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

SPONSOR Harden

ORIGINAL DATE

LAST UPDATED

2-14-07

2-28-07 HB

SHORT TITLE Solid Waste Transportation Grant Fund

SB 978/aSCORC

ANALYST Aubel

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

$5,000.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

FY09

$5,000.0

Recurring

Solid Waste

Transportation

Grant fund

(Parenthesis ( ) Indicate Revenue Decreases)

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY07

FY08 FY09 3 Year

Total Cost

Recurring

or Non-Rec

Fund

Affected

Total See Narrative

$65.0 $65.0

$130.0 Recurring General

Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates HB 1002, Relates to HB 440

SOURCES OF INFORMATION

LFC Files

Responses Received From

New Mexico Environment Department (NMED)

Energy, Minerals & Natural Resources Department (EMNRD)

Senate Bill 978/aSCORC – Page

2

New Mexico Municipal League (NMML)

State Land Office (SLO)

SUMMARY

Synopsis of SCORC Amendment

The Senate Corporations and Transportation Committee Amendment strikes “a landfill disposal"

facility and inserts “the nearest permitted solid waste" facility. This amendment clarifies the

intent for disposal of solid waste properly in a permitted facility.

Synopsis of Original Bill

Senate Bill 978 appropriates $5.0 million from the general fund to the New Mexico Environment

Department to establish the solid waste transportation fund consisting of appropriations, gifts,

grants, donations and bequests made to the fund, and income from the fund. The fund will be

used to make grants for reimbursing or partially reimbursing solid waste transportation costs

incurred by municipalities and counties that transport solid waste 15 miles or more from the

boundary of the municipality or county to a landfill disposal facility. The reimbursement amount

would be per ton of solid waste transported per mile, as established by rule of the Environmental

Improvement Board.

FISCAL IMPLICATIONS

The appropriation of $5.0 million contained in this bill is a recurring expense to the general fund.

Any unexpended or unencumbered balance remaining at the end of fiscal year 2007 shall not

revert to the general fund.

NMED indicates that this new program will require administrative support for its development,

implementation, and ongoing management. If additional staff is required, an estimated annual

cost of $65 thousand might be anticipated for FY08 and beyond. Current staffing is assumed

sufficient for FY07.

Continuing Appropriations

This bill creates a new fund and provides for continuing appropriations. The LFC has concerns

with including continuing appropriation language in the statutory provisions for newly created

funds, as earmarking reduces the ability of the legislature to establish spending priorities.

SIGNIFICANT ISSUES

According to NMED and NMML, costs to local communities of hauling solid waste have

increased substantially due to increased fuel costs. In addition, some municipalities have the

responsibility of closing old unlined landfills that are leaking contaminants into the groundwater.

New state-of-the-art lined landfills are expensive and, as a result, some communities must haul

solid waste long distances for proper disposal. According to NMML, some municipalities are

required to make roundtrips to landfills that exceed 100 miles.

DFA has indicated that such legislation assumes municipalities operate in a fuel-efficient manner

Senate Bill 978/aSCORC – Page

3

in hauling solid waste. It doesn't address logistical and collection programs like transfer stations

to reduce fuel costs. The bill may be viewed as a statewide-taxpayer subsidy to municipalities

operating solid waste facilities. Local residents typically bear the cost of solid waste collection

and disposal services.

ADMINISTRATIVE IMPLICATIONS

The responsibility for developing rules, application, and evaluation criteria could fall to existing

NMED staff. Staff would be needed to review applications, validate all submissions, administer

grants, and ascertain grantees’ compliance with all appropriate conditions, terms and

requirements. The bill allocates no additional FTEs to fulfill its mandates.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

SB 978 duplicates HB 1002. HB 440 adds $5 million to the solid waste facility fund to provide

grants to local communities for the capital costs of closing old landfills, transfer stations and

convenience centers, constructing new landfills and purchasing equipment, which complements

SB 978 by facilitating the construction of new landfills closer to local communities and by

reducing the distance that solid waste must be hauled.

TECHNICAL ISSUES

Between lines 23 through 25 on page 2, DFA has recommended deleting "Any …..revert." The

statutory creation of the fund on page 1 (lines 22 through 23) already states it is non-reverting

and not transferable to any other fund.

OTHER SUBSTANTIVE ISSUES

EMNRD notes that SB 978 does not include a provision to encourage the use of alternative fuels,

the purchase of fuel-efficient vehicles or the conservation of fuel. Nor does it encourage

programs to reduce solid waste, such as recycling.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

Municipalities and counties will continue to bear the total cost of transporting solid waste to

regional landfills, which will in turn most likely cause some communities to raise the fees that

are charged to residents for solid waste management. Increased illegal dumping may result

because some people may not be able to afford the higher fees.

MA/mt