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F I S C A L I M P A C T R E P O R T
SPONSOR SFL
ORIGINAL DATE
LAST UPDATED
8/18/08
8/19/08 HB
SHORT TITLE Low Income Energy Assistance Programs
SB 21/SFLS/aSFL#1
ANALYST Earnest
APPROPRIATION (dollars in thousands)
Appropriation
Recurring
or Non-Rec
Fund
Affected
FY09
FY10
$1,900.0
Non-recurring
General Fund
(Parenthesis ( ) Indicate Expenditure Decreases)
Senate Floor Substitute for SB21 is related to HB3 and SB7, SB10 and SB11.
SOURCES OF INFORMATION
LFC Files
Responses Received From
Human Services Department (HSD)
SUMMARY
Synopsis of Senate Floor Amendment
Senate Floor Amendment to Senate Floor Substitute for Senate Bill 21 would prevent the Human
Services Department from expending any of the appropriation on an outside contractor.
Synopsis of Bill
Senate Floor Substitute for Senate Bill 21 appropriates $1.9 million from the general fund to the
Human Services Department for the low income home energy assistance program.
The bill declares an emergency.
FISCAL IMPLICATIONS
The appropriation of $1.9 million contained in this bill is a nonrecurring expense to the general
fund. Any unexpended or unencumbered balance remaining at the end of fiscal year 2010 shall
revert to the general fund.
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Senate Bill 21/SFLS – Page
2
SIGNIFICANT ISSUES
In FY08, the state paid more than $8.3 million to households through LIHEAP, serving more
than 61,392 households. HSD provided the following table:
Year Served
Point Value Average Benefit
2008 63,662 to date $19
$140
2007 62,269
$19
$127
2006 71,794
$65*
$417
2005 55,685
$20
$128
2004 54,234
$20
$127
2003 50,699
$20
$125
2002 40,601
$30
$191
2001 47,018
$40
$250
* In July of 2006, point value was reduced to $25 due to
funding balances
During the 2008 session, $2 million was appropriated to HSD for the LIHEAP program, of
which no less than 15 percent and no more than 25 percent shall be used on weatherization
programs. The federal base grant for 2008 is about $9.5 million, bringing the total funding in
2008 to about $11.5 million. Of this amount, $1.4 million will be used for weatherization
programs at MFA.
LIHEAP FUNDING
Year Federal Base Grant
(in millions)
State Funds
(in millions)
2008
$9.5
$2.0
2007
$9.4
$6.0
2006
$9.4
$12.0
2005
$8.9
$0.0
2004
$8.5
$0.0
2003
$8.5
$0.0
HSD provided the following information:
LIHEAP is a grant from U.S. Department of Health and Human Services (HHS) that
helps New Mexico low-income families meet the costs of home heating and cooling one
time per year and increase energy self-sufficiency and reduce vulnerability resulting from
energy needs. HSD is the recipient of the federal LIHEAP funds. Up to 15% of the grant
may be used for weatherization, or 25% with an approved waiver. HSD and the
Mortgage Finance Authority enter into an agreement each year to provide funding for
weatherization from the LIHEAP grant.
Appropriating non-recurring funds for a program such as LIHEAP makes it difficult to
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Senate Bill 21/SFLS – Page
3
adjust the benefit levels in years where there is no general fund appropriation.
According to the 2006 Fisher, Sheehan & Colton publications, the Home Energy
Affordability Gap for low-income households is $600.00. Although only 62,269 New
Mexico households received LIHEAP in FFY 2007, there are approximately 180,530
households that meet the LIHEAP income eligibility limit of 150% of Poverty (2000
Decennial Census 2/2005). Using the Home Energy Affordability Gap of $600, the total
approximate energy need for 180,530 households is $108,318,000. Receiving this
appropriation in HB 3 would help to reduce the un-met need.
In addition, HSD notes that general fund appropriations for this purpose may be credited toward
the Temporary Assistance for Needy Families (TANF) Maintenance of Effort (MOE) when used
to serve low-income households with dependent children. Over $4 million in Temporary
Assistance for Needy Families (TANF) Maintenance of Effort (MOE) was claimed in FFY 2207
using LIHEAP General Fund monies appropriated during the 2007 Legislative Session.
According to HSD, seven tribes in New Mexico that administer their own LIHEAP programs
could receive $318,446 of this appropriation, based on the federal funding formula. If HSD had
to provide funding to Tribes/Pueblos, it would require Joint Powers Agreements with several
Tribes and Pueblos, including Five Sandoval, Navajo Nation, Zuni, Jemez, Laguna, Nambe and
Jicarilla.
ADMINISTRATIVE IMPLICATIONS
Senate Floor Substitute for Senate Bill 21 does not include administrative funds for HSD. HSD
uses federal funds to administer the federal LIHEAP program. HSD will have to re-program the
IT system to change the point value and add separate state funds to supplement the federal
LIHEAP benefit. However, no additional administrative dollars are needed to do this. No
additional staff is needed to administer the $1.9 million appropriated by this bill because the
number served by the additional appropriation would not increase significantly.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
Senate Floor Substitute for Senate Bill 21 is related to House Bill 3 and Senate Bills 7, 10 and
11.
BE/mt