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.



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





SPONSOR: Taylor, J.G. DATE TYPED: 02/09/00 HB 139/aHTRC
SHORT TITLE: Drinking Water System Financing SB
ANALYST: Kehoe


APPROPRIATION



Appropriation Contained
Estimated Additional Impact
 Recurring

or Non-Rec

 Fund

Affected

FY00 FY01 FY00 FY01
$ 1,540.0 Recurring PPRF

(Parenthesis ( ) Indicate Expenditure Decreases)



Duplicates/Conflicts with/Companion to/Relates to



SOURCES OF INFORMATION



New Mexico Finance Authority (NMFA)

LFC Files



SUMMARY



Synopsis of HTRC Amendment



House Taxation and Revenue Committee amendments to House Bill 139 amends the bill to include the statutory citation of the Drinking Water State Revolving Loan Fund Act; and changes the appropriation to come from the public project revolving fund instead of the general fund.



Synopsis of Original Bill



House Bill 139 appropriates $1,540.0 from the general fund to the Drinking Water State Revolving Loan Fund to carry out the purposes of the Drinking Water State Revolving Loan Fund Act.



Significant Issues



The New Mexico Drinking Water State Revolving Loan Fund Act was enacted by the 1997 Legislature in response to the reauthorization of the federal Safe Drinking Water Act (SDWA). The re-authorization requires the Environmental Protection Agency (EPA) to make capitalization grants to states over the next six years to further the health objectives of SDWA. The NMFA, in cooperation with the Environment Department, established a loan program from the fund to provide local authorities with low-cost financial assistance in the construction of necessary drinking water facilities.



The appropriation in House Bill 139 would provide the 20% state match for a future Safe Drinking Water Act grant from EPA. The appropriation will match a federal grant of approximately $7.7 million.



FISCAL IMPLICATIONS



The bill appropriates $1,540.0 from the general fund. Any unexpended or unencumbered balances remaining at the end of a fiscal year shall not revert to the general fund. If matching funds continue to be required, the appropriation will be recurring.



ADMINISTRATIVE IMPLICATIONS



The Environment Department is responsible for assessing and certifying projects for program eligibility and the NMFA will have oversight in determining criteria and approval for the loan process.



OTHER SUBSTANTIVE ISSUES



As of the end of calendar 1999, the NMFA has made five loans totaling $2.2 million since December 1998, and expects to make another eight loans for nearly $7.8 million from the Drinking Water Revolving Loan Fund during FY2000. In addition to the DWSRLF has a lending capacity of $1.4 million. The NMFA received and deposited into the DWSRLF a $13 million capitalization grant from the EPA for the second and third years of the program at the end of 1999.



POSSIBLE QUESTIONS