Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance

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

if they are used for other purposes.

Current FIRs (in HTML & Adobe PDF formats) are a vailable on the NM Legislative Website (legis.state.nm.us).

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attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

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

SPONSOR Sandoval

ORIGINAL DATE

LAST UPDATED

1/26/07

3/03/07 HB 372/aHCPAC/aHAFC

SHORT TITLE

Home Heating Relief

SB

ANALYST Francis

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

$6,000.0

Non-Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to Appropriation in the General Appropriation Act

Duplicates Appropriation in the General Appropriation Act

Relates to SJM3, HB121, SB325, SB114, SB328

Duplicates SB323

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

FY09

$6,000.0

Non-Recurring Gasoline and Home

Heating Relief Fund

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

Human Services Department (HSD)

Responses Received From

Human Services Department (HSD)

Department of Finance and Administration (DFA)

House Bill 372/aHCPAC/aHAFC – Page

2

SUMMARY

Synopsis of HAFC Amendment

The House Appropriations and Finance Committee amended House Bill 372 changing the

appropriation to the Low-Income Home Energy Assistance Program (LIHEAP) from $9 million

to $6 million. This appropriation is identical to the appropriation for Senate Bill 323 that has

passed the Senate.

Synopsis of HCPAC Amendment

The House Consumer and Public Affairs Committee amended House Bill 372 which makes the

appropriation a nonrecurring appropriation and reverts the balance at the end of FY2007 to the

general fund.

Synopsis of Original Bill

House Bill 372 appropriates $9 million from the general fund to the gasoline and home heating

relief fund for expenditure in FY07 and subsequent years. The money in the fund is to be used

for the low-income home energy assistance program (LIHEAP), a program administered by

Human Services Department (HSD) with state and federal funds.

HSD:

LIHEAP is a grant from US Department of Health and Human Services (HHS) that helps

NM low-income families meet the costs of home heating and cooling one time per year and

increase energy self-sufficiency and reduce vulnerability resulting from energy needs.

HB372 adds general fund to supplement the federal funds available for this purpose.

This bill has an emergency clause and so will take effect immediately upon signing.

FISCAL IMPLICATIONS

As amended, the appropriation of $9 million contained in this bill is a NONRECURRING

expense to the GENERAL FUND. Any unexpended or unencumbered balance remaining at the

end of each fiscal year shall revert to the GENERAL FUND.

SIGNIFICANT ISSUES

In the 2005 special session, $25 million was appropriated to Human Services Division (HSD) to

administer LIHEAP. The session also created the Gasoline and Home Heating Relief Fund as a

vehicle for contributions, appropriations and gifts but the fund has never had a non-zero balance.

Two important features of the LIHEAP program is that HSD will capture 10 percent of the

appropriation for administration and 15 percent of the appropriation will be expended for

weatherization.

HSD:

According to 2006 Fisher, Sheehan & Colton publications, the Home Energy Affordability

Gap for low income households is $600. Although only 71,794 NM households received

House Bill 372/aHCPAC/aHAFC – Page

3

LIHEAP in FFY 2006, there are approximately 180,530 households that meet the LIHEAP

income eligibility limit of 150% of Poverty (2000 Decennial Census 2/2005). Using the

Home Energy Affordability Gap of $600, the total approximate energy need for 180,530

households is $108,318,000. Receiving an undetermined amount in general funds would

help to reduce the un-met need.

HSD has provided a table of the payments shown below. HB372 would fit between the $8

million and the $10 million columns and depending on the level of “point value option" HSD

could serve 33 thousand to over 100 thousand households. At the FY06 level of benefit of $65

per point, the program would serve 36,449 to 40,709 households in FY08. A point value is

based on the available funding and a household’s points are determined by income and family

size.

ADMINISTRATIVE IMPLICATIONS

HSD reports that it will cost $175.1 thousand to re-configure their systems to accommodate

anticipated changes. $101.6 thousand can come from federal funds and $73.5 thousand from the

general fund through the appropriation process. Their analysis also includes a request for 10

percent of the appropriation for administrative costs or $900 thousand. The executive

recommendation for general appropriations included $1 million and the LFC recommendation

included $2 million for LIHEAP.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

The Legislative Finance Committee recommendation for the general appropriation act included a

$4 million appropriation to HSD ($2 million in the base budget and $2 million as a special

appropriation) for LIHEAP and the Executive recommended $1 million in HSD’s budget.

House Bill 372/aHCPAC/aHAFC – Page

4

Senate Bill 323, an identical bill, appropriates $9 million to HSD for LIHEAP to the gasoline and

home heating relief fund, a fund already established for distribution of heating assistance.

House Bill 121 creates a distribution from oil and gas emergency school severance tax and

creates a new fund for the same purposes.

Senate Joint Memorial 3 calls on the Federal government to maintain and increase funding for

LIHEAP.

OTHER SUBSTANTIVE ISSUES

HSD reports that some of the LIHEAP payments are made directly to recipients and may be

considered income for the purposes of other social assistance programs, particularly the food

stamp program.

HSD is concerned that the appropriation is to the Gasoline and Home Heating Relief fund which

is administered by the department of finance and administration rather than directly to HSD.

NF/mt:csd