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committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports
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F I S C A L I M P A C T R E P O R T
SPONSOR Crook
DATE TYPED 3/10/05 HB 271/aHENRC/aSCONC/aSFC
SHORT TITLE NMFA Water Project Fund Projects
SB
ANALYST Kehoe
APPROPRIATION
Appropriation Contained Estimated Additional Impact Recurring
or Non-Rec
Fund
Affected
FY05
FY06
FY05
FY06
NFI
(See Fiscal Impact
Narrative)
(Parenthesis ( ) Indicate Expenditure Decreases)
Relates to House Bill 139, Senate Bill 132, Senate Bill 186, and Senate Bill 239
SOURCES OF INFORMATION
LFC Files
Responses Received From
New Mexico Finance Authority (NMFA)
New Mexico Environment Department (ED)
SUMMARY
Synopsis of SFC Amendment
The Senate Finance Committee amendments provide the following:
Items 1 and 2, strike all House Energy and Natural Resources Committee amendments and all
Senate Conservation Committee amendments.
Items 3, 8, and 10 are grammatical corrections.
Item 4, expands the authorization to the Cuatro Villas Mutual Domestic Water Users Association
in Santa Fe County or the Greater Chimayo Mutual Domestic Water Users Association in Rio
Arriba County to include other entities consisting of water users from either of the associations
and requires approval by the Water Trust Board.
Items 5 and 6, authorizes NMFA to make a grant or loan from the water project fund to the City
of Gallup and the Navajo Nation for a water project and clarifies the water project shall be for
pg_0002
House Bill 271/aHENRC/aSCONC/aSFC -- Page 2
communities served by the Navajo-Gallup water project.
Item 7, changes the City of Las Vegas wastewater project to water projects.
Item 9, changes the Town of Taos wastewater project to a water project.
Item 11, authorizes NMFA to make loans and grants from the water project fund to and an addi-
tional 9 qualified entities for water projects
Synopsis of SCONC Amendment
The Senate Conservation Committee amendments authorize the New Mexico Finance Authority
to make loans or grants from the water project fund to the following entities: 1) to Santa Fe
County for Pojoaque Valley water and wastewater projects; 2) to the City of Sunland Park in
Dona Ana County for water and wastewater projects; 3) to the Village of Chama in Rio Arriba
County for water and wastewater projects; 4) to the El Prado Water and Sanitation District in
Taos County for water and wastewater projects; and 4) to the Office of the State Engineer for the
Elephant Butte channel extension and maintenance project. The amendment makes technical
corrections to the bill.
Synopsis of HENRC Amendment
The House Energy and Natural Resources Committee amendments provide as follows:
Item 1, clarifies that NMFA is authorized to make a loan or grant to either or the Cuatro Villas
Mutual Domestic Water Users Association in Santa Fe County or the Greater Chimayo Mutual
Domestic Water Users Association in Rio Arriba County.
Item 2, expands the authorization to the Cuatro Villas Mutual Domestic Water Users Association
in Santa Fe County or the Greater Chimayo Mutual Domestic Water Users Association in Rio
Arriba County to include other entities consisting of water users from either of the associations
and requires approval by the Water Trust Board.
Item 3, is a grammatical correction.
Item 4, changes the Town of Taos project from a wastewater project to a water project.
Item 5, authorizes NMFA to make a loan or grant from the water project fund to the Ute Creek
Soil and Water Conservation District in Harding county for a watershed restoration and man-
agement project.
Synopsis of Original Bill
House Bill 271 authorizes NMFA to make loans and grants from the water project fund to 16
qualified entities for water projects.
Significant Issues
The 2001 Legislature created the Water Project Finance Act establishing a water trust board, wa-
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House Bill 271/aHENRC/aSCONC/aSFC -- Page 3
ter trust fund and water project fund for providing grants and loans to political subdivisions for
specific statewide regional water supply projects requiring legislative authorization. Laws of
2003 (Chapter 134) requires the Board of Finance to estimate by January 15 of each year the
available severance tax bond capacity and to authorize 10 percent of the capacity for deposit into
the water project fund to capitalize the fund for eligible projects. The senior severance tax ca-
pacity for this year totals $177.2 million which will yield $17.7 million into the water project
fund. Statute defines eligible projects as: 1) for the storage, conveyance or delivery of water to
end-users; 2) for the implementation of the Federal Endangered Species Act collaborative pro-
grams; 3) for the restoration and management of watersheds; 4) for flood control; or 5) for water
conservation.
The 16 projects recommended for legislative authorization within this bill have been reviewed
and evaluated by the Water Trust Board and are consistent with criteria established by statute.
The board consists of 15 members chaired by the state engineer or his designee.
FISCAL IMPLICATIONS
Laws 2003, Chapter 134, requires that by January 15 of each year, the Board of Finance Division
(BOF) of the Department of Finance and Administration estimate the amount of bonding capac-
ity available for severance tax bonds to be authorized by the legislature. BOF shall authorize 10
percent of the estimated bonding capacity each year, and the legislature further authorized BOF
to issue severance tax bonds in the annually deducted amount for use by the water trust board to
fund water projects statewide. Money from the severance tax bonds may not be used to pay indi-
rect projects costs. Any unexpended balance from proceeds of the bonds issued for a water pro-
ject shall revert to the severance tax bonding fund within six months of completion of the water
project. NMFA is responsible for monitoring and ensuring proper reversions.
All projects funded from the water project fund must be projects meeting statutory criteria and
reviewed and recommended to the Legislature by the Water Trust Board and NMFA for loan or
grant authorization.
ADMINISTRATIVE IMPLICATIONS
NMFA administers the water project fund and provides staff support to the Water Trust Board.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
House Bill 271 duplicates Senate Bill 186 in its entirety and relates to Senate Bills 132, 139, and
239.
Senate Bill 132 amends the Water Trust Board provisions to allow the executive director of
NMFA to name a designee to serve on the board in the director’s absence; eliminates creation of
the Drought Strike Task Force to avoid duplication of the Water Trust Board duties; allows do-
nations to the water project fund; and amends standards for prioritizing water projects by the
board.
House Bill 139 (HB 139) appropriates $100 million from the general fund to the water trust fund
for expenditure in fiscal years 2005 and 2006. Unexpended funds do not revert to the general
fund at the end of fiscal year 2006.
pg_0004
House Bill 271/aHENRC/aSCONC/aSFC -- Page 4
Senate Bill 239 makes technical changes to the membership of the Water Trust Board and re-
quires that 25 percent of all water project funds be expended for forest and watershed restoration
projects.
TECHNICAL ISSUES
NMFA offers the following amendments to House Bill 271 for the purposes of clarification and
to avoid conflicting claims on project funds:
1)
On page 2, line 15, insert the words “and/or” in lieu of the word “and”; and
2)
On page 2, line 17, following the word “counties”, insert the language “or another entity
which consists of water users from both of the aforementioned associations and which
have been approved by the water trust board.
OTHER SUBSTANTIVE ISSUES
The following statistics and graph prepared by NMFA depict the number of projects and dollar
value appropriated from the water project fund to date:
FY # Projects $ Amount
2002 5 $ 7.5 M
2003 14 10.0 M
2004 8 12.5 M
27 $30.0 M
LMK/sb
Appropriation History for Water Trust Board
$17,294,250
$22,783,521
$25,125,830
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
$45,000,000
FY2002
FY2003
FY2004
FY2005 (est.)
$12,500,000
$12,500,000
$10,000,000
$17,500,000
To date (FY2004), the state
investment of $35 million has
leveraged more than $40 million in
financing from the local entities. The
Water Trust Board estimates FY05
revenues will be matched with
local/federal contributions of $25
million.
State Appropriation
Local/Federal Contribution