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

SPONSOR HFL

ORIGINAL DATE

LAST UPDATED

01/25/07

03/17/07 HB

CS/219/aHHGAC

/aSFl#1/aCC

SHORT TITLE Adoption of Municipality Codes By Reference

SB

ANALYST Woods

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY07

FY08

FY09 3 Year

Total Cost

Recurring

or Non-Rec

Fund

Affected

Total

$.1 see

narrative

Recurring Various

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Construction Industries Division (CID)

SUMMARY

Synopsis of Conference Committee Recommendation

The Conference Committee recommendation to House Floor Substitute for House Bill 219 (as

amended) reflects the following:

1. Senate Floor Amendment 1 be disapproved; and that the bill be amended further

as follows:

2. On page 3, line 2, strike "2008" and insert in lieu thereof "2009".

Synopsis of SF#1 Amendment

The Senate Floor Amendment #1 strikes the HHGAC Amendment #5 and extends the effective

date of the provisions of the act until July 1, 2009.

Synopsis of HHGAC Amendment

The House Health and Government Affairs Committee Amendment removes specific reference

to electrical, housing and plumbing codes because those codes are already reflected within the

building code provisions on pg 1 A, (3). The Amendment clarifies any building code provisions

adopted to include plan review, permitting and inspections for general, electrical, mechanical and

plumbing construction. The Amendment removes pg 2, lines 13 through 16, as intent of the

CS/House Bill 219/aHHGAC/aSFl#1/aCC– Page

2

language already exists on pg 2, within lines 11 and 12. The Amendment also adds an effective

date of July 1, 2008.

Synopsis of Original Bill

The House Floor Substitute for House Bill 219 amends Section 3-17-6 (A) NMSA 1978 and

requires municipalities that choose to adopt a building code, be required to adopt a building code

that includes provisions for plan review, permitting and inspections for general, electrical,

mechanical and plumbing construction, not just general construction.

FISCAL IMPLICATIONS

Local building programs within municipalities are receiving fees from the issuance of building

permits which fund inspections. Many of these programs only have one inspector because the

program covers only one building discipline. If these programs do not have an inspector in place

due to normal attrition in the work force, then the state is statutorily obligated to assume the

responsibility for inspections. The permit fees have already been remitted to the local programs,

so the state does not receive revenue to inspect work in progress. More stable, full-service local

programs which employ multiple inspectors with adequate funding and management do not have

this problem. It can be months before a new inspector is hired, but in the intervening time, the

local building program continues to issue permits for new projects. The state’s CID believes this

unexpected demand on state resources adversely impacts the budget, staffing, and management

of state inspections operations.

SIGNIFICANT ISSUES

The state’s CID reports HB 219 was developed to improve building code compliance processes

statewide. The intent of the bill is to curtail wasteful and inefficient practices caused when local

governments administer part, but not all, of the permitting, plan checking, and inspection of local

construction projects. There are currently 33 local government building departments. Of those

33, only 13 have “full service" building departments (general construction, electrical, mechanical

and plumbing". The remaining 20 have primarily assumed responsibility for general construction

work only.

PERFORMANCE IMPLICATIONS

Currently the CID is obligated to assume responsibility for all code compliance processes not

assumed by local governments. For example, local governments often take the general building

part of the process, which is more lucrative and relatively easy, leaving the more difficult

plumbing, mechanical, and electrical part of the processes to the state’s CID. In areas where this

happens a new home may have foundation, framing, and insulation inspections done by a local

inspector, and then the plumbing, and/or mechanical and/or electrical inspections done by a state

inspector who may have more than one county to cover.

ADMINISTRATIVE IMPLICATIONS

This change in the law will be coupled with an effort by the CID to help neighboring local

governments combine forces to have a local full complement of building code compliance

services, including plan check and field inspections. The CID will also be facilitating the use of

“combination inspectors" at the local level so that one person can inspect more than one trade.

CS/House Bill 219/aHHGAC/aSFl#1/aCC– Page

3

This is being done in some areas now and greatly increases the efficiency of local code

compliance inspections.

OTHER SUBSTANTIVE ISSUES

New Mexico is experiencing a building boom, including millions spent on school construction

and local economic development successes. In order to get all this work done and have timely

and appropriate building code compliance processes, the state’s CID believes we must change

our present systems to achieve greater efficiencies.

AHO/mt