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

SPONSOR T. Garcia

ORIGINAL DATE

LAST UPDATED

2/17/07

2/27/07 HB 1157/aHHGAC

SHORT TITLE Cerro Mutual Domestic Association Loan

SB

ANALYST Propst

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

$75.0

Non-Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Finance and Administration (DFA)

SUMMARY

Synopsis of Amendment

The amendment clarifies that the original loan was an emergency loan that is due on April 1,

2007 and adds and emergency clause.

Synopsis of Original Bill

House Bill 1157 appropriates $75.0 for the Cerro Mutual Domestic Waster Consumers

Association to repay a loan from the State Board of Finance.

FISCAL IMPLICATIONS

The appropriation of $75.0 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 revert to the

General Fund.

SIGNIFICANT ISSUES

DFA notes that the Cerro Mutual Domestic Water Consumers Association went to the State

House Bill 1157 – Page

2

Board of Finance on September 22, 2005 to ask for a loan to build a six-inch pipeline. The

original request was for $71,939 but this was changed to $75.0 in case the quote changed. The

Cerro Mutual Domestic Water Consumers Association went with a 6-inch pipe to serve the fire

department and receive a lower ISO rating. This new water line will enhance business

development opportunities for the community while lowering homeowners insurance rates.

The loan was due on April 1, 2006; the plan was to request an appropriation from the 2006

Legislature to repay the loan back. The association was unsuccessful in this effort. The Cerro

Mutual Domestic Water Consumers Association then asked for an extension from the State

Board of Finance, the date was extended to April 2007. HB 1157 was introduced to pay off the

State Board of Finance Loan due April 2007.

TECHNICAL ISSUES

HB 1157 does not contain an emergency clause. Therefore if the bill passes, the appropriation

would not be received in time to meet the due date of the loan.

WEP/mt