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F I S C A L I M P A C T R E P O R T
SPONSOR Campos
ORIGINAL DATE
LAST UPDATED
2-3-07
HB 440
SHORT TITLE Solid Waste Facility Grant
SB
ANALYST Aubel
APPROPRIATION (dollars in thousands)
Appropriation
Recurring
or Non-Rec
Fund
Affected
FY07
FY08
$5,000.0
Non-Rec
General Fund
(Parenthesis ( ) Indicate Expenditure Decreases)
REVENUE (dollars in thousands)
Estimated Revenue
Recurring
or Non-Rec
Fund
Affected
FY07
FY08
FY09
$5,000.0
Non-Recurring
Solid Waste
Facility Grant
Fund
(Parenthesis ( ) Indicate Revenue Decreases)
SOURCES OF INFORMATION
LFC Files
Responses Received From
New Mexico Environment Department (NMED)
New Mexico Finance Authority (NMFA)
SUMMARY
Synopsis of Bill
House Bill 440 appropriates $5.0 million from the general fund to the solid waste facility grant
fund for expenditure in fiscal year 2008 and subsequent fiscal years to carry out the purpose of
the fund.
pg_0002
House Bill 440 – Page
2
FISCAL IMPLICATIONS
The appropriation of $5.0 million contained in this bill is a non-recurring expense to the general
fund. Any unexpended or unencumbered balance remaining at the end of FY08 shall not revert
to the general fund.
SIGNIFICANT ISSUES
The solid waste facility grant fund was created in 1995 by Section 74-9-41 NMSA 1978 to
provide grant funding for needed construction, modification, or development of solid waste
disposal and recycling facilities for qualified county and municipal applicants. The fund was
originally “seeded" with $10.0 million from finance authority revenue bonds.
According to NMFA, the solid waste facility grant fund has expended its funding on projects
throughout the state. NMED further details that this grant fund has not been replenished since
1996 and that the current remaining balance of $825,509 is committed by contract.
NMED reports that demand for this grant-funding source remains strong. In 2002, the NMED
Solid Waste Bureau received 40 applications totaling $11.0 million at a time when only $1.4
million was available for that purpose, leaving approximately 20 projects for $9.0 million
unfunded.
NMFA reports that a survey of facility operators and owners was undertaken in 2006 and the
respondents reported that if a grant opportunity were available, they would collectively apply for
$18.5 million for solid waste infrastructure expenditures.
House Bill 440 would replenish the depleted solid waste facility grant fund for funding a variety
of solid waste, diversion, recycling, program improvement and construction projects.
PERFORMANCE IMPLICATIONS
NMED maintains that HB 440 would enable NMED to perform its job better because more
money would be available to communities to bring their landfills into compliance with the law.
ADMINISTRATIVE IMPLICATIONS
NMED states that previous grant implementation procedures would continue to be followed.
Oversight of this program involves NMED’s Solid Waste Bureau and NMED’s Construction
Programs Bureau. The former manages the solicitation, review, prioritization, awarding, and
funding amounts of the grants. The latter oversees the grant once it is awarded, including
supervision of the procurement of professional services, review of plans and specifications for
the bidding and construction phases, oversight of construction, and the project closure.
OTHER SUBSTANTIVE ISSUES
Previously awarded grants made it possible to close 22 landfills, which resulted in the protection
of precious groundwater, the construction of 12 transfer stations to promote cost effective
disposal of waste, and the building or modification of 11 convenience centers to reduce illegal
dumping statewide.
pg_0003
House Bill 440 – Page
3
Many communities across the state hope to implement waste diversion, recycling or composting
alternatives to dispose of waste in a more cost-efficient manner in accordance with the directives
of the Solid Waste Management Act. NMED states that the reality for many communities is that
without a grant-funding source, these programs cannot be implemented.
Other municipalities must close their outdated, unlined landfills in order to decrease potential
groundwater contamination. Numerous counties, cities, towns and villages need to replace old,
inefficient solid waste collection and processing equipment or need to add a new transfer station
or convenience station. Both NMED and NMFA point to the solid waste facility grant fund
program as a proven, productive method to meet these needs.
ALTERNATIVES
Direct appropriation or debt financing may provide options to communities to meet their solid
waste needs.
WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL
Failing to capitalize this fund may negatively impact many communities and counties, especially
small municipalities with limited resources to manage solid waste properly. Communities across
the state face increasing pressure to make system improvements and/or construct new facilities.
Many are struggling economically to properly address their solid waste management obligations
and responsibilities.
POSSIBLE QUESTIONS
1.
Is $5.0 million sufficient in the face of demand.
2.
What uncommitted balance remains in the clean water state revolving loan fund.
3.
Could these grants be tied to a requirement for a portion of the project to be funded by a
loan from the clean water state revolving loan fund.
4.
As part of the approval process, can such grants include language requiring provision for
septage disposal at solid waste facilities to reduce illegal dumping.
5.
Does this program incorporate a state-wide project prioritization process and any fund
leveraging opportunities to maximize the dollars across all funding sources.
6.
Does the state have a strategic plan addressing the solid waste issues facing the state.
7.
How does the packaging of grants and loans fit into this strategic plan.
8.
What are the total future estimated costs to New Mexico to meet the solid waste facility
needs of its communities.
MA/nt