45th legislature - STATE OF NEW MEXICO - second session, 2002

RELATING TO WATER; AUTHORIZING THE ISSUANCE OF SEVERANCE TAX BONDS OVER THREE YEARS FOR PROJECTS THAT WILL PROTECT WATER RIGHTS, RETIRE WATER RIGHTS AND CONSERVE WATER IN THE LOWER PECOS RIVER BASIN; MAKING AN APPROPRIATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. FINDINGS--AUTHORIZATION FOR SEVERANCE TAX BONDS--APPROPRIATION OF PROCEEDS FOR PROJECTS.--

A. The legislature finds that:

(1) a severe imbalance exists between water right holders, New Mexico obligations under the Pecos River Compact and water supply in the lower Pecos river basin of New Mexico;

(2) the imbalance is threatening the economic well-being of the state and the area comprising the lower Pecos river basin and is causing undue hardship for all residents in the basin; and

(3) a mechanism needs to be in place to protect water rights, retire water rights and conserve water so that a balance will be restored between water uses and water supply in the lower Pecos river basin.

B. The state board of finance may issue and sell severance tax bonds in fiscal years 2002 through 2004 in compliance with the Severance Tax Bonding Act in an amount not exceeding a total of forty-eight million dollars ($48,000,000) when the interstate stream commission certifies the need for the issuance of the bonds; provided that no more than sixteen million dollars ($16,000,000) may be issued in any one fiscal year. The state board of finance shall schedule the issuance and sale of the bonds in the most expeditious and economical manner possible upon a finding by the board that the projects have been sufficiently developed to justify the issuance and that the projects can proceed to contract within a reasonable time. The state board of finance shall further take the appropriate steps necessary to comply with the federal Internal Revenue Code of 1986, as amended. The proceeds from the sale of the bonds are appropriated to the interstate stream commission for the purpose of financing projects pursuant to the provisions of this section. Any unexpended or unencumbered balance remaining at the end of fiscal year 2006 shall revert to the severance tax bonding fund. If the interstate stream commission has not certified the need for the issuance of the bonds by the end of fiscal year 2004, the authorization provided in this section shall expire.

C. No certification shall be made by the interstate stream commission pursuant to Subsection B of this section unless the commission has entered into contracts with the governing body of the Carlsbad irrigation district and with the governing body of the Pecos valley artesian conservancy district that specify the actions to be taken or avoided by each party to ensure that the expenditure of the bond proceeds by the interstate stream commission will be effective toward compliance with New Mexico's obligations under the Pecos River Compact.

D. The interstate stream commission, after consultation with the governing board of each irrigation district, conservancy district and artesian conservancy district in the lower Pecos river basin, shall determine the need for projects to be funded with proceeds from the bonds and make the certifications pursuant to Subsection B of this section that revenue from the bonds is needed. Expenditure of the proceeds shall be made only within the Pecos river basin downstream from the Sumner dam for projects that:

(1) protect water rights, retire water rights or include other measures designed to correct the imbalances between water right holders, New Mexico obligations under the Pecos River Compact and water supply of the lower Pecos river basin; or

(2) are designed for water conservation, including restoration of native vegetation and other water supply enhancement measures.

E. If, at any time, the interstate stream commission determines that the total water rights purchased with bond revenues pursuant to this section are in excess of those water rights permanently needed for compliance with New Mexico's obligations under the Pecos River Compact, then the commission shall offer the excess water rights for sale to the private sector. By rule, the commission shall establish procedures for the sale, and any revenue received as a result of the sale shall be deposited in the New Mexico irrigation works construction fund.