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).

Adobe PDF versions include all attachments, whereas HTML versions may not. Previously issued FIRs and

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 Martinez, R.

ORIGINAL DATE

LAST UPDATED

1/22/07

1/23/07 HB

SHORT TITLE Expand Weatherization Assistance

SB 114

ANALYST Leger

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

$1,000.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to Appropriation in the General Appropriation Act

SOURCES OF INFORMATION

LFC Files

Responses Received From

New Mexico Mortgage Finance Authority (MFA)

SUMMARY

Synopsis of Bill

Senate Bill 114 appropriates $1 million from the general fund to the Department of Finance and

Administration in FY08 for disbursement to the New Mexico Mortgage Finance Authority

(MFA) to expand the weatherization assistance program to increase the energy efficiency and

reduce energy expenditures of homes occupied by low-income persons in New Mexico. No

more than five percent of the appropriation may be used by MFA for administrative expense.

FISCAL IMPLICATIONS

The appropriation of $1 million contained in this bill is a recurring expense to the general fund.

Any unexpended or unencumbered balance remaining at the end of FY08 shall revert to the

general fund.

Senate Bill 114 – Page

2

SIGNIFICANT ISSUES

According to MFA this bill provides additional funding to the weatherization assistance program

(WAP) which increases the energy efficiency and reduces the residential energy costs of homes

occupied by low-income people, while improving their health and safety.

PERFORMANCE IMPLICATIONS

The current (2006-2007) weatherization assistance program which began July 1, 2006 has

received funding from Department of Energy (DOE), Department of Finance and Administration

(DFA), and Energy Efficiency Act (PNM). As of January 1, 2007 the MFA had not received

Low Income Home Energy Assistance Program (LIHEAP) funds from the Department of Health

and Human Services (HSD), although MFA anticipates funds will be received. Funding

breakdown is as follows:

DOE - $1,857,690

DFA - $ 800,000

PNM - $ 823,453

LIHEAP - $ 710,219

By combining DOE and DFA funds approximately 1,464 units will be served while PNM funds

anticipated 317 units would be served for the full program year. As of 12/31/06 DOE/DFA

funds have served 519 units, PNM has exceeded its units served by five serving 322 units; a total

of 814 units to date have been served. MFA indicates that 1,312 units were assisted during

2004-2005 and 2,577 units during 2005-2006 WAP.

This bill will increase DFA portion of funds to $1,800,000. Should this bill be passed the total

combined funds would assist 1,800 households. Without the funding, 400 households would not

receive assistance.

ADMINISTRATIVE IMPLICATIONS

The MFA will continue to administer the program.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

According to MFA this bill proposes to address the substantial unmet demand for weatherization

assistance throughout the state. Accordingly, a direct consequence of not enacting this bill

would be a reduction of 400 units to the number of low-income households that could be

assisted. The result is more of those household being faced with high energy bills and

continuing health and safety hazards in their homes. Combined savings for energy and non-

energy benefits in 2006 show weatherization returns at $2.69 for every $1 invested.

Funding in the Weatherization program is heavily leveraged, meaning that $1 in funding from

the State can actually mean as much as $3 to the program. Without the proposed funding, sub

grantees will be forced to lay off employees which will be a detriment to the numbers of

households being assisted by all of the other funding sources.

JL/nt