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

SPONSOR Taylor, J.G.

ORIGINAL DATE

LAST UPDATED

1/23/07

HB

SHORT TITLE Expanding the Weatherization Assistance Program SB 328

ANALYST Leger

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

$2,500.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates SB 114

SOURCES OF INFORMATION

LFC Files

Responses Received From

New Mexico Mortgage Finance Authority (MFA)

SUMMARY

Synopsis of Bill

Senate Bill 328 appropriates $2.5 million from the general fund to the Department of Finance

and Administration (DFA) in FY08 for disbursement to the 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 $2.5 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 328 – 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

This bill will increase DFA portion of funds to $3.3 million. Should this bill be passed the total

combined funds would assist 2,600 households.

ADMINISTRATIVE IMPLICATIONS

The MFA will continue to administer the program.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Duplicates SB114. 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.

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 800 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,

subgrantees 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/mt