2004 Committee Substitute for HB0312AGS

HOUSE AGRICULTURE AND WATER RESOURCES COMMITTEE SUBSTITUTE FOR

HOUSE ENERGY AND NATURAL RESOURCES COMMITTEE SUBSTITUTE FOR

HOUSE BILL 312

46th legislature - STATE OF NEW MEXICO - second session, 2004

AN ACT

RELATING TO WATER; PROVIDING FOR A STRATEGIC WATER RESERVE; PROVIDING FOR ADDITIONAL POWERS AND DUTIES OF THE INTERSTATE STREAM COMMISSION; AUTHORIZING THE ISSUANCE OF SEVERANCE TAX BONDS FOR THE ACQUISITION OF WATER RIGHTS FOR THE STRATEGIC WATER RESERVE; MAKING AN APPROPRIATION.

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

Section 1. A new section of Chapter 72, Article 14 NMSA 1978 is enacted to read:

"[NEW MATERIAL] INTERSTATE STREAM COMMISSION--ADDITIONAL POWERS--STRATEGIC WATER RESERVE.--

A. The interstate stream commission shall establish a strategic water reserve and may purchase from willing sellers or lease or receive through donation surface water rights to comprise the reserve. The commission may also purchase or lease from willing sellers or lessors or receive by donation underground water rights for the strategic water reserve for cessation of pumping or limited short-term stream augmentation. At no time shall the use of water rights held by the strategic water reserve result in an increase in net depletions in any basin. The commission shall pay no more than the appraised market value to purchase or lease water rights and storage rights for the strategic water reserve. The commission may accept money or grants from federal or other governmental entities or other persons to purchase or lease water rights for the strategic water reserve and to pay administrative costs. The commission shall not acquire water rights that are served by or owned by an acequia or community ditch established pursuant to Chapter 73, Articles 2 and 3 NMSA 1978 for inclusion in the strategic water reserve. The commission shall acquire only water rights recognized by the state engineer to have sufficient seniority and consistent, historic beneficial use to effectively contribute to the purpose of the strategic water reserve. The commission shall not acquire water rights for the strategic water reserve by condemnation. Water rights in the strategic water reserve shall not be subject to forfeiture pursuant to Chapter 72 NMSA 1978. Water rights shall only be acquired with the explicit approval of the commission.

B. Water rights in the strategic water reserve shall be used to:

(1) assist the state in complying with interstate stream compacts and court decrees, except where it would conflict with a special water users association established pursuant to Chapter 73, Article 10 NMSA 1978 or conflict with the Pecos river settlement or other state law; or

(2) assist the state and water users in complying with the federal Endangered Species Act of 1973 as part of a collaboratively developed compliance program involving state and federal agencies and water users or in a program intended to avoid additional listings of species.

C. The interstate stream commission shall develop priorities for the acquisition of water rights for the strategic water reserve in consultation with the New Mexico interstate stream compact commissioners, the office of the state engineer and the attorney general's office. This prioritization shall be developed in coordination with the boards of the following organizations within the affected local area:

(1) special districts established pursuant to Chapter 73 NMSA 1978;

(2) soil and water conservation districts;

(3) water authorities; and

(4) water planning regions.

D. The interstate stream commission may sell or lease water rights from the strategic water reserve at no less than the appraised market value only if the rights are no longer necessary for the purposes for which they were acquired for the reserve; provided that water rights in the reserve shall not be sold to the United States. Proceeds of any sale are appropriated to the office of the state engineer to adjudicate water rights. Proceeds of any leases are appropriated to the interstate stream commission for carrying out the purposes of the strategic water reserve.

E. Water rights acquired for the strategic water reserve or water rights sold or leased from the reserve shall remain in their river reach or ground water basin of origin.

F. Transactions with members of an irrigation or conservancy district established pursuant to Chapter 73 NMSA 1978 shall provide for the strategic water reserve to pay the annual assessment to the district that would accrue to the district absent the transaction.

G. Cumulative impacts of the strategic water reserve acquisitions and uses shall not adversely affect existing water users or delivery systems.

H. The interstate stream commission shall adopt rules consistent with the terms of this section, including rules to ensure:

(1) that water acquired for the strategic water reserve is used only for the purposes of the reserve; and

(2) adequate public notice in each affected area.

I. The interstate stream commission shall annually report to the appropriate committee of the legislature on the status of the strategic water reserve."

Section 2. A new section of the Severance Tax Bonding Act is enacted to read:

"[NEW MATERIAL] BONDING CAPACITY--AUTHORIZING ISSUANCE OF SEVERANCE TAX BONDS FOR THE STRATEGIC WATER RESERVE.--

A. By January 15 of each year, the board of finance division of the department of finance and administration shall estimate the amount of bonding capacity available for severance tax bonds to be authorized by the legislature. The division shall authorize ten percent of the estimated bonding capacity each year beginning in fiscal year 2005 and ending in fiscal year 2025, and the legislature authorizes the state board of finance to issue severance tax bonds in the annually deducted amount for use by the interstate stream commission for the acquisition and leasing of water rights and storage rights for the strategic water reserve and its administrative costs.

B. The interstate stream commission shall certify to the state board of finance the need for issuance of bonds for acquisition of water rights for the strategic water reserve. The state board of finance may issue and sell the bonds in the same manner as other severance tax bonds in an amount not to exceed the authorized amount provided for in this section. If necessary, the state board of finance shall take the appropriate steps to comply with the federal Internal Revenue Code of 1986. Proceeds from the sale of the bonds are appropriated to the interstate stream commission to acquire and lease water and storage rights for the strategic water reserve and its administrative costs.

C. Any unexpended balance from proceeds of severance tax bonds issued for the strategic water reserve shall revert to the severance tax bonding fund as of the first day after the end of the tenth fiscal year following the fiscal year in which the severance tax bonds were issued, after reserving for unpaid costs and expenses covered by binding written obligations to third parties."

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