BILL ANALYSIS AND FISCAL IMPACT REPORT	Page 1 of  1

DATE:  March 5, 2001	Submitted by: TAXATION AND REVENUE DEPT.
	T. GLENN ELLINGTON, SECRETARY
BILL NUMBER: SRC Substitute for SB - 855

SPONSOR:  Senate Rules Committee

BILL SHORT TITLE: Amending the Municipal Code Pertaining to Municipal Sanitary Sewer and Water Utilities.

DESCRIPTION: This bill is apparently trying to speed up a gross receipts tax revenue bond project for some municipality in the state. It does this through three devices – two effective and one having exactly the opposite effect of speeding up the process. The first provision is that a water or sewer project financed with gross receipts tax revenue bonds need not be approved by the voters. The second provision is an emergency clause, such that if the bill passes both houses with a supermajority, it would become effective when signed by the Governor. The third provision is apparently an attempt to avoid scrutiny by the Public Regulation Commission of the acquisition  or construction of a water or sewer utility, when financed by gross receipts tax revenue bonds. However, this third provision has exactly the opposite effect of that intended. By amending in the phrase “is not applicable to” a subsection that grants exception to the general rule that PRC must approve price and terms of acquisition or construction, the grammatical and logical conclusion is that the PRC must approve any proposed project.

EFFECTIVE DATE: emergency clause – effective on signing.

FISCAL IMPACT: the Department is not privy to information on which of the 102 municipalities wants to “fast track” the acquisition of a sewer or water system. Neither is the Department privy to information on how much gross receipts tax will be pledged to such acquisition.

ADMINISTRATIVE IMPACT: none.

TECHNICAL ISSUES:
1.	Section 3 of this bill which amends 3-23-3 NMSA 1978 may be defective. Rather than creating an exemption from Public Regulation Commission approval of the price and terms of revenue bond-financed acquisition of a municipal sewer and water system, the bill limits an existing exception to PRC approval.

2.	Article IV, Section 15 of the New Mexico Constitution provides, “No law shall be passed except by bill, and no bill shall be so altered or amended on its passage through either house as to change its original purpose.” There is little case law on this point. In particular there has been no litigation on the use or  propriety of using dummy bills to enact substantive legislation. This bill was originally filed as a “dummy bill”, with no substantive content, and a title that reads, “for the public peace, health, safety and welfare”. The substitute bill is substantive and necessarily goes far beyond “broadening the act and making it more comprehensive as to details” because the original bill had no content. This standard was determined in Black Hawk Consolidated Mines Co. V. Gallegos, 52 NM 74, 191 P.2d 996 (1948). The constitutionality of the entire act is thus suspect, no matter how well intentioned. This proposal may be controversial because (1) it denies the voters in the jurisdiction the right to approve a bond purchase of a water and sewer system and (2) (if fixed technically) it denies PRC the right to review the price and terms of the acquisition. Thus, two quite disparate entities are disenfranchised by this proposal. The initial and compelling challenge to this proposal will be because it disenfranchises affected parties and then, because of the dummy bill issue.

OTHER IMPACTS AND ISSUES:
1.	It is difficult to understand why it is necessary to take both the voters and the PRC out of an approval process that creates a municipal asset or the haste with which the concept must be approved.