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 Share
r
LAST UPDATED
ORIGINAL DATE 1/31/25
SHORT TITLE Storm Water Service as Municipal Utility
BILL
NUMBER Senate Bill 7
ANALYST Graeser
REVENUE*
(dollars in thousands)
Type FY25 FY26 FY27 FY28 FY29
Recurring or
Nonrecurring
Fund
Affected
Storm
Water
System
Fee
Indeterminate – depends on number and scope of storm or flood control
structure and operations
Recurring
Municipal
Utility Funds
Parentheses ( ) indicate revenue 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 Adopting
Municipalities
Indeterminate – depends on number and scope of storm or
flood control structure and operations
Recurring
Municipal Utility
Funds
Relates to Senate Bill 21 and Senate Bill 22
Sources of Information
LFC Files
Agency Analysis Received From
Department of Finance and Administration (DFA).
New Mexico Environment Department (NMED)
New Mexico Municipal League (NMML)
Agency Analysis was Solicited but Not Received From
New Mexico Counties (NMC)
SUMMARY
Synopsis of Senate Bill 7
Senate Bill 7 (SB7) expands the scope of the Municipal Code to allow municipalities to develop
and operate a storm water system, which can include collection, treatment, storage, or disposal of
storm water and to charge just and reasonable fees to property owners benefitting from that
system. This puts the storm water system equivalent to other municipal utilities, such as sewer Senate Bill 7 – Page 2
facilities, water facilities, gas facilities, electric facilities, or generating facilities. The
municipality may require a reasonable deposit to cover the new storm water system’s-imposed
fees. A storm water municipal utility may be imposed by ordinance.
This bill does not contain an effective date and, as a result, would go into effect 90 days after the
Legislature adjourns, or June 20, 2025, if enacted.
FISCAL IMPLICATIONS
The Department of Finance’s (DFA) Local Government Division and the New Mexico
Municipal League (NMML) point out that municipalities that adopt the permission implicit in
this bill will have to increase budgets, including capital budgets. NMML cannot estimate how
many, if any, municipalities will adopt this fee-based solution to the problems of dealing with
storm waters.
NMML points out the City of Santa Fe imposes a $5.50 per month storm water charge collected
with the monthly charge for water, sewer, and trash collection. NMML points out Santa Fe is a
home rule municipality, and the storm water fee is imposed pursuant to that home rule charter.
NMML also points out municipalities that set up stormwater utilities may also be eligible for
additional state or federal funding through grant or loan programs for stormwater management.
SIGNIFICANT ISSUES
Section 3-41-2 NMSA 1978 allows a municipality to impose a property tax of up to $5 per
$1,000 of net taxable value to provide for flood control structures such as dikes or flood
channels; this tax must be approved by municipality’s voters. The provisions of this bill allow an
alternative funding mechanism that can be imposed by the governing body by ordinance.
The New Mexico Environment Department (NMED) makes several points about the provisions
of this bill:
Stormwater discharge from a stormwater utility, as well as stormwater conveyance and
treatment systems, to any surface water in New Mexico—including lakes, rivers, streams
(including intermittent and ephemeral streams), mudflats, sandflats, wetlands, sloughs,
prairie potholes, wet meadows, playa lakes, reservoirs, natural ponds, and tributaries or
adjacent wetlands—must comply with state water quality standards. Such discharges may
also require a federal or state surface water quality permit. Municipalities will need to
comply with all relevant water laws, including obtaining all required permits depending on
the discharge.
SB7 provides municipalities with tools to better manage stormwater runoff, which can
indirectly support source water protection efforts by reducing pollutants and sediments
entering drinking water sources. The bill establishes a framework for creating stormwater
utilities and funding mechanisms, enabling municipalities to address localized flooding,
erosion, and other stormwater runoff challenges. While SB7 does not explicitly target source
or surface water protection, it can complement water quality initiatives if municipalities
prioritize projects that benefit source water areas and incorporate stormwater pollution
prevention plans. These plans include best management practices and engineering controls Senate Bill 7 – Page 3
designed to prevent pollutants from entering surface waters through stormwater flows.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
Surface water quality discharge permits are included in Senate Bill 21, Pollutant
Discharge Elimination System, and Senate Bill 22, Water Quality & Pollution.
OTHER SUBSTANT IVE ISSUES
NMED notes:
Municipalities often operate with constrained budgets, limited staffing, and limited
resources. Without proper planning, the creation of a stormwater utility could place
additional strain on existing operations and reduce the effectiveness of essential services.
While stormwater management is an important component of protecting water quality
and mitigating pollution, the implementation of a stormwater utility must be done in a
way that it complements, rather than competes with, other municipal utility functions.
LG/hj/SL2