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

SPONSOR SFL

ORIGINAL DATE

LAST UPDATED

8/18/08

8/19/08 HB

SHORT TITLE Low Income Energy Assistance Programs

SB 21/SFLS/aSFL#1

ANALYST Earnest

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY09

FY10

$1,900.0

Non-recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Senate Floor Substitute for SB21 is related to HB3 and SB7, SB10 and SB11.

SOURCES OF INFORMATION

LFC Files

Responses Received From

Human Services Department (HSD)

SUMMARY

Synopsis of Senate Floor Amendment

Senate Floor Amendment to Senate Floor Substitute for Senate Bill 21 would prevent the Human

Services Department from expending any of the appropriation on an outside contractor.

Synopsis of Bill

Senate Floor Substitute for Senate Bill 21 appropriates $1.9 million from the general fund to the

Human Services Department for the low income home energy assistance program.

The bill declares an emergency.

FISCAL IMPLICATIONS

The appropriation of $1.9 million contained in this bill is a nonrecurring expense to the general

fund. Any unexpended or unencumbered balance remaining at the end of fiscal year 2010 shall

revert to the general fund.

Senate Bill 21/SFLS – Page

2

SIGNIFICANT ISSUES

In FY08, the state paid more than $8.3 million to households through LIHEAP, serving more

than 61,392 households. HSD provided the following table:

Year Served

Point Value Average Benefit

2008 63,662 to date $19

$140

2007 62,269

$19

$127

2006 71,794

$65*

$417

2005 55,685

$20

$128

2004 54,234

$20

$127

2003 50,699

$20

$125

2002 40,601

$30

$191

2001 47,018

$40

$250

* In July of 2006, point value was reduced to $25 due to

funding balances

During the 2008 session, $2 million was appropriated to HSD for the LIHEAP program, of

which no less than 15 percent and no more than 25 percent shall be used on weatherization

programs. The federal base grant for 2008 is about $9.5 million, bringing the total funding in

2008 to about $11.5 million. Of this amount, $1.4 million will be used for weatherization

programs at MFA.

LIHEAP FUNDING

Year Federal Base Grant

(in millions)

State Funds

(in millions)

2008

$9.5

$2.0

2007

$9.4

$6.0

2006

$9.4

$12.0

2005

$8.9

$0.0

2004

$8.5

$0.0

2003

$8.5

$0.0

HSD provided the following information:

LIHEAP is a grant from U.S. Department of Health and Human Services (HHS) that

helps New Mexico low-income families meet the costs of home heating and cooling one

time per year and increase energy self-sufficiency and reduce vulnerability resulting from

energy needs. HSD is the recipient of the federal LIHEAP funds. Up to 15% of the grant

may be used for weatherization, or 25% with an approved waiver. HSD and the

Mortgage Finance Authority enter into an agreement each year to provide funding for

weatherization from the LIHEAP grant.

Appropriating non-recurring funds for a program such as LIHEAP makes it difficult to

Senate Bill 21/SFLS – Page

3

adjust the benefit levels in years where there is no general fund appropriation.

According to the 2006 Fisher, Sheehan & Colton publications, the Home Energy

Affordability Gap for low-income households is $600.00. Although only 62,269 New

Mexico households received LIHEAP in FFY 2007, there are approximately 180,530

households that meet the LIHEAP income eligibility limit of 150% of Poverty (2000

Decennial Census 2/2005). Using the Home Energy Affordability Gap of $600, the total

approximate energy need for 180,530 households is $108,318,000. Receiving this

appropriation in HB 3 would help to reduce the un-met need.

In addition, HSD notes that general fund appropriations for this purpose may be credited toward

the Temporary Assistance for Needy Families (TANF) Maintenance of Effort (MOE) when used

to serve low-income households with dependent children. Over $4 million in Temporary

Assistance for Needy Families (TANF) Maintenance of Effort (MOE) was claimed in FFY 2207

using LIHEAP General Fund monies appropriated during the 2007 Legislative Session.

According to HSD, seven tribes in New Mexico that administer their own LIHEAP programs

could receive $318,446 of this appropriation, based on the federal funding formula. If HSD had

to provide funding to Tribes/Pueblos, it would require Joint Powers Agreements with several

Tribes and Pueblos, including Five Sandoval, Navajo Nation, Zuni, Jemez, Laguna, Nambe and

Jicarilla.

ADMINISTRATIVE IMPLICATIONS

Senate Floor Substitute for Senate Bill 21 does not include administrative funds for HSD. HSD

uses federal funds to administer the federal LIHEAP program. HSD will have to re-program the

IT system to change the point value and add separate state funds to supplement the federal

LIHEAP benefit. However, no additional administrative dollars are needed to do this. No

additional staff is needed to administer the $1.9 million appropriated by this bill because the

number served by the additional appropriation would not increase significantly.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Senate Floor Substitute for Senate Bill 21 is related to House Bill 3 and Senate Bills 7, 10 and

11.

BE/mt