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

SPONSOR Papen

ORIGINAL DATE

LAST UPDATED

1/19/08

HB

SHORT TITLE Local Government Planning Fund

SB 65

ANALYST Kehoe, L.

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

$1,000.0

Non-Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

New Mexico Finance Authority (NMFA)

SUMMARY

Synopsis of Bill

Senate Bill 65 appropriates $1 million from the general fund to the local government planning

fund for the purpose of providing planning funds for water or wastewater system development,

long-term water management, water conservation strategies, or economic development.

FISCAL IMPLICATIONS

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

fund. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not

revert to the general fund.

The bill contains an emergency clause.

SIGNIFICANT ISSUES

The Legislature created the water and wastewater planning fund in 2002 to provide grants for

qualified entities to plan and estimate the costs of implementing the most cost effect and means

to meet water and wastewater public project needs and to assist in paying for the administrative

costs of the program. In 2005, the Legislature changed the name to the local government

Senate Bill 65 – Page

2

planning fund and expanded the scope to allow planning grants for water conservation, long-term

master plans, and economic development plans. Grants from the fund do not require legislative

authorization. In accordance with statute, NMFA issued $1 million in revenue bonds to

capitalize the grant fund, and the Legislature appropriated $1 million to the fund in 2003. As of

June 30, 2007, NMFA has made 39 grants totaling $907 thousand from the fund.

The maximum allowable grant amount per project is $50 thousand. Qualified entities are

required to reimburse the local government planning fund without interest or fees. However, if

the project is financed through the NMFA, the repayment provision is waived.

As provided by NMFA, the following chart demonstrates the type of planning grants

administered to date:

LMK/mt