

Synopsis of Bill

House Bill 618 would create a "solid waste transportation grant fund" consisting of appropria-

tions, gifts, grants, donations and bequests made to the fund, and income from the fund. The

fund would not revert at the end of a fiscal year. Money in the fund would be appropriated to the

Department of Environment for grants to reimburse or partially reimburse solid waste transporta-

tion costs incurred by municipalities that transport solid waste fifteen miles or more from the

boundary of the municipality to a landfill disposal facility. The reimbursement amount would be

per ton of solid waste transported per mile, as established by rule of the Environmental Im-

provement Board.

House Bill 618 appropriates $5 million from the general fund to Solid Waste Transportation

Fund for expenditure in FY06 and subsequent years.

FISCAL IMPLICATIONS

The appropriation of $5 million contained in this bill is a non-recurring expense to the general

fund. Funds would not revert.

NMED indicated the responsibility for developing the application and evaluation criteria would

fall to existing NMED staff. These same personnel would be responsible for reviewing applica-

tions, validating all submissions, selecting grant awardees, administering grants, and ascertaining

grantees’ compliance with all appropriate conditions, terms, and requirements. If additional staff

is required, an estimated annual cost of $50 thousand might be anticipated.

Continuing Appropriations language

This bill creates a new fund and provides for continuing appropriations. The LFC has concerns

with including continuing appropriation language in the statutory provisions for newly created

funds, as earmarking reduces the ability of the legislature to establish spending priorities.

SIGNIFICANT ISSUES

NMED noted that costs to local communities of hauling solid waste have increased substantially

due to increased fuel costs. In addition, some municipalities have the responsibility of closing

old unlined landfills that are leaking pollution into the groundwater. New state-of-the-art lined

landfills are expensive and, as a result, some communities must haul solid waste great distances

for proper disposal.

DFA indicated the bill assumes municipalities operate in a fuel efficient manner in hauling solid

waste. It doesn't address logistical and collection programs like transfer stations to reduce fuel

costs. The bill may be viewed as a statewide taxpayer subsidy to muncipalities operating solid

waste facilities. Local residents typically bear the cost of solid waste collection and disposal ser-

vices.

House Bill 618 – Page

3

ADMINISTRATIVE IMPLICATIONS

NMED indicated that existing NMED staff would be responsible for drafting the regulations and

administrating this grant program, as well as maintaining the program once it is established. The

bill allocates no additional FTEs to fulfill its mandates.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

HB618 duplicates SB353. HB 286 adds $5 million to the Solid Waste Facility Fund to provide

grants to local communities for the capital costs of closing old landfills, transfer stations and

convenience centers, constructing new landfills and purchasing equipment, which complements

HB618 by facilitating the construction of new landfills closer to local communities and by reduc-

ing the distance that solid waste must be hauled.

TECHNICAL ISSUES

Between lines 23 through 25 on page 2, DFA recommends deleting "Any …..revert." The statu-

tory creation of the fund on page 1 (lines 22 through 23) already states it is non-reverting and not

transferable to any other fund.

OTHER SUBSTANTIVE ISSUES

NMED indicated HB618 does not include a provision to encourage the use of alternative fuels,

the purchase of fuel-efficient vehicles or the conservation of fuel.

DH/nt