SB367: including state water pollution control and public water system grants proposed by the department of environmental services in the capital budget.

SB 367-FN - AS INTRODUCED

2016 SESSION

16-2836

10/01

SENATE BILL 367-FN

AN ACT including state water pollution control and public water system grants proposed by the department of environmental services in the capital budget.

SPONSORS: Sen. Bradley, Dist 3; Rep. Buco, Carr. 2

COMMITTEE: Capital Budget

ANALYSIS

This bill requires that projects receiving state aid grants under RSA 486 and RSA 486-A for water pollution control and public water systems be included by the department of environmental services for authorization in the biennial state capital budget.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

16-2836

10/01

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Sixteen

AN ACT including state water pollution control and public water system grants proposed by the department of environmental services in the capital budget.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 Aid to Municipalities for Water Pollution Control; State Contributions. Amend RSA 486:1, IV(b) to read as follows:

(b) The commissioner or [his] designee shall hold an annual public hearing to receive testimony on the projects recommended by the department to receive grants in the next [fiscal year] state fiscal biennium. After considering the testimony offered at the hearing, the commissioner shall finalize the priority list for the next [fiscal year] biennium, and project assistance shall be granted accordingly as authorized in the biennial state capital budget.

2 New Section; Aid to Municipalities for Water Pollution Control; Funding. Amend RSA 486 by inserting after section 7 the following new section:

486:7-a State Funding of Eligible Projects. The commissioner of the department of environmental services shall include in the department's biennial capital budget request, the list of the pollution control projects whose eligible costs the department proposes to fund during the next fiscal biennium.

3 State Aid to Public Water Systems; Administration. Amend RSA 486-A:9, II(d) to read as follows:

(d) Select projects for funding and administer grant funds as authorized by the biennial state capital budget.

4 New Section; Aid to Public Water Systems; State Funding. Amend RSA 486-A by inserting after section 9 the following new section:

486-A:9-a State Funding of Eligible Projects. The commissioner of the department of environmental services shall include in the department's biennial capital budget request, the list of public water system projects whose eligible costs the department proposes to fund during the next fiscal biennium.

5 Effective Date. This act shall take effect 60 days after its passage.

LBAO 16-2836

12/11/15

SB 367-FN- FISCAL NOTE

AN ACT including state water pollution control and public water system grants proposed by the department of environmental services in the capital budget.

FISCAL IMPACT:

The Department of Environmental Services and State Treasury state this bill, as introduced, will have an indeterminable impact on state expenditures in FY 2017 and each year thereafter. There will be no impact on state, county and local revenue or on county and local expenditures.

METHODOLOGY:

The Department of Environmental Services states this bill changes funding of state aid grants under RSA 486 and 486-A from the State Operating Budget to the State Capital Budget. The Department would be required to include a list of eligible water pollution control projects and public water system projects that it plans to fund in the coming biennium in its capital budget request. The Department makes the following assumptions:

Existing projects funded in the operating budget will remain in the operating budget.

Grant payment estimates assume a 20-year payback period and the current State Revolving Loan Fund interest rate of 3.168%. The actual payback periods and interest rates will vary with each application.

Estimates include all eligible projects the Department is aware of, but do not include projects to be undertaken by municipalities in the future.

New grants for public water systems include known interconnection projects, which are the only activities likely to occur and be eligible for state aid grants under existing law. The annual cost is estimated to be $200,000.

Since these costs will be funded through the capital budget, the State will incur additional interest expense on the bonded debt. The Department estimates the interest expense on $2 million of bonded debt at 5% over 20 years would equal approximately $900,000.

Based on these assumptions the Department estimated the fiscal impact as follows:

FY 2017

FY 2018

FY 2019

FY 2020

Wastewater Applications Received

$0

$1,225,692

$1,188,141

$1,176,120

Wastewater Construction Complete

$0

$961,750

$961,746

$961,747

Wastewater Construction Active

$0

$0

$0

$2,059,889

Wastewater Construction Pending

$0

$0

$0

$63,806

Public Water Systems

$0

$200,000

$200,000

$200,000

Increased Capital Budget Request

$0

$2,387,442

$2,349,887

$4,461,562

Decreased Operating Budget Request

$0

($2,387,442)

($2,349,887)

($4,461,562)

Additional State Debt Service Expense

$0

$60,000

$175,000

$335,000

The State Treasury indicates, pursuant to RSA 6-C, the maximum amount of net tax-support debt that could be authorized for the FY 2016-2017 biennium was $144.7 million. The current biennial capital budget, Chapter 220, Laws of 2015, authorized $125.9 million, leaving $18.8 million of general obligation bonding capacity pursuant to the statutory debt limit under RSA 6-C. The Treasury does not have information on projects that may be requested or approved and can make no determination regarding whether inclusion of the state aid grants in the capital budget will impact state indebtedness.