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 Cisneros

ORIGINAL DATE

LAST UPDATED

2/16/2007

HB

SHORT TITLE Sustainable Development Testing Site Act

SB 1001

ANALYST Schuss

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates HB 269 as amended

Relates to SB 1164

SOURCES OF INFORMATION

LFC Files

Responses Received From

Office of the State Engineer (OSE)

Energy, Mineral and Natural Resources Department (EMNRD)

Department of Environment (ED)

Construction and Industries Division of the Regulation and Licensing Department (CID)

SUMMARY

Synopsis of Bill

Senate Bill 1001 enacts the Sustainable Development Testing Site Act. The act allows county

planning commissions, after review by the Department of Environment and the Office of the

State Engineer, to permit specific rural areas as “sustainable development testing sites" to which

(as specified in the testing site permit) certain county codes, ordinances, rules or permits do not

apply. A sustainable development testing site is an area that is:

•

two acres or less in size;

•

situated wholly outside the planning and platting jurisdiction of a municipality;

and

•

subject to a testing site permit and existing federal laws and regulations

Senate Bill 1001 – Page

2

A testing site permit will be issued only after evaluation of the permit application by the

Department of Environment and the Office of the State Engineer and a public hearing. Following

the hearing the planning commission will makes its decision in writing. They may issue the

permit if:

•

the testing site or research to be conducted will not damage land, water or air

adjacent to the site or will not permanently damage the area of the site;

•

no existing county codes, ordinances, rules or permits, other than those identified

in the permit, will be violated by the proposed research at the site;

•

the applicant has complied with rules adopted pursuant of the Sustainable Testing

Site Act;

•

the proposed research at the site is beneficial to sustainable development;

•

the site and the proposed research are otherwise beneficial to the county and to the

state; and

•

the applicant has provided a cash bond, an irrevocable letter of credit or any other

surety, including insurance, satisfactory to the planning commission, in the

amount of $100,000, to secure payment for damage caused by the sustainable

development testing site

The testing site permit shall include:

•

the specific sustainable development research that may be conducted at the testing

site;

•

the maximum number of structures that may be constructed;

•

the maximum number of individuals that may inhabit the site;

•

the specific county codes, ordinances, rules and permits relating to construction or

building requirements, occupancy, zoning or subdivisions from which the

permittee’s sustainable development research is exempt; and

•

other restrictions as required by rules adopted pursuant to the act or as determined

by the planning commission.

The permit may be issued for a term of up to five years, subject to renewal for another five years,

with no renewal after the second five-year period. Land within a sustainable development

testing site shall not be sold in whole or in part unless the subsequent owner obtains a testing site

permit; or the owner or subsequent owner enters into an agreement with the planning

commission to bring the area within the site into compliance with all county codes, ordinances,

rules and permits that would be applicable to the site in the absence of a testing site permit.

A county or a planning commission:

•

may define a new category of rules applicable to sustainable development testing

sites and promulgate rules for the category; and

•

may also promulgate rules or permit conditions applicable to a specific

sustainable development testing site.

The bill also states that the permittee shall annually, no later than the anniversary date of the

testing site permit, submit a report to the planning commission, the department of environment,

the state engineer, the energy, minerals and natural resources department and the construction

industries division of the regulation and licensing department describing the sustainable

development research and summarizing the results.

SB 1001 also requires that for each testing site permit issued, the Board of County

Commissioners shall designate a non-elected member of the planning commission or a member

Senate Bill 1001 – Page

3

of the planning commission’s staff to monitor the activities conducted pursuant to the permit,

share information with appropriate state agencies and represent the county in interpreting the

terms and conditions of the permit. The designee or a successor shall serve during the life of the

permit and any renewal thereof.

FISCAL IMPLICATIONS

The New Mexico Department of Environment (ED) states that SB 1001, which is an unfunded

mandate, provides no source of revenue to NMED programs for administrative costs of review.

The bill would require NMED program staff to review sustainable development permit

applications submitted to counties. EPA funding for delegated federal programs to NMED could

be jeopardized if sustainable development projects violate federal requirements.

CID has concerns about a potential loss in the revenue stream generated by permit fees, licensing

fees and fines.

SIGNIFICANT ISSUES

According to the Energy, Mineral and Natural Resources Department (EMNRD) House Bill 269

could provide valuable information and a mechanism to evaluate and potentially implement new

sustainable development practices that are currently not allowed under existing laws, while

providing protection against negative environmental impacts.

The ED notes the following significant issues:

SB 1001 encourages the development and testing of unconventional technologies with

the goal of improving conservation and recycling of natural resources. This bill could have the

effect of transferring some of NMED’s statutory mandates and authority for protecting public

health and the environment to county planning commissions and require counties to make a

determination that proposed projects would not violate federal laws or regulations. The bill does

not exempt sustainable development projects from federal laws and regulations for which NMED

has primacy over (eg. drinking water).

Section 3. B. (1) of SB 1001 requires that a copy of the application for a "sustainable

development testing site permit" be forwarded to OSE and NMED and Section 3. C. requires that

OSE and NMED evaluate the application prior to the hearing and comment to the county

planning commission. Given that the extent of the evaluation is not entirely defined, it is not

clear if NMED can comply with the requirement to provide comments to the planning

commission prior to the hearing. If the Department were to have problems with the proposed

testing site after the review, there is no clear authority allowing the department to disapprove of

the proposal if it conflicts with certain environmental laws or purposes. There is a hearing for

comments prior to granting approval by the respective county but no process for permit

revocation or denial by the department if such a proposal were to conflict or be in violations with

other state laws, including environmental laws.

The addition of a provision that allows county planning commissions to revoke

"sustainable development testing site permits" based upon non-compliance with NMED issued

permits would strengthen protection of the environment at these experimental sites.

Senate Bill 1001 – Page

4

Section 3(7) & Section 8 requires promulgation of rules and regulations with very little

guidance so as to be construed as overly board when such authority attempts to adopt such rules.

Additional guidance and more specificity on the contented of the regulations for such test sites

would make the SB 1001 more palatable.

CID has concerns with the safety of construction on Sustainable Development Testing Sites, and

states the following:

•

To the extent that a county has a building code ordinance, it could elect to require

compliance with its ordinance, but this is entirely discretionary. The state building codes

are minimum

standards for structural safety and should be given due consideration in the

permitting process.

•

The bill does not require that inspections be performed on construction on Sustainable

Development Testing Sites. Without inspections, construction may not meet minimum

building standards and may be unsafe.

•

The bill does not require that construction on SDT sites be performed by licensed

contractors. Therefore, a county could exempt construction on an SDT site from the State

licensing requirements.

PERFORMANCE IMPLICATIONS

The EMNRD notes that under the Executive Order 2006-01 for “Energy Efficient Green

Building Standards for State Buildings", the EMNRD is charged with various responsibilities to

implement green building practices for state buildings. The findings that result from the research

enabled by the “Sustainable Development Testing Site Act" could lead to advancements in green

building practices, including significant future reductions in fossil-fuel related energy

consumption, that support both the above executive order and the renewable energy and energy

conservation goals of EMNRD’s strategic plan.

The ED believes that SB 1001 could allow multiple liquid-waste systems to be installed under

one permit issued by county planning commissions, with no further notice to NMED.

Consequently, many new liquid-waste disposal systems could be installed without being

inspected by NMED and this could negatively affect the Liquid Waste performance measure and

negatively impact the environment. The bill authorizes county planning commissions to

determine whether projects will comply with federal laws and regulations for which NMED has

primacy. If state primacy requirements are not met, performance measures for those programs

could be negatively impacted and the primacy and funding granted by EPA could be jeopardized.

ADMINISTRATIVE IMPLICATIONS

If implemented, the Office of the State Engineer (OSE) will be required to review submittals for

the county. The OSE expects that there will be a minimal amount of applications and therefore

no significant administrative impacts can be anticipated at this time.

The EMNRD states that there would be a negligible administrative impact on EMNRD.

EMNRD’s review of annual reports anticipated as a result of this bill’s enactment could be

accomplished with existing staff resources. Permittees of Sustainable Development Testing Sites

should keep EMNRD informed of clean energy developments; the annual report should be the

vehicle for this to happen, at a minimum.

Senate Bill 1001 – Page

5

DUPLICATION, RELATIONSHIP

Duplicates HB 269 as amended; Relates to SB 1164

TECHNICAL ISSUES

The ED notes that Section 3. A.(8) allows for experimental technologies of wastewater systems

on an experimental basis that does not appear to be consistent with the Department’s approval of

experimental waste water technologies set forth in NMSA 1978, Section 9-7A-15E. Specifically,

SB 1001 conflicts with NMSA 1978 Section 9-7A-15.E in that all wastewater treatment and

disposal technologies are required to be reviewed by the Wastewater Technical Advisory

Committee. Experimental technologies that are proven under this program should be reviewed

by the WTAC and placed on the NMED list of approved technologies for use in New Mexico

prior to use of such experimental system. The bill may also conflict with the Liquid Waste

regulations on lot size which could negatively impact the environment department. County

planning commissions may not have the technical expertise to review sustainable development

test site proposals for environmental or environmental health issues. The bill also requires that

counties would have to make a determination that proposed projects will not violate federal laws

and regulations relating to hazardous waste, drinking water and air quality.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

The ENMRD notes the following consequence:

Without a mechanism for research that pushes the limits of our existing codes and

regulations, innovative solutions that could dramatically improve and increase sustainable

development in New Mexico is curtailed or subject to research that is done in other states. SB

1001 may help New Mexico make all future development sustainable and take advantage of the

unique climate and natural environment.

BS/nt