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

SPONSOR Stewart

ORIGINAL DATE

LAST UPDATED

1-30-07

HB HJM 12

SHORT TITLE New Mexico as Energy Conservation Leader

SB

ANALYST Aubel

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

See Fiscal Impact

Non-Rec

General Fund

See Fiscal Impact

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

FY09

See Fiscal Impact

Recurring General Fund

(Parenthesis ( ) Indicate Revenue Decreases)

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY07

FY08

FY09 3 Year

Total Cost

Recurring

or Non-Rec

Fund

Affected

Total

See Fiscal

Impact

Recurring General

Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to HB 534, SB 543, SB 542, SB 404

Potential Conflict with HB 16, HB 180

SOURCES OF INFORMATION

LFC Files

House Joint Memorial 12 – Page

2

Responses Received From

New Mexico Department of Environment (NMED)

Energy, Minerals, Natural Resources Department (EMNRD)

Public Education Department (PED)

General Services Division, Building Services Department (BSD)

SUMMARY

Synopsis of Bill

House Joint Memorial 12

urges the state to become a leader in reducing greenhouse gases

through resource conservation and the use of alternative energy.

FISCAL IMPLICATIONS

House Joint Memorial 12 does not appropriate funding from any source. However, the initiatives

listed in HJM 12 suggest required recurring (for recurring programs) and non-recurring (for one-

time programs) appropriations for their implementation. These appropriations would range from

the relatively small cost of consumer awareness campaigns, to the intermediate cost of planting

trees, to the significant costs of creating wetlands or providing research grants. Other proposals

contained in HJM 12 would result in a reduction of revenues to the general fund, such as tax

credits. As an indication of such revenue fiscal reductions, the following table presents energy

policy initiatives (Appendix B) from the Executive’s Budget in Brief

. The actual fiscal impact of

specific legislation may vary from these amounts.

Revenue Initiatives (General Fund Fiscal Impacts in Millions)

FY07 FY08

FY09

FY10

Expand definition of biomass for renew-

able energy production credits

-

(0.3)

(0.3)

(0.3)

Alternative fuel refueling facility tax

credit

(0.1) (0.2)

(0.3)

(0.4)

Advanced energy investment tax credits -

(0.2)

(0.2)

(0.2)

Earmark conservation tax for land con-

servation

-

(10.5)

(9.9)

(9.4)

Income tax credit for efficient heating

and cooling

(0.4) (0.7)

(0.8)

(0.8)

GRT holiday for Energy Star appliances -

(0.5)

(0.5)

(0.6)

Increase renewable energy credit for so-

lar appliances

-

(0.1)

(0.1)

(0.1)

Tax credits for “Green" buildings

(0.1) (0.4)

(0.7)

(1.1)

Income tax credit for biofuels distribu-

tors

(0.1) (0.2)

(0.4)

(1.4)

Investment credit for biofuels facilities (0.1) (0.1)

(0.1)

(0.1)

House Joint Memorial 12 – Page

3

Positive, recurring operating budget impacts would accrue from any reduction in energy costs to

the state as a result of implementing strategies promoting energy-efficiency for state-run build-

ings and programs. EMNRD stated that simply replacing 50 of the most-frequently used lights

in a building with

ENERGY STAR-qualified models, the state could save more than $600 a year

per building. Additional operating savings have been noted for energy-efficient buildings, which

usually require a higher up-front cost that is defrayed over time by the lower operating costs.

SIGNIFICANT ISSUES

HJM 12 suggests that human activities are contributing to global warming, which has been fore-

casted to have negative effects such as extreme weather cycles of drought and floods, increased

fire seasons, and loss of habitat and species.

To help combat such changes, HJM 12 requests New Mexico become a leader in energy conser-

vation and related endeavors and specifies several action items to be performed by various gov-

ernmental entities:

•

Governor: declare a “Climate Change Awareness Day" to educate residents about cli-

mate change.

•

Legislature: consider adopting income tax credits for Energy Star certified appliances.

•

Energy, Minerals and Natural Resources Department (EMNRD): Initiate a “Get a Bright

Idea" consumer awareness campaign regarding energy conservation.

•

All State Agencies:

o

Replace light bulbs with compact fluorescent and automatic timers on lights and heat-

ing and cooling systems.

o

Use energy-efficient vehicles for fuel conservation.

o

Encourage employees to carpool or use public transportation.

o

Support sustainable energy production through research.

•

New Mexico Schools: Recycle paper, cardboard, plastic, aluminum and glass.

EMNRD noted that through such activities HJM 12 has the potential to have a broad impact on

energy reduction across the state by raising awareness of climate change issues and putting forth

strategies to address the problem.

PERFORMANCE IMPLICATIONS

HJM 12 may help increase the output of EMNRD programs by greatly facilitating agency efforts

to expand energy efficiency programs renewable energy development.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

HJM 12 relates to several bills that specify tax credits:

Senate Bill 543 and House Bill 534: Sustainable Building Credit

Senate Bill 542: Energy Efficient Appliance Tax Credit

Senate Bill 404: Residential Energy-Efficient Loan

House Joint Memorial 12 – Page

4

Because it recommends replacing incandescent bulbs with more energy-efficient florescent light-

ing, HJM 12 potentially conflicts with House Bill 16 and House Bill 180, which indicate that im-

properly disposed broken fluorescent lights are a contributor of mercury to the environment.

OTHER SUBSTANTIVE ISSUES

EMNRD suggested that HJM12 complements the existing statewide initiatives to make New

Mexico the “Clean Energy State" and the “Lead by Example" initiatives for state government

including Climate Change and Greenhouse Gas Reduction (EO-2005-033); Climate Change Ac-

tion Implementation Team (EO-2006-69); Energy Efficient Green Building Standards (EO-2006-

001); Requiring Increased Use of Renewable Fuels (EO-2005-049) and; meeting the goals of the

Chicago Climate Exchange to reduce carbon emissions.

PED reported that the Public Schools Clean Energy Task Force recommended that new construc-

tion and major renovation of all new school projects set a goal of reducing energy consumption

by 50 percent, based on the national average. To facilitate this process and initiate the practice

of continuous improvement, the task force also recommends doing a pilot program with four to

five schools.

ALTERNATIVES

PED noted that school districts have the option of entering into guaranteed savings contracts with

qualified providers for up to 10 years to finance, purchase and install energy efficiency measures

in their buildings through the Public Building Energy Efficiency Act, 6-23-1 NMSA 1978.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

State agencies will continue to implement energy efficiency and greenhouse emission reduction

programs as mandated in the various executive orders with no additional direction from the legis-

lature.

MA/nt