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

Moore

DATE TYPED

1/22/04

HB

76

 

SHORT TITLE

Water Trust Fund Appropriation

SB

 

 

 

ANALYST

Maloy

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY04

FY05

FY04

FY05

$150,000.0

 

 

 

Non-Recurring

General Fund

 

 

 

 

 

 

(Parenthesis ( ) Indicate Expenditure Decreases)

 

SOURCES OF INFORMATION

 

LFC Files

 

Responses Received From

Office of the State Engineer

New Mexico Finance Authority (NMFA)

 

SUMMARY

 

Synopsis of Bill

 

House Bill 76 appropriates $150 million from the general fund to the Water Trust Fund for the purposes of the Water Project Finance Act.  Any unexpended or unencumbered balance remaining at the end of FY04 shall not revert to the general fund. The bill contains an emergency clause.

 

Significant Issues

 

The State Engineer reports it may be more effective to:

 

  • Appropriate the money to the Water Project Fund.

 

  • Delete the requirement that funds be expended in FY04.

 

According to the State Engineer and the NMFA, the Water Trust Board oversees the Water Project Fund that had over $500 million in requests in 2003, and estimates that the state has over $2.5 billion in water project needs. Therefore, it might be better to appropriate the money to the Water Project Fund.

 

In addition, projects that meet the requirements of the Act may not be ready for financing during FY04.  It would be better to appropriate the money to the Water Project Fund for purposes of the Act, but without the requirement that funds be expended in FY04.

 

FISCAL IMPLICATIONS

 

The bill appropriates $150 million from the general fund to the Water Trust Fund for the purposes of the Water Project Finance Act.  Any unexpended or unencumbered balance remaining at the end of FY04 shall not revert to the general fund. The bill contains an emergency clause.

 

According to the State Engineer and the NMFA, the Water Trust Fund shall be invested by the State Investment Officer and earnings from the Fund shall be credited the Fund.  Section 72-4A-8 states that on July 1 of each fiscal year, annual distributions will be made from the Water Trust Fund to the Water Project Fund in the amount of $4 million until the amount is less than an amount equal to four and seven-tenths percent of the average of the year-end market values of the Water Trust Fund for the immediately preceding five calendar years.  Thereafter, the amount of the annual distribution shall be four and seven tenths percent of the average of the year-end market values of the Water Trust Fund for the immediate preceding five calendar years.

 

 

ADMINISTRATIVE IMPLICATIONS

 

The NMFA administers the Water Trust Fund, Water Project Fund and Water Trust Board.

 

AMENDMENTS

 

The State Engineer suggests deleting Section 1 and inserting in lieu thereof:

 

            Section 1.  APPROPRIATION.--   One hundred and fifty million dollars ($150,000,000) is appropriated from the general fund to the water project fund for purposes of the Water Project Finance Act.  Any unexpended or unencumbered balance remaining at the end of fiscal year 2004 shall not revert to the general fund.

           

SJM/lg