Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR Stewart
LAST UPDATED
ORIGINAL DATE 1/30/25
SHORT TITLE Community Benefit Fund
BILL
NUMBER Senate Bill 48
ANALYST Hilla
APPROPRIATION*
(dollars in thousands)
FY25 FY26
Recurring or
Nonrecurring
Fund
Affected $340,000.0 Recurring General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 FY26 FY27
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected
No fiscal impact $100.0 $100.0 $200.0 Recurring General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Relates to Senate Bill 49, Senate Bill 4, and Senate Bill 83.
Sources of Information
LFC Files
Agency Analysis Received From
General Services Department (GSD) Public Regulation Commission (PRC) Workforce Solutions Department (WSD) New Mexico Environment Department (NMED) State Treasurer Office (STO) Energy, Minerals, and Natural Resources Department (EMNRD)
Economic Development Department (EDD)
Agency Analysis was Solicited but Not Received From
Department of Finance and Administration (DFA)
New Mexico Department of Transportation (NMDOT)
Governor’s Office on Housing
Agency Declined to Provide Analysis
Department of Health (DOH) Senate Bill 48 – Page 2
SUMMARY
Synopsis of Senate Bill 48
Senate Bill 48 (SB48) appropriates $340 million from the general fund to the community benefit
fund to be administered by the Department of Finance and Administration (DFA) in
collaboration with the Energy, Minerals and Natural Resources Department (EMNRD). The
community benefit fund is for projects that would:
Reduce greenhouse gas related to the construction or the renovation of a public
building as long as the project exceeds the most recent international conservation
code;
Reduce methane leaks and releases attributable to extractive industries, with projects
to achieve emissions that are in addition to those that would be achieved according to
any existing greenhouse regulatory requirements in state or federal law;
Increase electric grid capacity;
Increase electricity from renewable energy resources and efficiency of electricity
from energy efficiency projects;
Reduce the use of combustion engine vehicles through transportation projects,
including projects that increase electric vehicle infrastructure or bicycle and
pedestrian infrastructure;
Assess or reduce the effects of climate change on the natural environment,
agricultural production, land and natural resources, and human health;
Assist public entities in the purchase of electric vehicles and related charging
infrastructure to reduce the use of combustion engine vehicles;
Establish or expand economic development needed to address the economic
implications of climate change;
Develop economic opportunities to optimize resources to lower consumption and
promote the reuse and recycling of materials sustainably;
Transition the state away from dependence on the fossil fuel industry as a revenue
resource;
Establish or expand worker training activities in achieving these objectives.
A project that proposes to meet the bill's requirements shall provide documentation that two
meetings regarding the project were held within the community affected by the proposed project
to address concerns and that the meetings were provided to overburdened communities. The
project must have a negotiated agreement with the overburdened community along with a plan
for outreach to community members to engage them in worker training programs or in economic
development opportunities.
The Department of Finance and Administration and Energy, Minerals and Natural Resources
Department shall develop or identify an existing federal government data tool that uses spatial
datasets to identify overburdened communities, which are communities experiencing
disproportionate burdens in climate change, energy, health, housing, legacy pollution,
transportation, water and wastewater, and workforce development.
On or December 1 of each year that a project receives an appropriation from the community
benefit fund, DFA must submit a report to the appropriate interim legislative committees with
the progress or, if appropriate, final results of the project and any other information the Senate Bill 48 – Page 3
committees require to evaluate the project.
This bill does not contain an effective date and, as a result, would go into effect 90 days after the
Legislature adjourns if enacted, or June 20, 2025.
FISCAL IMPLICATIONS
The appropriation of $340 million contained in this bill is a recurring expense to the general
fund. Any unexpended or unencumbered balance remaining shall not revert. Although SB48
does not specify future appropriations, establishing a new grant program could create an
expectation the program will continue in future fiscal years; therefore, this cost is assumed to be
recurring.
While the language in SB48 references a transfer from the general fund, the transfer is, in fact, an
expense to the general fund, like other appropriations. A transfer is distinguished from an
appropriation in bill language only when the dollars taken are sent to another fund rather than
expended. For the tables on page 1, the transfer is similarly scored as an appropriation because
both are expenses to the general fund and must be scored as such for maintaining the general
fund balance sheet.
Based on the introduced version of the General Appropriation Act and the Legislative Finance
Committee and executive budget recommendations, there will be insufficient funds in the
general fund in FY25 to provide for this appropriation. This appropriation will likely over-
encumber the general fund appropriation account and create an irreconcilable deficit under
current law. It is unclear if the full amount will be transferred due to the lack of sufficient funds
and current statutory requirements for the availability of funds before distribution. To preserve
the state’s constitutional mandate to maintain a balanced budget, a new source of funds will need
to be identified for the trust.
However, there is a contingent appropriation in the General Appropriation Act for a $350 million
general fund transfer to the community benefit fund contingent on the passage of SB48 for a
transfer in FY26. Should the appropriation tied to SB48 be stripped before passage, the concerns
of over-encumbering the general fund appropriation account will no longer apply.
Additionally, the fiscal analysis assumes that various agencies, such as the Economic
Development Department (EDD), may require additional staff, a recurring cost. The analysis
assumes that agencies that do not already have existing processes related to SB48, like EDD,
would require one additional FTE at a cost of $100 thousand.
It is unclear if any appropriation made from the community benefit fund could be used for
administrative expenses. Should SB48 cover administrative expenses, there would be no need for
agencies to increase their recurring budget.
Proposed methane emission reductions created by companion bill Senate Bill 4 (SB4) have the
potential to impact the state’s revenue from the severance tax revenue utilized by multiple areas
of the state. However, SB48’s initiatives for greenhouse gas reductions do not appear to have the
same or any impact on the state’s severance revenue.
Senate Bill 48 – Page 4
SIGNIFICANT ISSUES
New Mexico currently has Climate Change Task Force, whose chairs are representatives of
EMNRD and the Environment Department (NMED). Other agencies in the task force are the
Department of Transportation (NMDOT), EDD, the State Land Office (SLO), and the Workforce
Solutions Department (WSD). The task force was created by executive order in 2019, with the
executive order including greenhouse and oil production emissions targets and directives that
mimic or closely resemble the targets and directives of SB48.
EMNRD, which administrates the grid modernization initiative from the U.S. Department of
Energy, states the demand for grid modernization program funding has exceeded the available
federal funds, with state funds not yet allocated for grid modernization. The department has
received $1.5 million in federal awards for training residential energy contractors and has applied
for two more federal grants worth $4 million in total to further train industry workers for energy
initiatives. EMNRD states, should the bill pass, grid modernization and workforce training
initiatives can be administered by the agency’s existing processes.
NMED recommends that criteria for awarding funding for projects include the magnitude of
greenhouse gas emission reductions, e.g., the dollars per ton of carbon dioxide.
The General Services Department (GSD) says SB48 provides a potential funding pathway to
reduce greenhouse gas emissions through the construction or renovation of public buildings to
meet requirements of the most current international energy conservation code and projects that
increase electric vehicle infrastructure.
Without specific measurable performance benchmarks, there is the potential for ineffective
allocation of funds when distributed to agencies to then distribute to the local level. This is also
applicable when considering more structured, desired outcomes for workforce training beyond
general statements for workforce or economic development in the bill.
PERFORMANCE IMPLICATIONS
WSD states that Executive Order 2024-152 requires state agencies to collaborate on developing
the workforce for “climate-ready” professions by the end of 2026. The department states that
climate-related workforce training is part of its 2024-2027 Workforce Innovation and
Opportunity Act (WIOA) plan. The LFC program evaluation, Workforce Development Post
Covid-19 Pandemic and Improving New Mexico's Workforce Participation, highlights the
fragmentation and duplication of services that persist under WIOA and raise concerns about the
implementation of workforce programs under WIOA, which climate-related training falls under.
A more recent LFC evaluation recommends WSD revise its operating model to incorporate the
evidence-based practices of providing education, training, and support services for all recipients,
which would need to translate to the department's climate-related workforce training outlined in
SB48.
ADMINISTRATIVE IMPLICATIONS
EMNRD states it will provide venting and flaring statistics to assist in identifying and tracking Senate Bill 48 – Page 5
greenhouse gas emissions.
By itself, the creation of a new fund in the state treasury does not have a direct fiscal impact on
the State Treasurer’s Office (STO). However, in the aggregate, the creation of many new funds
within the state treasury does increase the workload of STO staff.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
Senate Bill 49, which makes distribution to state agencies from the $340 million appropriation in
SB48, is contingent on the passage of this bill.
SB48 is related to SB4, which makes an appropriation of $3 million to NMED for greenhouse
gas emission reductions. LFC analysis highlights SB4, in addition to SB48, has the potential to
impact the state’s revenue via severance tax.
SB48 is similar to Senate Bill 83 (SB83), which creates the innovation in state government fund
with $10 million from the general fund. SB83 is intended to fund agencies to create master plans
and increase capacity to achieve net-zero emissions, implement sustainable economic policies,
provide technical support to entities applying for funding that seek to address climate change, or
reduce barriers to implementing climate change policy.
As noted in the fiscal impacts, there is a contingent appropriation in the LFC-recommended
version of the General Appropriation Act for a $350 million general fund transfer to the
community benefit fund at DFA.
TECHNICAL ISSUES
The terms “overburdened communities,” “appropriate scale” for biomass projects, “scientifically
determined restoration,” and “sustainable manner” may require more precise definitions. The bill
prioritizes funding for overburdened communities without having specific definitions, rather it
leaves this up to DFA and EMNRD to use a tool used by the federal government to identify
overburdened communities.
NMED states the definitions of greenhouse gas in SB4 and SB48 should be the same.
OTHER SUBSTANT IVE ISSUES
Potential issues from SB48 arise from Section 1. (B) to require emission reductions that are in
addition to those that would already be achieved pursuant to any existing regulatory
requirements in state or federal law. This could create the argument that SB48 is preempted by
federal law if certain methane reduction projects are already in compliance with federal methane
regulations, which could conflict with the Supremacy Clause established in Article VI, Clause 2,
of the U.S. Constitution.
EH/sgs/hg/sgs