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

SPONSOR Cisneros

ORIGINAL DATE

LAST UPDATED

1/30/06

HB

SHORT TITLE

FORESTRY BIOMASS ECONOMIC

DEVELOPMENT

SB 327

ANALYST Weber

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

$100.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Indian Affairs Department (IAD)

Department of Game and Fish (DGF)

Energy, Minerals and Natural Resources (EMNR)

SUMMARY

Synopsis of Bill

Senate Bill 327 appropriates $100 thousand from the general fund to the Indian Affairs

Department to assist the Picuris Pueblo in establishing an economic development program based

on value-added products derived from forestry biomass.

FISCAL IMPLICATIONS

The appropriation of $100 thousand contained in this bill is a recurring expense to the general

fund. Any unexpended or unencumbered balance remaining at the end of FY07 shall revert to

the general fund.

SIGNIFICANT ISSUES

Since 1999, the Energy, Minerals and Natural Resources Department has directed funds to tribal

and local governments, communities, and small businesses to help improve utilization of, and

create markets for, woody biomass from hazardous fuel reduction activities. There is still a void

Senate Bill 327 – Page 2

in assisting start-up and existing woody biomass business with business planning and marketing.

Biomass is organic matter such as wood, plants, residue from agriculture or forestry, and the

organic component of municipal and industrial waste.

•

Options for biomass utilization:

•

Use in conventional wood products

•

Pulp and Paper use

•

Composite wood products

•

Inclusion in plastics cements, etc.

•

Bioenergy

Bioenergy, a developing alternative to fossil fuels, is the use of organic matter such as woodand

related products as well as the organic component of municipal and industrial wastes, to provide

heat, make fuels, and generate electricity. Wood, the largest source of bioenergy, has been used

to provide heat for thousands of years. In addition to heating, biomass can be used, like fossil

fuels, to power automotive vehicle sand generate electricity. Modern technology is working to

improve the efficiency of bioenergy production to increase its marketability. The two leading

options for converting large amounts of biomass in the U.S. to energy are conversion of biomass

to electricity and conversion of biomass to liquid fuels.

The Energy, Minerals and Natural Resources web site reports several new bio-energy projects

are underway in New Mexico. The City of Albuquerque, and New Mexico State University are

carrying a long-term study of a municipal solid waste bioreactor design into the field-scale

construction phase. The cities of Las Cruces and Ojinaga Mexico are jointly studying a process

for growing fuel wood with wastewater sludge.

The U.S. Forest Service is working with the State Forestry Division on two wood chip fueled

power systems at Jemez Mountain schools and the Glorieta Conference Center. Groups in Silver

City and Angel Fire are studying use of lumber mill residues and forest thinnings for fueling a

bio-energy project. New Mexico State University's demonstration of a tumbleweed harvester

could help make this high-energy material a practical energy source.

Rapid growth of the New Mexico dairy industry has greatly increased the production of manure

in New Mexico. The State of New Mexico is working with the U.S. Department of Energy and

Dairy Producers of New Mexico, a local dairy trade organization, to develop a project involving

the use of a bioreactor to produce methane from this waste.

POSSIBLE QUESTIONS

What infrastructure currently exists at the Picuris Pueblo supporting the value-added forestry

biomass initiative.

MW/nt