NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC files

SUMMARY

Synopsis of Bill

HB 205 requires the Department of Public safety (DPS) to include in its annual budget appropriation request the amount paid by motor carriers (i.e., the trucking industry) for hazardous materials transportation permits in New Mexico during the prior fiscal year. That money is then used by DPS for expenditure on hazardous materials emergency response training and equipment. HB 205 provides an appropriation of $1.3 million to the DPS Technical and Emergency Support Division for expenditure on hazardous materials and training equipment during fiscal years 1999-2001. Any unexpended or unencumbered balance of the $1.3 million remaining at the end of fiscal year 2001 reverts to the general fund.

Significant Issues

According to the Energy, Minerals, and Natural Resources Department (EMNRD), passage and enactment of HB 205 is warranted to correct an existing problem regarding the State's Hazardous Materials Transportation Permit program. This program, administered by the Motor Vehicle Division (MVD) of the New Mexico Taxation and Revenue Department pursuant to the New Mexico Hazardous Materials Transportation Act [Section 74-4F-1 et seq.], imposes permit fees collected from such transporters be deposited in the general fund. Hence, there is no assurance that the fees collected by MVD will be allocated for the purpose for which they are imposed (i.e., to prepare for and mitigate a hazardous materials accident).

Also, EMNRD reports in recent discussions with staff from the National Conference of State Legislatures, it was discovered that the American Trucking Association has initiated and won several lawsuits that challenged the transportation permit programs similar to that administered here in New Mexico. The basis of those successful challenges: the fees imposed on the trucking industry were not being used to mitigate the potential impacts of such transportation. For this reason, the new Mexico Motor Carriers Association has called for and supports corrective action such as that provided in HB 205. Moreover, the legislative appropriation and other provisions included in the bill will assist greatly in enhancing the emergency response capability of the State and local governments of New Mexico. This is a particularly important consideration given the fact that hazardous material shipments throughout the state continue to increase.

FISCAL IMPLICATIONS

HB 205 would decrease the general fund by $1.3 million.

ADMINISTRATIVE IMPLICATIONS

There would be an administrative impact on DPS in terms of personnel and associated costs to administer the funds allocated for hazardous materials training and equipment.

TECHNICAL ISSUES

EMNRD reports Section 1 of the bill directs DPS to include in its annual budget appropriation an amount of money equal to that paid by motor carriers for hazardous materials transportation permits in the prior fiscal year. However, the legislation does not specify when DPS is to commence doing so. It is recommended the bill provide an explicit directive (e.g., "Beginning with fiscal year 2001 budget appropriations request.")

Sections 1 and 2 include the term "hazardous materials", but does not define it. It is recommended the bill reference the definition in the New Mexico Management Act [Sections 74-4B-1 et. Seq. NMSA 1978].

Section 2 of the legislation provides a $1.3 million appropriation "...for expenditure in fiscal years 1999 through 2001." However, because the bill does not include an emergency clause, the appropriated funds cannot be spent until fiscal year 2000 beginning July 1, 1999. If the legislative intent is to provide DPS three years to spend the appropriation, the wording should be changed to "...for expenditure in fiscal years 2000 through 2002."

OTHER SUBSTANTIVE ISSUES

EMNRD reports one alternative is for the legislature to establish a separate "Emergency Response Fund" with the proposed appropriation. The fund could still be administered by DPS for the same purpose (i.e., the provision of hazardous materials training equipment). The funds could then be replenished annually by mandatory appropriations in an amount equal to the money paid by motor carriers for hazardous materials transportation permits in the prior fiscal year. This alternative may better ensure that funding commensurate with those fees paid by hazardous materials transporters is appropriated each year for hazardous materials training and response.

LAT/gm