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

SPONSOR HENRC

ORIGINAL DATE

LAST UPDATED

2-19-07

3-15-07 HB CS/611/aSFl

SHORT TITLE Solar Rights Act Definitions & Installations

SB

ANALYST Aubel

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY07

FY08

FY09 3 Year

Total Cost

Recurring

or Non-Rec

Fund

Affected

Total

$0.01

Recurring

See

narrative

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates SB 1031/aSCONC/aHJC

Relates to HB 610

SOURCES OF INFORMATION

LFC Files

Responses Received From

Energy, Minerals and Natural Resources Department (EMNRD)

Attorney General’s Office (AGO)

New Mexico Environment Department (NMED)

SUMMARY

Synopsis of Senate Floor Amendment

The Senate Floor Amendment voids covenants on deeds, security agreements or other

instruments affecting the transfer, sale or use of real property that prohibit the installation or use

of a solar collector, effective July 1, 1978

. This amendment covers real property covenants by

going back 29 years to the effective date of the Solar Rights Act.

Two opposite interpretations of this provision have been forwarded. EMNRD suggests that

without the date the provision applies only to those documents relating to real property moving

forward from the bill’s effective date. However, NMED suggests the opposite: that without the

date the provision would apply to all listed contracts relating to real property, not just those

dating from July 1, 1978. These differing interpretations indicate some confusion regarding this

provision.

In addition, ENMRD points out that retroactively voiding restrictive covenants on real property

from this date may violate Article II, Section 19 of the New Mexico Constitution, which

prohibits the impairment of contractual obligations unless it is a valid exercise of the state’s

CS/House Bill 611/aSFl – Page

2

police power, as follows:

“No ex post facto law, bill of attainder nor law impairing the obligation of contracts shall be

enacted by the legislature."

The technical issue of including counties in statute relating to municipalities remains.

Synopsis of Original Bill

The House Energy and Natural Resources Committee Substitute for House Bill 611 enacts a new

section in Chapter 3, Article 18 NMSA 1978 (relating to powers of municipalities) to limit

restrictions by counties and municipalities on the installation or use of solar collectors, including

historic preservation districts, which may regulate and restrict placement of solar collectors; and

voids future covenants or conditions attached to real property after July 1, 2007 that prohibit the

installation or use of a solar collector.

The bill also expands the definition of “solar collector" in NMSA section 47-3-3 of the Solar

Rights Act to include “substances" that collect British Thermal Units from sunshine. The

definition of “solar collector" is also expanded to include devices, substances, or elements that

are used for the conveyance of light to the interior of a building.

FISCAL IMPLICATIONS

EMNRD suggests that HB 611/HENRCS would likely increase workload and the need for

additional resources for interpreting and training the revised Solar Rights Act, which would be a

recurring budget impact to its Energy Conservation and Management Division. In addition, new

brochures or educational and outreach material would most likely be required, which would have

a non-recurring budget impact.

SIGNIFICANT ISSUES

HB 611/HENRCS strengthens the Solar Rights Act in favor of increased solar market

development. Future prohibitions on solar installations—as currently known to be practiced

through covenants, deeds, contracts, or other agreements relating to real property—would be

prevented. Counties and municipalities would not be able to limit solar access that is protected

by the Solar Rights Act, with the exception that historic preservation districts can regulate, but

not prohibit, solar installations. Restating the proposed “solar collector" and unchanged “solar

right" definitions from the Solar Rights Act would re-emphasize in law that solar access is a

significant property right in New Mexico.

According to the AGO, the language in the bill relating to covenants and restrictions would

appear to allow reasonable restrictions on the installation or use of solar collector, as long as the

restriction does not “effectively prohibit" that installation or use. The case law on this issue is

limited and has examined the ability of homeowner’s associations to enforce restrictions on the

use of real property with respect to solar collection. See Palos Verdes Home Association v.

Rodman, 182 Cal. App. 3d 324 (1986); Garden Lakes Community Association v. Madigan, 204

Ariz. 238 (2003).

CS/House Bill 611/aSFl – Page

3

PERFORMANCE IMPLICATIONS

HB 611/HENRCS would further the goal of increased solar market development.

ADMINISTRATIVE IMPLICATIONS

There would be administration implications for EMNRD if called upon to interpret the revised

Solar Rights Act and provide training.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Duplicates SB 1031.

Relates to HB 610 due to revising definitions of “solar collector." SB 1031 and HB

611/HENRCS revise the definition of solar collector in the Solar Rights Act; HB 610 revises the

definition of solar collector in the Solar Collector Standards Act. A single definition of solar

collector should be considered.

TECHNICAL ISSUES

The AGO notes the following technical issues:

Chapter 3, Article 18 of the New Mexico Statutes, relates only to powers of municipalities.

However, Section 1A of this bill restricts the power of counties with respect to solar collectors.

The substitute bill does not amend Chapter 4 which governs the powers of counties. Further,

Section 1B of this bill governs deed restrictions and covenants, but does not amend Chapter 47

of the New Mexico Statutes which relates to private property conveyances. If this bill is enacted,

the restrictions on counties and private property conveyances would be placed in the sections of

New Mexico law governing the powers of municipalities.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

Increased solar market development may be hindered due to solar-access-limiting practices of

local governments, historic preservation districts, and property agreements.

POSSIBLE QUESTIONS:

1.

Will the confusion regarding the effective date for voiding documents with solar

restrictions relating to real property lead to future lawsuits.

MA/nt:csd