[1] NOTE:  As provided in LFC policy, this report is intended only for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

 

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F I S C A L   I M P A C T   R E P O R T

 

 

 

SPONSOR:

Leavell

 

DATE TYPED:

1/22/02

 

HB

 

 

SHORT TITLE:

Lea & Carlsbad Conservation District Study

 

SB

16

 

 

ANALYST:

L. Baca

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY02

FY03

FY02

FY03

 

 

 

$500.0

 

 

Non-rec

General Fund

 (Parenthesis ( ) Indicate Expenditure Decreases)

 

SOURCES OF INFORMATION

 

Energy, Minerals & Natural Resources Department (NMNRD)

State Land Office (SLO)

Department of Agriculture (NMDA)

 

SUMMARY

 

     Synopsis of Bill

 

Senate Bill 16 appropriates $500.0 from the general fund to the Board of Regents of New Mexico State University (NMSU) to finance a study by the Lea and Carlsbad soil and water conservation districts concerning the use of water produced during oil and gas exploration from deep underground

 

     Significant Issues

 

The NMDA analysis states that underground water in the geographic area encompassed by the Lea and Carlsbad soil and water conservation districts is being used faster than it is replenished. This appropriation would continue an on-going study to reclaim water associated with oil and gas exploration for agricultural, industrial and possibly domestic uses.  The NMEMRD’s analysis indicates that such a study that leads to reclamation of water for public use would be of benefit to all. 

 

FISCAL IMPLICATIONS

 

The appropriation of $500.0 contained in this bill is a non-recurring expense to the general fund. Any unexpended or unencumbered balance remaining at the end of fiscal year 2003 shall revert to the general fund.

 

ADMINISTRATIVE IMPLICATIONS

 

The program will be administered by NMSU.

 

TECHNICAL ISSUES

 

In its analysis, EMRD listed the following technical questions:

 

1.     The proposed legislation seeks to study the “use” of water, but the term is undefined and

            could lead to very general study or the study could be focused on a single issue.

 

2.     The phrase “underground” may be considered ambiguous.  Limiting the study to oil and                           gas exploration leaves out an important element: production.

 

The analysis suggests revising the last clause of the first sentence to read as follows: “ … producing oil and gas exploration and production.”

 

OTHER SUBSTANTIVE ISSUES

 

The following information is provided for information only.  It is not intended as a commentary on the merits of the bill.

 

            This request was not included in NMSU’s budget request.  Consequently, the New Mexico Commission on Higher Education did not recommend this program expansion.

 

POSSIBLE QUESTIONS

 

1.         Are funds for conduct of this study available from other sources such as the federal government ? 

2.         Are there private industries that will benefit from the results of the study ?

3.         Have efforts been made to obtain funds from sources other than the Legislature ?

 

LB/njw

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