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

SPONSOR SCONC

ORIGINAL DATE

LAST UPDATED

2/8/06

2/12/06 HB

SHORT TITLE Sustainable Development Testing Site Act

SB 650/SCONCS

ANALYST Lewis

APPROPRIATION (dollars in thousands)

Appropriation

FY06

FY07

Recurring

or Non-Rec

Fund

Affected

NFI*

(Parenthesis ( ) Indicate Expenditure Decreases)

*See narrative.

Duplicates HB 152

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 Senate Conservation Committee Substitute for Senate Bill 650 enacts the Sustainable De-

velopment Testing Site Act

to allow counties, after review by appropriate state agencies, to per-

mit specific rural areas as “sustainable development testing sites” in which concepts and inven-

tions related to sustainable development, including energy, housing, rooftop precipitation har-

vesting, sewage treatment, food production and bio-fuel production, can be tested under condi-

tions involving actual year-round inhabitants

on the site, all of whom have signed an acknowl-

edgment that they have read a disclosure statement about the sustainable development testing

site.

A sustainable development testing site is an area that is:

two acres or less in size;

Senate Bill 650/SCONCS – Page

2

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

subject to a testing site permit (issued by a county planning commission) 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, the Office of the State Engineer and other state and local agencies and a

public hearing. The permit shall 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 state laws, county ordinances and state and county rules relating to construction

or building requirements, occupancy, zoning or subdivisions from which the permittee’s sus-

tainable development 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 federal and state law and county ordinances that would be applicable to the site in the absence

of a testing site permit.

A county or planning commission may define a new category of rules applicable to sustainable

development testing sites and promulgate rules for the category. A county or a planning commis-

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

opment testing site. The rules shall be designed to facilitate and encourage sustainable develop-

ment research while maintaining levels of safety and environmental protection equivalent to

those required by rules applicable to areas that are not within sustainable development testing

sites.

FISCAL IMPLICATIONS

Senate Bill 650 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), SB 650 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 objects that the bill would have the effect of transferring NMED’s statutory mandate and

authority for protecting public health and the environment to county planning commissions.

Senate Bill 650/SCONCS – Page

3

However, the act very clearly requires that all permit applications be evaluated by NMED (and

by the Office of the State Engineer and other agencies) and that the county planning commission

shall not issue a permit unless it first determines that, “no state or local agency, evaluating the

testing site permit application … has determined that the sustainable development testing site or

sustainable development research proposed to be conducted at the site will damage land, water or

air adjacent to the site or will permanently damage the area of the site.”

The Regulation and Licensing Department (RLD) asserts that it will be virtually impossible to

develop rules that would be applicable to experimental construction given the limitless possibili-

ties inherent in experimentation. Additionally, RLD is concerned that under this bill construction

on the test sites could be exempted entirely 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.

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, SB 650

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, SB 650 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.

Senate Bill 650/SCONCS – 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,

SB 650 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/nt