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

RELATING TO WATER; CREATING THE LOWER PECOS BASIN WATER PRESERVATION DISTRICT; LEVYING AN AD VALOREM ASSESSMENT ON CERTAIN PROPERTY IN THE DISTRICT; IMPOSING THE LOWER PECOS BASIN WATER PRESERVATION GROSS RECEIPTS TAX; AUTHORIZING THE NEW MEXICO FINANCE AUTHORITY TO ISSUE LOWER PECOS BASIN WATER PRESERVATION REVENUE BONDS FOR PROJECTS TO CONSERVE WATER AND TO PROTECT AND RETIRE WATER RIGHTS IN THE BASIN; MAKING AN APPROPRIATION.

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

Section 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 20 of this act may be cited as the "Lower Pecos Basin Water Preservation District Act".

Section 2. [NEW MATERIAL] FINDINGS AND PURPOSE.--

A. The legislature finds that:

(1) a severe imbalance exists among 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 four counties comprising the lower Pecos basin and is causing undue hardship to the state and for all residents in the four counties;

(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 all water uses and water supply in the lower Pecos river basin;

(4) the costs for correcting the imbalance, protecting the water rights and conserving the water should be borne, in part, by the persons who will most benefit;

(5) the creation of the special district and the assessments and taxes imposed pursuant to the Lower Pecos Basin Water Preservation District Act will serve a public use and will promote the health, safety, prosperity, security and general welfare of the inhabitants of the district and of the state;

(6) the provisions of the Lower Pecos Basin Water Preservation District Act and the actions authorized by that act will be a special benefit to the residents of the district and the property within the boundaries of the district; and

(7) a general law cannot be made applicable to the lower Pecos basin because of the number of atypical and special conditions and problems associated with it.

B. The purpose of the Lower Pecos Basin Water Preservation District Act is to create a special district in which ad valorem assessments and gross receipts taxes are levied to provide a funding source so that the economic viability of the district and its residents can be restored, protected and strengthened.

Section 3. [NEW MATERIAL] DEFINITIONS.--As used in the Lower Pecos Basin Water Preservation District Act:

A. "authority" means the New Mexico finance authority;

B. "board" means the board of directors of the lower Pecos basin water preservation district;

C. "department" means the taxation and revenue department; and

D. "district" means the lower Pecos basin water preservation district.

Section 4. [NEW MATERIAL] WATER PRESERVATION DISTRICT CREATED--BOARD OF DIRECTORS--APPOINTMENT--DUTIES.--

A. The "lower Pecos basin water preservation district" is created. The district is comprised of the area encompassing Eddy, Chaves, Lincoln and De Baca counties.

B. The district shall be governed by a board of directors consisting of:

(1) one member appointed by the board of county commissioners of each county included in the district, who shall be a resident of that county;

(2) one member appointed by the governing body of each irrigation district, each conservancy district and each artesian conservancy district wholly or partly located in the lower Pecos basin water preservation district; and

(3) the state engineer or his designee.

C. Members shall be appointed for terms of three years, except that the initial appointed members from Lincoln and De Baca counties shall be appointed for a one-year term.

D. A public member of the board shall be reimbursed by the county or district that he represents at rates provided in the Per Diem and Mileage Act and shall receive no other compensation, perquisite or allowance.

E. The board shall elect a chair and such other officers as necessary to perform its duties.

F. The board shall meet at the call of the chair, except that:

(1) the board shall hold its initial meeting prior to September 1, 2002; and

(2) the board shall meet not less than once each fiscal year.

G. The board shall:

(1) review projects, proposed by the state engineer, to be funded by proceeds from the issuance of lower Pecos basin water preservation revenue bonds and recommend any additions, deletions and other changes to the proposal;

(2) review the status of projects being completed with expenditures of the bond proceeds;

(3) advise the state engineer on the need for future projects funded by proceeds from the issuance of lower Pecos basin water preservation revenue bonds and the need for continuing assessments and taxes imposed pursuant to the Lower Pecos Basin Water Preservation District Act; and

(4) by resolution, issue guidelines for the assessment and collection of the lower Pecos basin water preservation gross receipts tax.

H. The exercise of any power or duty granted to the district or board shall not duplicate or infringe upon any power or duty of any irrigation district, conservancy district or artesian conservancy district wholly or partly located in the lower Pecos basin water preservation district.

Section 5. [NEW MATERIAL] PROPERTY ASSESSMENT--TERMINATION.--

A. There is hereby levied an ad valorem assessment on all irrigated farmland in the district. The rate of the assessment shall be one dollar ($1.00) per one thousand dollars ($1,000) of net taxable value unless a lower amount is required by operation of the rate limitation provisions of Section 7-37-7.1 NMSA 1978. All statutes relating to the levy and collection of property taxes, including the collection of delinquent taxes and sale of property for nonpayment of taxes, apply to the assessment, and it is the duty of all tax officials and authorities to cause the assessment to be assessed and collected. Upon the collection of the assessment, each county treasurer shall pay the amount attributable to the assessment to the authority for deposit into the lower Pecos basin water preservation bonding fund.

B. The assessment levied pursuant to Subsection A of this section shall apply to tax years beginning on or after the effective date of the Lower Pecos Basin Water Preservation District Act, except that the assessment shall terminate at the end of a tax year if, prior to July 1 of that tax year, each county treasurer is notified that the authority has made a determination pursuant to Section 13 of that act that future expenditures from the lower Pecos basin water preservation bonding fund are not needed.

Section 6. [NEW MATERIAL] LOWER PECOS BASIN WATER PRESERVATION GROSS RECEIPTS TAX--IMPOSITION--RATE.--For the privilege of engaging in business in the district, there is imposed an excise tax on any person engaging in business in the district. The rate of the tax shall equal one-fourth of one percent of the gross receipts of a person engaging in business in the district. The tax shall be known as the "lower Pecos basin water preservation gross receipts tax".

Section 7. [NEW MATERIAL] LOWER PECOS BASIN WATER PRESERVATION GROSS RECEIPTS TAX--GUIDELINES--EFFECTIVE DATE OF RESOLUTION--COMPLIANCE WITH GROSS RECEIPTS AND COMPENSATING TAX ACT AND REQUIREMENTS OF DEPARTMENT--SUBMISSION OF COPY TO DEPARTMENT.--

A. At the initial meeting of the board, the board shall, by resolution, establish guidelines for the assessment and collection of the lower Pecos basin water preservation gross receipts tax. The lower Pecos basin water preservation gross receipts tax shall be effective on July 1 or January 1, whichever date occurs first, after the expiration of at least three months from the date the adopted resolution is mailed or delivered to the department. The resolution shall include the effective date.

B. The resolution establishing guidelines for the lower Pecos basin water preservation gross receipts tax shall adopt by reference the same definitions and the same provisions relating to exemptions and deductions as are contained in the Gross Receipts and Compensating Tax Act then in effect and as it may be amended from time to time.

C. The board, when establishing the guidelines for the lower Pecos basin water preservation gross receipts tax, shall adopt the model resolution with respect to the tax furnished to the board by the department.

D. A certified copy of the resolution establishing the guidelines for the lower Pecos basin water preservation gross receipts tax shall be mailed or delivered to the department within five days after the resolution is adopted.

Section 8. [NEW MATERIAL] LOWER PECOS BASIN WATER PRESERVATION GROSS RECEIPTS TAX--SPECIFIC EXEMPTIONS.--The lower Pecos basin water preservation gross receipts tax is not imposed on the gross receipts arising from transporting for hire persons or property by railroad, motor vehicle, air transportation or any other means from one point within the district to another point outside the district, nor is the tax imposed on direct satellite broadcasting or on gross receipts that are exempt by federal law.

Section 9. [NEW MATERIAL] LOWER PECOS BASIN WATER PRESERVATION GROSS RECEIPTS TAX--COLLECTION BY DEPARTMENT--TRANSFER OF PROCEEDS--DEDUCTION.--

A. The department shall collect the lower Pecos basin water preservation gross receipts tax in the same manner and at the same time as it collects the state gross receipts tax.

B. The department may deduct an amount not to exceed three percent of the lower Pecos basin water preservation gross receipts tax as a charge for the administrative costs of collection.

C. The department shall transfer to the lower Pecos basin water preservation bonding fund the amount collected from the lower Pecos basin water preservation gross receipts tax, less any disbursement for administrative charges made pursuant to Subsection B of this section, tax credits, refunds and the payment of interest applicable to the tax. The transfer to the fund shall be made within the month following the month in which the tax is collected.

Section 10. [NEW MATERIAL] LOWER PECOS BASIN WATER PRESERVATION GROSS RECEIPTS TAX--ADMINISTRATION AND ENFORCEMENT OF ACT.--

A. The department shall interpret the provisions of the Lower Pecos Basin Water Preservation District Act with respect to the lower Pecos basin water preservation gross receipts tax imposed under that act.

B. The department shall administer and enforce the collection of the lower Pecos basin water preservation gross receipts tax, and the Tax Administration Act applies to the administration and enforcement of the lower Pecos basin water preservation gross receipts tax.

Section 11. [NEW MATERIAL] LOWER PECOS BASIN WATER PRESERVATION GROSS RECEIPTS TAX--TERMINATION.--The lower Pecos basin water preservation gross receipts tax shall terminate on the July 1 or January 1 occurring after three months from the date that the department is notified that the authority has made a determination pursuant to Section 13 of the Lower Pecos Basin Water Preservation District Act that future expenditures from the lower Pecos basin water preservation bonding fund are not needed.

Section 12. [NEW MATERIAL] AUTHORITY MAY ISSUE LOWER PECOS BASIN WATER PRESERVATION REVENUE BONDS--APPROPRIATION OF PROCEEDS.--

A. The authority is authorized to issue and sell revenue bonds, known as "lower Pecos basin water preservation revenue bonds", payable solely from the lower Pecos basin water preservation bonding fund, in compliance with the Lower Pecos Basin Water Preservation District Act for the purpose of funding projects pursuant to Subsection B of this section when the state engineer certifies the need for the issuance of the bonds. The authority shall schedule the issuance and sale of the bonds in the most expeditious and economical manner possible upon a finding by the authority that the projects can proceed within a reasonable time. The authority shall further take the appropriate steps necessary to comply with the Internal Revenue Code of 1986, as amended. Proceeds from the sale of the bonds are appropriated to the state engineer for expenditure in fiscal year 2003 and subsequent fiscal years for the purpose of completing projects pursuant to Subsection B of this section.

B. The state engineer, after consultation with the board, shall determine the projects to be funded with proceeds from lower Pecos basin water preservation revenue bonds and make the certification pursuant to Subsection A of this section that revenue from the bonds is needed. Expenditure of the proceeds shall be made only within the district for projects that:

(1) protect water rights, retire water rights or include other measures designed to correct the imbalances among 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.

Section 13. [NEW MATERIAL] LOWER PECOS BASIN WATER PRESERVATION BONDING FUND CREATED--MONEY IN THE FUND PLEDGED.--

A. The "lower Pecos basin water preservation bonding fund" is created as a special fund within the authority. The fund shall be administered by the authority as a special account. The fund shall consist of money appropriated to the fund, revenues from property assessments transferred to the fund and gross receipts tax revenues distributed to the fund by law. Earnings of the fund shall be credited to the fund. Balances in the fund at the end of any fiscal year shall remain in the fund, except as provided in this section.

B. Money in the lower Pecos basin water preservation bonding fund is pledged for the payment of principal and interest on all lower Pecos basin water preservation revenue bonds issued pursuant to the Lower Pecos Basin Water Preservation District Act. Money in the fund is appropriated to the authority for the purpose of paying debt service, including redemption premiums, on the lower Pecos basin water preservation revenue bonds and the expenses incurred in the issuance, payment and administration of the bonds.

C. Upon a determination by the state engineer pursuant to Section 20 of the Lower Pecos Basin Water Preservation District Act that expenditures from the proceeds of lower Pecos basin water preservation revenue bonds are no longer needed and upon the certification by the authority that all lower Pecos basin water preservation revenue bonds issued pursuant to the Lower Pecos Basin Water Preservation District Act have been retired, that no additional obligations of the lower Pecos basin water preservation bonding fund exist and that no additional expenditures from the fund are necessary, the state engineer shall notify, in writing, the board, the board of county commissioners and the county treasurer of each county within the district, the state treasurer and the department. Upon the termination and final distribution of revenues from the property assessment and the lower Pecos basin water preservation gross receipts tax imposed pursuant to the Lower Pecos Basin Water Preservation District Act, the lower Pecos basin water preservation bonding fund shall be dissolved and any remaining balance in the fund shall be transferred to the general funds of the four counties comprising the district. The amount transferred to each county shall be as proportional as possible to the amount received from the residents and property within that county as determined by the board.

D. The lower Pecos basin water preservation revenue bonds issued pursuant to the Lower Pecos Basin Water Preservation District Act shall be payable solely from the lower Pecos basin water preservation bonding fund or, with the approval of the bondholders, such other special funds as may be provided by law and do not create an obligation or indebtedness of the state or any of its political subdivisions within the meaning of any constitutional provision. No breach of any contractual obligation incurred pursuant to that act shall impose a pecuniary liability or a charge upon the general credit or taxing power of the state or its political subdivisions, and the bonds are not general obligations for which the state's or its political subdivisions' full faith and credit are pledged.

E. The state does hereby pledge that the lower Pecos basin water preservation bonding fund shall be used only for the purposes specified in this section and pledged first to pay the debt service on the lower Pecos basin water preservation revenue bonds issued pursuant to the Lower Pecos Basin Water Preservation District Act. The state further pledges that any law imposing or authorizing an assessment or tax, the revenue from which is pledged to retire the lower Pecos basin water preservation revenue bonds or any law authorizing the distribution of taxes or other revenues to the lower Pecos basin water preservation bonding fund or authorizing expenditures from the fund shall not be amended or repealed or otherwise modified so as to impair the bonds to which the lower Pecos basin water preservation bonding fund is dedicated as provided in this section.

Section 14. [NEW MATERIAL] AUTHORITY TO REFUND BONDS.--The authority may issue and sell at public or private sale lower Pecos basin water preservation revenue bonds to refund outstanding lower Pecos basin water preservation revenue bonds by exchange, immediate or prospective redemption, cancellation or escrow, including the escrow of debt service funds accumulated for payment of outstanding bonds, or any combination thereof when, in its opinion, such action will be beneficial to the state.

Section 15. [NEW MATERIAL] LOWER PECOS BASIN WATER PRESERVATION REVENUE BONDS--FORM--EXECUTION.--

A. The authority, except as otherwise specifically provided in the Lower Pecos Basin Water Preservation District Act, shall determine at its discretion the terms, covenants and conditions of lower Pecos basin water preservation revenue bonds, including, but not limited to, date of issue, denominations, maturities, rate or rates of interest, call features, call premiums, registration, refundability and other covenants covering the general and technical aspects of the issuance of the bonds.

B. Lower Pecos basin water preservation revenue bonds shall be in such form as the authority may determine, and successive issues shall be identified by alphabetical, numerical or other proper series designation.

C. Lower Pecos basin water preservation revenue bonds shall be signed and attested by the secretary of the authority and shall be executed with the facsimile signature of the chairman of the authority and the facsimile seal of the authority, except for bonds issued in book entry or similar form without the delivery of physical securities. Any interest coupons attached to the bonds shall bear the facsimile signature of the secretary of the authority, which officer, by the execution of the bonds, shall adopt as his own signature the facsimile thereof appearing on the coupons. Except for bonds issued in book entry or similar form without the delivery of physical securities, the Uniform Facsimile Signature of Public Officials Act shall apply, and the authority shall determine the manual signature to be affixed on the bonds.

Section 16. [NEW MATERIAL] PROCEDURE FOR SALE OF BONDS.--

A. Lower Pecos basin water preservation revenue bonds shall be sold by the authority at such times and in such manner as the authority may elect, consistent with the need of the state engineer, either at private sale for a negotiated price or to the highest bidder at public sale for cash at not less than par and accrued interest.

B. In connection with any public sale of lower Pecos basin water preservation revenue bonds, the authority shall publish a notice of the time and place of sale in a newspaper of general circulation in the state and also in a recognized financial journal outside the state. Such publication shall be made once each week for two consecutive weeks prior to the date fixed for such sale, the last publication to be two business days prior to the date of sale. Such notice shall specify the amount, denomination, maturity and description of the bonds to be offered for sale and the place, day and hour at which sealed bids therefor shall be received. All bids, except that of the state, shall be accompanied by a deposit of two percent of the principal amount of the bonds. Deposits of unsuccessful bidders shall be returned upon rejection of the bid. At the time and place specified in such notice, the authority shall open the bids in public and shall award the bonds, or any part thereof, to the bidder or bidders offering the best price. The authority may reject any or all bids and readvertise.

C. The authority may sell a lower Pecos basin water preservation revenue bond issue, or any part thereof, to the state or to one or more investment bankers or institutional investors at private sale.

Section 17. [NEW MATERIAL] LOWER PECOS BASIN WATER PRESERVATION DISTRICT ACT IS FULL AUTHORITY FOR ISSUANCE OF BONDS--BONDS ARE LEGAL INVESTMENTS.--

A. The Lower Pecos Basin Water Preservation District Act shall, without reference to any other act of the legislature, be full authority for the issuance and sale of lower Pecos basin water preservation revenue bonds, which bonds shall have all the qualities of investment securities under the Uniform Commercial Code and shall not be invalid for any irregularity or defect or be contestable in the hands of bona fide purchasers or holders thereof for value.

B. Lower Pecos basin water preservation revenue bonds are legal investments for any person or board charged with the investment of any public funds and are acceptable as security for any deposit of public money.

Section 18. [NEW MATERIAL] SUIT MAY BE BROUGHT TO COMPEL PERFORMANCE OF OFFICERS.--Any holder of lower Pecos basin water preservation revenue bonds or any person or officer being a party in interest may sue to enforce and compel the performance of the provisions of the Lower Pecos Basin Water Preservation District Act.

Section 19. [NEW MATERIAL] BONDS TAX EXEMPT.--All lower Pecos basin water preservation revenue bonds shall be exempt from taxation by the state or any of its political subdivisions.

Section 20. [NEW MATERIAL] DETERMINATION OF SUFFICIENT EXPENDITURES--NOTIFICATION.--The state engineer, after consulting with the board, may determine that the water rights within the lower Pecos river basin are no longer out of balance, that no further water conservation projects are needed within the district and that no further expenditures are needed from the proceeds of lower Pecos basin water preservation revenue bonds. Upon such a determination, the engineer shall notify the authority pursuant to Section 13 of the Lower Pecos Basin Water Preservation District Act.

Section 21. A new section of the Tax Administration Act is enacted to read:

"[NEW MATERIAL] DISTRIBUTION--LOWER PECOS BASIN WATER PRESERVATION GROSS RECEIPTS TAX.--A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the lower Pecos basin water preservation bonding fund in the amount equal to the net receipts attributable to the lower Pecos basin water preservation gross receipts tax imposed by the Lower Pecos Basin Water Preservation District Act."

Section 22. SEVERABILITY.--If any part of application of the Lower Pecos Basin Water Preservation District Act is held invalid, the remainder or its application to other situations or persons shall not be affected.