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

SPONSOR Sandoval

DATE TYPED 2/17/05

HB 304/aHAGC/aHTRC

SHORT TITLE Water & Wastewater Grant Eligibility

SB

ANALYST Kehoe

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

NFI

N/A

(See Fiscal Im-

pact Narrative)

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

FOR THE NEW MEXICO FINANCE AUTHORTIY OVERSIGHT COMMITTEE

Responses Received From

New Mexico Finance Authority (NMFA)

New Mexico Environment Department (NMED)

SUMMARY

Synopsis of HTRC Amendment

The House Taxation and Revenue Committee amendment expands the purposes of the proposed

local government planning fund to include economic development plans.

Synopsis of HAGC Amendment

The House Agriculture and Water Resources Committee amendment changes the name of the

“Water and Wastewater Planning Fund” to the “Local Government Planning Fund”.

Synopsis of Bill

House Bill 304 expands eligibility requirements for water and wastewater planning fund grants

and provides requirements for grant repayments.

House Bill 304/aHAGC/aHtrc -- Page 2

Significant Issues

The 2002 Legislature created the water and wastewater planning fund within NMFA for the pur-

pose of making grants to qualified entities to evaluate and to estimate the costs of implementing

the most feasible alternatives for meeting water and wastewater public projects needs and to pay

administrative costs of the water and wastewater planning program. NMFA is currently author-

ized to issue revenue bonds payable from the public project revolving fund in an amount not to

exceed $1 million for the purpose of providing grants for studies and analyses. NMFA may

make grants from the water and wastewater planning fund to qualified entities without specific

authorization by law for each grant.

House Bill 304 expands the purpose of grants from the water and wastewater planning program

to include development of water conservation plans and long-term master plans. Grants from the

fund may be made only with the agreement of the qualified entity to reimburse the fund for the

amount of the grant when financing from any source is subsequently received by the qualified

entity for the water or wastewater public project. Repayments to the fund are made without in-

terest or fee.

The bill contains an emergency clause.

FISCAL IMPLICATIONS

Funding may be available for grants through NMFA’s issuance of bonds in an amount not to ex-

ceed $1 million payable from an amount of governmental gross receipts tax (GGRT) not to ex-

ceed 35 percent of the GGRT deposited in the public project revolving fund, which net proceeds

of the bonds shall be deposited in the water and wastewater planning fund and used for purposes

of the fund.

OTHER SUBSTANTIVE ISSUES

According to NMFA, the following graph depicts the closed and pending planning fund projects

since creation of the fund:

LMK/yr

Attachment

House Bill 304/aHAGC/aHtrc -- Page 3

Closed and Pending Projects since 2002

$183,300 , 16%

$635,840 , 54%

$95,000 , 8%

$252,500 , 22%

Feas ibility Report

PER

Wastew ater Master Plan

Water Master Plan