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

SPONSOR Wallace

ORIGINAL DATE

LAST UPDATED

1-23-07

HB 84

SHORT TITLE Local Recycling & Waste Collection Assistance

SB

ANALYST Aubel

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

$1,000.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY07

FY08

FY09 3 Year

Total Cost

Recurring

or Non-Rec

Fund

Affected

Total

$100.0 $100.0

$200.0 Recurring General

Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates SB 193

Relates to HB 16, HB 180, HJM 6

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Health (DOH)

Department of Finance Administration - Local Governments (DFA)

New Mexico Environment Department (NMED)

New Mexico Association of Counties (NMAC)

SUMMARY

Synopsis of Bill

House Bill 84 creates the Local Recycling and Waste Collection Act and appropriates $1.0

million from the general fund to the New Mexico Environment Department to create a fund

called the Local Recycling and Waste Collection Assistance Fund for FY08 and subsequent

House Bill 84 – Page

2

years to provide grants for programs, services, and activities for recycling, diverting and

collecting household hazardous waste and electronic waste.

FISCAL IMPLICATIONS

The appropriation of $1.0 million contained in this bill is termed a recurring expense to the

general fund. Any unexpended or unencumbered balance remaining at the end of FY08 shall not

revert to the general fund. Any income from investment of the fund shall be credited to the fund,

which shall be held in the state treasury and administered by NMED.

CONTINUING APPROPRIATION 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.

While NMED maintained that it has the staff to support the grant program in its Solid Waste

Bureau (SWB), experience with the programs administered through NMED’s Construction

Programs Bureau (CPB) indicates that such community-outreach programs require additional

department resources for successful implementation. While the collection of waste may not

inherently include the more expensive technical expertise associated with the capital outlay

projects of CPB, such ongoing costs as those related to grant administration and implementation,

ongoing grant proposal review, and printed materials for public outreach will continue. Whether

these costs require a recurring general fund appropriation through the budget process or can be

underwritten by an administrative fee charged to the fund by NMED, similar in structure to the

New Mexico Finance Administration capital outlay grants, is not defined in the bill. In either

case, ultimately the source of funds would be general fund and is estimated at 1.5 FTE

equivalent.

SIGNIFICANT ISSUES

Solid waste management in New Mexico will face many issues in the immediate future.

According to NMED, the state has approximately of 30 years of remaining combined municipal

solid waste disposal capacity at existing landfills statewide. In addition, DFA noted that the

remaining disposal capacity is not evenly distributed throughout the state. Rural areas have less

capacity than those located in urban areas and less financial resources to deal with the issue.

Furthermore, NMED stated that recycling programs for e-waste (used televisions, computers,

audio and stereo equipment, printers, faxes, copy machines, telephones, etc), household

hazardous waste, and diversion programs are expensive. Only five counties or municipalities

have the resources to implement household hazardous waste collection programs and only a

handful of governmental entities can afford to hold e-waste collection events, which can coast as

much as $70.0 thousand for a one day event. Grants would assist more communities to conduct

such events.

In addition, DFA noted that communities across the state face increasing costs to properly

address their solid waste management obligations, such as closing or lining substandard landfills.

All agencies responding expressed concern over the limited resources at the local level to deal

with these costs, particularly in the rural areas. As an indication of the resulting demand for

House Bill 84 – Page

3

assistance, DFA noted that in the 2002 grant cycle, the Solid Waste Facilities Grant Act program

received 40 requests totaling $11 million, while at the time only $1.4 million was available in the

fund.

NMED pointed to population and technology increases for the growing volume of e-waste and

household hazardous waste in New Mexico, which will most likely continue, and stated that this

waste can contain toxic materials or chemicals and pose environmental threats when they are

mismanaged, disposed of improperly or dumped illegally, particularly to groundwater.

DOH noted this Act would help protect the public from potential household hazardous and

electronic waste, which could create injury and damage health.

HB 84 compliments the current Solid Waste Facilities Grant Fund currently administered by

NMED. However, as noted by DFA, with the growth in solid and hazardous waste that is

generated by the continuing population increases, the issue of solid waste management will

continue to require additional revenue supplementation.

PERFORMANCE IMPLICATIONS

If enacted, The LFC recommends that NMED submit a plan for program evaluation with specific

program goals and criteria for assessing program effectiveness, with suggested output and

outcome performance measures, to evaluate the performance of the state program as prescribed

in the Accountability in Government Act.

ADMINISTRATIVE IMPLICATIONS

NMED’s SWB would administer and promote the grant program, establish grant criteria, create a

selection committee and work with grant recipients. NMED would also manage the financial

aspects of the grant. As previously noted, it is anticipated that a program expansion to cover all

administrative aspects of the Act would most likely occur.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

HB 84 duplicates Senate Bill 193.

HB 84 relates to House Bill 16 by implementing the Mercury Exposure Reduction Task Force

recommendation to assist local governments in conducting household hazardous waste collection

programs as a means of reducing mercury contamination.

HB 84 relates to House Bill 180, which concerns creating a task force to be lead by NMED for

combating illegal dumping in New Mexico.

HB relates to House Joint Memorial 6, which requests a coalition of entities be formed to combat

illegal dumping in New Mexico.

OTHER SUBSTANTIVE ISSUES

The fund would consist of appropriations, gifts, grants, donations and bequests made to the fund.

NMED would award grants from the fund, giving preference to eligible recipients that do not

House Bill 84 – Page

4

have such existing programs, have large observable quantities of related wastes, and demonstrate

substantial local public support for such programs, services, or activities.

The scope of HB 84 is broad, providing assistance to a large group of local governments and

entities. Eligible recipients will include municipalities, counties, Native American governments,

land grant communities, cooperative associations, solid waste authorities, and educational

institutions. It also addresses various levels of solid waste management, thus allowing for

flexibility in allowable expenses.

ALTERNATIVES

DFA suggested that while HB 84 does provide for additional levels of supplementation, it may

be beneficial if this legislation contained a higher level of available resources and a dedicated

revenue stream.

NMED noted that these initiates could be funded through capital outlay or bonds, but consider

these alternatives less satisfactory because they remove NMED from the review and screening

process to ensure quality control.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

Communities may not have access to funds to develop recycling and diversion programs for

household hazardous waste and electronic waste. Appropriate management of e-waste streams

may be impaired, leading to a negative impact on groundwater and surface water, as well as

public health. As the volume of household hazardous waste continues to grow, without

mitigating programs, so does the potential for illegal dumping.

POSSIBLE QUESTIONS

1.

What are the ongoing administrative costs.

2.

What is the complete strategic plan for managing solid waste in New Mexico.

3.

How would this Act and resulting program fit into the complete strategic plan for solid

waste management in New Mexico.

4.

What are the realistic appropriations required to effectively implement this strategic plan.

5.

Is the $1.0 million appropriation sufficient to meet demand.

6.

Could a disposal fee be tacked on to the purchase of any electronic equipment to fund e-

waste disposal programs.

7.

How would the Legislature guide future appropriations relating to these initiatives

according to its priorities.

MA/nt