HOUSE JUDICIARY COMMITTEE SUBSTITUTE FOR

HOUSE AGRICULTURE AND WATER RESOURCES COMMITTEE SUBSTITUTE FOR

HOUSE BILL 185

49th legislature - STATE OF NEW MEXICO - first session, 2009

AN ACT

RELATING TO SPECIAL DISTRICTS; ENACTING A SECTION OF THE NMSA 1978 TO PROVIDE FOR THE CREATION OF THE LOWER RIO GRANDE PUBLIC WATER WORKS AUTHORITY; PROVIDING FOR POWERS AND DUTIES OF THE AUTHORITY.

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

     Section 1. A new section of Chapter 73 NMSA 1978 is enacted to read:

     "[NEW MATERIAL] LOWER RIO GRANDE PUBLIC WATER WORKS AUTHORITY.--

          A. The "Lower Rio Grande public water works authority" is created. The authority is a political subdivision of the state and shall be an independent public body. The authority is composed of Berino mutual domestic water consumers and mutual sewage works association, Desert Sands mutual domestic water consumers association, La Mesa mutual domestic water consumers association, Mesquite mutual domestic water consumers and mutual sewage works association and Vado mutual domestic water consumers association, all serving unincorporated communities within Dona Ana county. The voting community membership of the five founding entities have approved by resolution the development of the authority.

          B. The authority may adopt rules and resolutions, governance policies and procedures necessary to exercise the powers conferred pursuant to this section.

          C. All functions, appropriations, money, records and equipment and all personal property and real property, including water rights, easements, permits and infrastructure, as well as all encumbrances, debts and liabilities pertaining to or owned by the founding entities shall be transferred to the authority.

          D. The authority's service area shall consist of the founding entities' existing place of use on file with and approved by the state engineer and shall be filed in the public records of Dona Ana county. An application shall be filed with the state engineer to combine and commingle water rights and to combine the existing entities' place of use into the authority's service area. In the event that another entity elects to merge into the authority, the merger shall include the combining and commingling of water rights with the authority, and the authority's service area shall be amended to include that entity's place of use and shall be filed with the state engineer. The authority's initial service area and any subsequent amendments to its service area shall be designated in a plat filed in the public records of Dona Ana county.

          E. The authority may provide for water and wastewater services, road improvements for the protection of the authority's infrastructure or renewable energy projects that are integral to the operation and maintenance of the authority's facilities or any combination or parts thereof.

          F. The authority shall exercise all powers allowed pursuant to law, including:

                (1) regulating, supervising and operating the authority's facilities;

                (2) establishing rates and imposing assessments, fees and charges and taking action necessary for the enforcement thereof;

                (3) assessing a standby charge for the privilege of connection into the authority's service at some date in the future if the property line is within three hundred feet of the authority's service lines and the property line is located within the boundaries of the authority. This section applies to new connections after the enactment of this act;

                (4) acquiring, from a willing seller only, holding and using water rights in an amount necessary to meet its reasonable needs not to exceed forty years pursuant to Section 72-1-9 NMSA 1978;

             (5) shutting off, after notice, unauthorized connections, illegal connections or a connection for which charges are delinquent in payment;

                (6) entering into contracts for services with private entities, the state, municipalities, counties and the federal government and other public bodies to further its public purposes;

                (7) entering into joint powers agreements with other governmental entities;

                (8) acquiring and disposing of real property, personal property and rights of way;

                (9) condemning property pursuant to the Eminent Domain Code as the last resort and only for the purposes of construction, maintenance and operations of the authority's infrastructure;

                (10) hiring and retaining agents, employees and consultants, as needed;

                (11) adopting and using a governmental seal;

                (12) placing a lien on property for unpaid assessments, charges and fees and enforcing the lien in a manner pursuant to law;

                (13) suing and being sued and being a party to suits, actions and proceedings; and

                (14) having and exercising all rights and powers necessary, incidental to or implied from the specific powers granted in this section.

          G. As a political subdivision of the state and a member-owned community water system, the authority shall be subject to the:

                (1) applicable rules and regulations of the department of environment, and in its discretion the department may:

                     (a) conduct periodic reviews of the operation of the authority;

                     (b) require the authority to submit information to the department;

                     (c) upon department of environment discretion or upon a petition of twenty-five percent of the members of the authority, conduct an investigation as it deems necessary to ensure the authority's compliance with all applicable statutes, rules, regulations and reporting requirements; and

                     (d) after a hearing, set and collect rates and fees and use the same for the proper operation and management of the authority;

                (2) applicable rules and regulations of the department of finance and administration, local government division and budget and finance bureau;

                (3) Open Meetings Act;

                (4) Inspection of Public Records Act;

                (5) Audit Act;  

                (6) Procurement Code;

                (7) Governmental Conduct Act;

                (8) special election procedures pursuant to Chapter 1, Article 24 NMSA 1978;

                (9) Chapter 72 NMSA 1978; and

                (10) applicable rules and regulations of the state engineer.

          H. The authority is a political subdivision of the state and a member-owned community water system and shall not be subject to the jurisdiction of the public regulation commission or the provisions of the Public Utility Act.

          I. The authority may issue utility system revenue bonds and obligations for acquiring real and personal property needed for the utility system and for extending, enlarging, renovating, repairing or otherwise improving its facilities. The authority may issue revenue anticipation notes with maturities and terms to be approved by the board of directors of the authority. The authority may pledge irrevocably net revenues from the operation of the utility system for payment of the principal, premiums and interest on the bonds. The utility system revenue bonds:

                (1) may have interest, appreciated principal value or any part thereof payable at intervals or at maturity as the authority determines;

                (2) may be subject to prior redemption at the authority's option at such time and upon such terms and conditions, with or without the payment of a premium, as determined by the authority;

                (3) may mature at any time not exceeding forty years after the date of issuance;

                (4) may be serial in form and maturity, may consist of one bond payable at one time or in installments or may be in another form as determined by the authority;

                (5) shall be sold for cash at, above or below par and at a price that results in a net effective interest rate that does not exceed the maximum permitted by the Public

Securities Act; and

                (6) may be sold at a public or negotiated sale.

          J. The authority's board of directors may adopt a resolution declaring the necessity for the issuance of utility system revenue bonds or other obligations and may authorize the issuance of utility system revenue bonds or other obligations by an affirmative vote of a majority of all members of the authority's board of directors. Utility revenue bonds and the resolution authorizing their issuance shall be subject to voter approval with oversight from the department of finance and administration and the New Mexico finance authority. The bonds authorized by the authority and their income shall be exempt from taxation by the state and its political subdivisions.

          K. Except for the purpose of refunding previous utility system revenue bond issues, the authority shall not sell utility system revenue bonds payable from pledged revenues after the expiration of three years from the date of the resolution authorizing their issuance. Any period of time during which a utility system revenue bond is in litigation shall not count toward the determination of the expiration date of that issue.

          L. The authority shall be governed by a board of directors. The directors of the initial board shall consist of five directors representing each of the founding entities. The directors of the initial board shall serve until their successors are elected. After the terms of the initial directors are completed, the succeeding board of directors shall be elected by districts from a minimum of five and a maximum of seven electoral districts. Each director, at the time of election, shall reside within the electoral district of the authority from which that member is elected. The boundaries and the number of electoral districts shall be established by the initial board within two years of the creation of the authority. The board may in its governance document provide for redistricting upon any change in the authority's boundary. The elected board of directors shall serve staggered terms to be established in the governance document developed by the initial board. Elections shall be conducted in accordance with the special election procedures pursuant to Chapter 1, Article 24 NMSA 1978 and may be conducted by the Dona Ana county elections bureau.

          M. As used in this section, "public water works authority" means a utility organized as a political subdivision of the state for the purposes of constructing infrastructure and furnishing water and wastewater services for domestic, commercial or industrial uses, road improvements for the protection of the authority's infrastructure and renewable energy projects; and entering into agreements with other entities for the provision of other services, including but not limited to water conservation and reclamation, source water protection, drainage, flood control, solid waste, planning and zoning."

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