Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports if they are used for other purposes.

 

Current FIRs (in HTML & Adobe PDF formats) are available on the NM Legislative Website (legis.state.nm.us).  Adobe PDF versions include all attachments, whereas HTML versions may not.  Previously issued FIRs and attachments may also be obtained from the LFC in Suite 101 of the State Capitol Building North.

 

 

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

 

 

 

SPONSOR

Aragon

DATE TYPED

2/12/2004

HB

 

 

SHORT TITLE

Albuquerque-Bernalillo Water Utility Act

SB

422/aSPAC/aSFL#1

 

 

ANALYST

Garcia

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY04

FY05

FY04

FY05

 

 

 

See Narrative

 

 

(Parenthesis ( ) Indicate Expenditure Decreases)

 

SOURCES OF INFORMATION

LFC Files

 

Responses Received From

New Mexico Finance Authority (NMFA)

State Engineer

Department of Finance and Administration (DFA)

Public Regulation Commission (PRC)

Attorney General’s Office

 

Responses Not Received From

City of Albuquerque

County of Bernalillo

Middle Rio Grande Council of Governments

Municipal League

Association of Counties

 

SUMMARY

 

Synopsis of SFL#1 Amendment

 

Senate Floor Amendment #1 to Senate Bill 422 strikes the SPAC amendment and inserts a reference to existing statute.  The Amendment adds language on page 8, section C (3) that requires the authority to adhere to the provisions of Chapter 72 NMSA 1978.  This chapter refers specifically to the Water Code. The SFL #1 amendment condenses the SPAC amendment and moves the requirement the Authority must comply with the Water Code to only refer to when the Authority changes “the place of diversion of any water.”

 

 

Synopsis of SPAC Amendment

 

The Senate Public Affairs Committee adds language that requires provisions of the bill to comply with the state Water Code. On page 8, section C., gives the Authority the power to acquire, contract for, or condemn springs, wells, water rights, other water supplies or right of way for the acquisition of water facilities and change the place of diversion of any water in order to make the water available to the Authority; the amendment ensures the Authority must comply with the Water Code when using its powers for the above purposes.

 

The amendment may alleviate the concerns the Attorney General’s Office analysis regarding the powers of diversion of the Authority being in conflict with the Water Code.

 

Synopsis of Original Bill

 

The bill would re-create the Albuquerque-Bernalillo County Water Utility Authority, a political subdivision of the state, which would act to own, operate and maintain water and wastewater facilities serving the City of Albuquerque and Bernalillo County.  The Authority’s powers to raise and set rates, float revenue bonds and obtain funding from a variety of sources are clarified and expanded from its inception in 2003. The bill determines the Authority shall have a board of directors composed of the mayor of Albuquerque, three city councilors and three county commissioners; who serve for a period of one year and serve ex officio. 

 

The bill would provide for the utility’s powers and duties; the setting of utility rates; the issuance of revenue and refunding bonds; and for the assessment of fees.  It would exempt the authority from the Procurement Code, the Public Utility Act, and regulation by the Public Regulation Commission.  It would provide for retirement benefits for authority employees.  The bill also adds certain related and unrelated exemptions to the Procurement Code.      

 

Significant Issues

 

1)  The Act gives the Authority power to purchase, construct or condemn real assets for the water and wastewater system located within or around Bernalillo County. SB 422 also provides that the Authority has jurisdiction of all territory occupied by its water facilities, over all reservoirs, streams and other sources supplying those reservoirs and streams and up to five miles above the point from which the water is taken both within and outside Bernalillo County.  The Authority may also acquire or condemn springs, wells, water rights, rights of way, privately owned systems and may change the point of diversion to any place selected by the Authority to make water available. 

 

2) According to the Attorney General’s Office analysis, allowing the Authority to change place of diversion of any water to any place selected by the Authority in order to make the water available to the Authority is in direct conflict with existing water law as set forth under the Water Code at Chapter 72 NMSA 1997.   Section 72-2-1 provides that the State Engineer has general supervision of the waters of the state and of the measurement, appropriation, and distribution thereof.   Further Sections 72-5-24 and 72-12-7 provides that an application and approval be obtained from the state engineer if there is to be a change of purpose of use of a water right, a change of point of diversion of water or change of location of a water well.  The bill exempts the Authority from making such application and from obtaining such approval.

 

 

3) Passage and enactment in 2003 of a law to establish the Albuquerque-Bernalillo County Water Utility Authority drew four members of the authority from the city council, four from the county commission, and the mayor.  Questions and disagreements on the authority purposes, powers and directions impeded its progress. According to DFA, the bill reflects a negotiated agreement between city and county representatives on the authority on how it sets policy, administers the water utility, raises revenue, and imposes rates for services.

 

FISCAL IMPLICATIONS

 

The bill allows the Authority to impose development (impact) and franchise fees for operations. Furthermore, the bill allows the Authority to set utility rates and issue revenue and refunding bonds for its water and waste water systems.

 

The bill presents no direct impact to the state’s finances.

 

ADMINISTRATIVE IMPLICATIONS

 

SB422 divorces the Authority from the jurisdiction of the Public Regulation Commission, similar to other municipal utilities. 

 

CONFLICT COMPANIONSHIP, RELATIONSHIP

 

1) According to the PRC, there may be a conflict between Sections 9 and 16 vis a vis Section 26. Section 9(A) of this bill provides that the authority is exempt from the Public Utility Act (PUA) and regulation by the NMPRC. Section 16(B) exempts issuance of revenue bonds by the authority from NMPRC approval. However, Section 26 (D) of the bill provides that the authority is a “municipality” as defined under the PUA and Section 26 (E) provides that the authority is a “person” under the PUA if the municipality “elects” to come within the terms of the PUA as provided in Section 62-6-5, NMSA 1978. In order to avoid conflict in these sections of the bill it might be appropriate to include exception language in Sections 9 and 16 as follows: “except as provided in Section 26 of this Act”.

 

In addition, 62-6-5 (B), NMSA 1978, pertaining to an election to come within the authority of the PUA provides that the “legal voters” of any municipality may petition the municipal clerk to hold an election to determine whether the municipality shall come under the provisions of the PUA. The petition must consist of at least 25% of the municipality’s legal votes for Governor in the last general election. Since this bill creates the authority as a political subdivision of the state and provides that the board of the authority shall not be elected, but shall consist of the mayor of Albuquerque, three Albuquerque city councilors and three Bernalillo County commissioners, it is not clear how the authority could come under the PUA pursuant to Section 62-6-5. If it is the desire to provide such an option to the voting public, it might be useful to include language in Section 26 (E) of the bill as follows: “For purposes of this section the election to come under the Public Utility Act shall be by petition and vote of the registered voters of Bernalillo County”. 

 

2) Companion bill is SB 438, which includes the Albuquerque Metropolitan Area Flood Control Authority (AMAFCA) as part of the new authority.

 

 

 

 

TECHNICAL ISSUES

 

1) The analysis of the Attorney General’s Office is neither a formal Attorney General’s Opinion nor an Attorney General’s Advisory Opinion letter.  The analysis is a staff analysis in response to the legislature’s request.

 

2) According to the Attorney General’s Office analysis, if any statutory sections amended by this bill are also amended by another bill or bills, the bill last signed by the Governor may be the only one that will be considered a valid law.  See State v. Smith, Ct.App. No.s 24,253, 24,254 and 24,258 (filed 1/12/04), pet. for cert. pending.

 

3) The State Engineer suggests the legislature should consider an amendment explicitly stating that the authority must comply with Chapter 72, known as the New Mexico Water Code, to change the point of diversion, or place or purpose of use of a water right.  Section 7(C), page 8, lines 13 through 25, and page 9, lines 1 and 2, could be amended as follows to accomplish this:   

 

C.        The Authority, within and without the Bernalillo county boundary, may:

(1)        acquire, contract for or condemn:

(a)        springs;

(b)        wells;

(c)        water rights;

(d)        other water supplies;

(e)        right of way or other necessary ownership for the acquisition of water facilities;

(2)        acquire, maintain, contract for or condemn for use privately owned water facilities used or to be used for the furnishing and supply of water; and

(3)   change the place point of diversion, or the place or purpose of use of any water right to any place selected by the authority in order to make the water available to the authority.  Such changes shall comply with all applicable provisions of the state’s Water Code, set forth in Chapter 72, including but not limited to sections 72-5-1, 72-5-22, 72-5-23, 72-5-24, 72-12-3 and 72-12-7 NMSA 1978. 

 

OTHER SUBSTANTIVE ISSUES

 

The DFA analysis notes it may be important to require the Albuquerque-Bernalillo County Water Utility Authority adhere to the growth and land use policies set forth in the Albuquerque-Bernalillo County Comprehensive Plan, Focus 2050 Plan, and the Planned Growth Strategy.

 

Regional delivery of services has become a more accepted method of responding to problems that transcend jurisdictional lines.  Tackling regional problems such as the use of land and infrastructure financing are best addressed in a coordinated and consistent manner.  According to DFA, the bill fails to address the effects the new Authority will have on the location of new water infrastructure on the facilitation of growth and development, especially on Albuquerque’s western edge.  Nor does the bill address state obligations for delivery of water to Texas, which may be made even problematic should the Middle Rio Grande area not be covered by the state’s general laws.

 

 

DG/yr:dm