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

SPONSOR Robinson

ORIGINAL DATE

LAST UPDATED

2/28/2007

3/15/2007 HB

SHORT TITLE

Commuter Rail Act

SB

759/aSJC/aSFC/aSFL#1/a

SFL#2/aHTPWC/aHFL#1

ANALYST Moser

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

FY09

NFI

$1,950.0*

$1,950.0*

Recurring

Commuter

Rail Enterprise

Fund

(Parenthesis ( ) Indicate Revenue Decreases)

*Projected Revenue

SOURCES OF INFORMATION

LFC Files

Responses Received From

NM Department of Transportation (NMDOT)

Public Regulation Commission (PRC)

SUMMARY

Synopsis of House Floor Amendment #1

House Floor Amendment #1 to Senate Bill 759 as amended strikes all Senate Finance

Amendments as summarized below.

Synopsis of HTPWC Amendment

House Transportation and Public Works Committee amendment to Senate Bill 759 strikes the

Senate Finance Committee amendment #2. The SFC amendment provided that the while

NMDOT may dispose of property or right of way related to a commuter rail system to person or

to a state or local government entity that the disposition of the property must be done in accord

with Section 13-6-1 through 13-6-4. These provisions establish procedures and restrictions on

the disposal of state owned property such as public notice of sale, state board of finance approval

and legislative approval if the property is valued at $100,000.00 or more. Without this restriction

Senate Bill 759/aSJC/aSFC/aSFL#1/aSFL#2/aHTPWC/aHFl#1 – Page

2

the NMDOT would be allowed to dispose of property without the oversight provisions normally

applied by law.

Synopsis of SFL Amendment #2

Senate Floor Amendment #2 to Senate Bill 759 establishes that the New Mexico Finance

Authority Act oversight Committee shall oversee the NMDOT’s administration of the Commuter

Rail Act.

Synopsis of SFL Amendment #1

Senate Floor Amendment #1 to Senate Bill 759 as amended strikes section 9 of the Bill in its

entirety. This section had provided that “In order to accomplish its purpose, the Commuter Rail

Act shall be liberally construed."

Synopsis of SFC Amendment

Senate Finance Committee Amendment to Senate Bill 759 as amended modifies:

1.

the NMDOT ability to “…sell, lease or grant easements or rights of way or other

property interests over or otherwise dispose of real or personal property directly

related to a commuter rail system" from a value of “reasonable consideration to

“appraisal value."

2.

Changes the proposed exemption to the Procurement Code to acquisitions of

“…materials and equipment…" rather than to all goods, services, construction or

professional services.

Synopsis of SJC Amendment

Senate Judiciary Committee Amendment to Senate Bill 759 removes the authority of NMDOT to

determine fares. The amendment makes this subject to determination of the Public Regulation

Commission as outlined within the applicable provisions of Section 63-7-1.1 NMSA 1978.

Synopsis of Original Bill

Senate Bill 759 establishes a Commuter Rail Act which gives the NMDOT the necessary

authority to coordinate a program of commuter rail transportation within the state and for

NMDOT to negotiate with neighboring states to expand commuter rail service outside of the

state. It also establishes a Commuter Rail Enterprise Fund for the purpose of planning, design,

ownership, operation, management and supervision of a commuter rail system.

This bill exempts the NMDOT from the provisions of the state’s Procurement Code with respect

to the acquisition of goods, services, construction or professional services related to the

Commuter Rail Act.

FISCAL IMPLICATIONS

The NMDOT estimates that the Commuter Rail Enterprise fund is expected to receive revenues

that will be used on operations of the commuter rail system. The current operational costs, Belen

to Bernalillo, are estimated by MRCOG and the NMDOT at $9.6 million annually. When service

Senate Bill 759/aSJC/aSFC/aSFL#1/aSFL#2/aHTPWC/aHFl#1 – Page

3

is expanded to Santa Fe, it is estimated by the department that operations for the entire route

from Belen to Santa Fe will be approximately $15 million annually.

The NMDOT projects that the Commuter Rail Enterprise Fund will receive the following

revenues:

•

fare box collections - $ 300,000

•

BNSF maintenance payments - $ 1,250,000

•

Amtrak usage fees - $ 100,000

•

miscellaneous permit and license fees for right of way usage - $ 300,000

Total projected revenue $ 1,950,000.

Current operational costs are being offset by Federal Funds available through FHWA Congestion

Mitigation and Air Quality (CMAQ) funding at the rate of $10 million annually for the first three

years of operation.

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.

SIGNIFICANT ISSUES

The bill establishes a Commuter Rail Enterprise Fund that enables the department to deposit

collections from fees, fares and permits; and this fund will serve as the operating fund in future

years for commuter rail.

The bill clarifies and articulates the powers necessary for the department to plan, design,

construct, maintain, own, operate, equip, manage and supervise a commuter rail system. These

powers are more specific and are in addition to the power granted to the department in the Public

Mass Transportation Act. The NMDOT acknowledges that the Public Mass Transportation Act

already provides the NMDOT with the authority and powers necessary to operate a commuter

rail program. Additionally, Section 9 of the bill provides that “In order to accomplish its

purpose, the Commuter Rail Act shall be liberally construed."

This bill further exempts the NMDOT from the provisions of the state Procurement Code with

regard to commuter rail. Concern exists that there would be no controls, rules, regulations or

oversight established within statute that would protect the public’s interest with respect to how

the Commuter Rail Enterprise funds are spent. The NMDOT currently complies with the

provisions of the Procurement Code for all of its programs to include highway construction. It is

unclear as to why the commuter rail system would be exempt from the provisions of the

procurement code.

The PRC expresses significant concern that SB 729 impinges upon the statutory authority of the

PRC’s over railroads. The PRC argues that SB 759 creates a conflict between the Commission’s

authority to set all charges and rates of railway companies and other transportation companies

and common carriers within the state under NMSA 1978, § 63-7-1.1 A and § 4E of the

Commuter Rail Act that gives NMDOT the authority to set passenger fares for Rail Runner.

Senate Bill 759/aSJC/aSFC/aSFL#1/aSFL#2/aHTPWC/aHFl#1 – Page

4

TECHNICAL ISSUES

Amending the Public Mass Transportation Act may be a more appropriate method to addressing

this issue rather than creating a new statute. The NMDOT indicates that it has already been given

powers under the Public Mass Transportation Act to operate a commuter rail service and that the

language of SB 729 clarifies and articulates these powers more specifically to avoid any

misinterpretation of the Department’s authority to operate.

The PRC indicates that a rate-setting conflict between the Commission and DOT could lead to

administrative hearings and/or litigation if not resolved in SB 759.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

The PRC states that passenger rate-setting authority over railroads including Rail Runner will

continue to reside with the Commission.

GM/mt :csd