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F I S C A L I M P A C T R E P O R T
SPONSOR Nava, C.
ORIGINAL DATE
LAST UPDATED
2-8-07
HB
SHORT TITLE Replacement of Liquid Waste Disposal Systems
SB 702
ANALYST Aubel
APPROPRIATION (dollars in thousands)
Appropriation
Recurring
or Non-Rec
Fund
Affected
FY07
FY08
$200.0
Recurring
Corrective Action
Fund
(Parenthesis ( ) Indicate Expenditure Decreases)
REVENUE (dollars in thousands)
Estimated Revenue
Recurring
or Non-Rec
Fund
Affected
FY07
FY08
FY09
$200.0
Recurring Liquid Waste
Assistance 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
$25.0
$25.0
$50.0 Recurring See Fiscal
Impact
Conflicts with SB 920, HB 859
SOURCES OF INFORMATION
LFC Files
pg_0002
Senate Bill 702 – Page
2
Responses Received From
New Mexico Environment Department (NMED)
Office of the State Treasurer (OST)
Attorney General’s Office (AGO)
New Mexico Municipal League (NMML)
SUMMARY
Synopsis of Bill
Senate Bill 702 appropriates $200.0 thousand from the corrective action fund for the purpose of
establishing a liquid waste system assistance fund to be administered by the New Mexico
Environment Department.
FISCAL IMPLICATIONS
The appropriation of $200.0 thousand contained in this bill is a recurring expense to the
corrective action fund. Any unexpended or unencumbered balance remaining at the end of fiscal
year 2008 shall not revert to the corrective action fund.
Continuing Appropriations language (if applicable)
This bill creates a new fund and provides for continuing appropriations. The LFC has concerns
with including continuing appropriation language in the statutory provisions for newly created
funds, as earmarking reduces the ability of the legislature to establish spending priorities.
NMED notes that SB 702 would require the agency to develop qualification criteria for indigent
households and persons and to administer the liquid waste assistance fund. While SB 702 does
not provide additional staff or funding to NMED, the probable recurring nature of the fund
suggests that the program would be ongoing beyond the initial $200.0 thousand appropriation,
making a program expansion likely. This expansion is estimated at .5 FTE, which may be funded
from either the corrective action fund or from general fund.
SIGNIFICANT ISSUES
The purpose of the fund is to assist indigent individuals or households with wastewater systems
that potentially could to impair groundwater quality. The fund would be used to
•
Replace a cesspool or other improper liquid waste system;
•
Purchase, install or maintain and advanced treatment system; or
•
Hook up to an existing wastewater management system.
According to NMED, failed or improperly installed septic systems and illegal cesspools is the
leading source of groundwater pollution and have also impaired 355 river miles in the state.
Indigent residents and households may not have the financial resources to replace or treat
substandard liquid waste systems or the have ability to hook up to wastewater management
systems when those systems are available.
pg_0003
Senate Bill 702 – Page
3
PERFORMANCE IMPLICATIONS
SB 702 would reduce the amount of ongoing water-quality degradation caused by substandard
liquid waste systems.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
SB 702 relates to with House Bill 859, which proposes a $4.0 million appropriation to a new
“cesspool elimination assistance fund."
SB 702 relates to with Senate Bill 920, which proposes to establish a “liquid waste revolving
loan fund" with a $5.0 million appropriation.
TECHNICAL ISSUES
NMSA § 74-6B-7(A) provides that “[t]he legislature may appropriate up to thirty percent of the
annual distribution to the [corrective action] fund pursuant to Section 7-1-6.25 NMSA 1978 to
the department to match federal funds, for underground contamination cleanup, and to address
water needs." AGO states that although the appropriation provided in the bill addresses water
needs, a clarifying amendment either to § 74-6B-7 or to the bill may be useful to avoid
controversy as to whether the appropriation is permitted by § 74-6B-7(A).
Additional technical issues provided by the AGO are as follows:
1.
The concept stated in the last sentence of Section 1(A) (page 1, lines 24-25, beginning with
“Balances") is stated with more specificity in the last sentence of the bill (page 3, lines 6-8).
2.
Section 1(B)(1) (page 2, lines 14-17) refers to a “primary treatment system," but does not
define that term. Presumably, it refers to primary treatment as defined in NMAC
20.7.3.7(P)(6), although no reference is made to the Environment Department’s regulations.
OTHER SUBSTANTIVE ISSUES
The AGO notes that a reduction of $200.0 thousand in the corrective action fund could possibly
impact the ability of that fund to fulfill its direct statutory purpose of cleanups.
ALTERNATIVES
A revolving loan fund is an option.
WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL
Substandard liquid waste systems owned by indigent persons and households will continue to
degrade water quality, resulting in hazards to public health and interference with property rights
and welfare.
pg_0004
Senate Bill 702 – Page
4
POSSIBLE QUESTIONS
1.
Would $200.0 thousand be sufficient to address the wastewater problem posed by those
who would qualify for the fund.
2.
How would the applications be prioritized.
3.
How would the public outreach be successfully implemented to reach the target group.
4.
How would the money be disbursed in accordance with the anti-donation clause.
MA/nt