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

SPONSOR Cervantes

DATE TYPED 03/05/05 HB 1070

SHORT TITLE Public Utility Ground Water Storage

SB

ANALYST Ford

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

Minimal – See

Narrative

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Environment Department (NMED)

Office of the State Engineer (OSE)

Public Regulation Commission (PRC)

SUMMARY

Synopsis of Bill

House Bill 1070 amends the Ground Water Storage and Recovery Act to include public utilities,

defined as an entity that may construct and operate a ground water storage and recovery project

pursuant to a permit from the State Engineer.

Significant Issues

For purposes of the bill, public utility is defined as a person not engaged solely in interstate busi-

ness that owns, operates, leases or controls a facility for storing or distributing to the public water

for manufacturing, municipal, domestic or other uses except agricultural irrigation, or a facility

for providing public sanitation sewer services.

The OSE writes: “Section 72-5A-3 NMSA 1978 was passed in 1999 and allowed governmental

entities to store surplus supplies of water underground and to recover it at a later date for the

governmental entity’s use. Governmental entities were defined as the interstate stream commis-

House Bill 1070 -- Page 2

sion, an Indian nation, tribe or pueblo, or a state political subdivision, including a municipality,

county, acequia, irrigation district, or conservation district. HB 1070 will allow entities, other

than governmental entities, that fall within the definition of public utilities to be eligible for

GWSR…

“…The number of applicants for GWSR projects would likely increase if the proposed language

is added. To date, no application has been filed with the Office of the State Engineer, although a

few municipalities have expressed interest and meetings have been held to discuss the applica-

tion and permitting process.”

Both the NMED and the OSE raise concerns about the inclusion of sanitary sewer facilities in the

Act. OSE notes that governmental entities and public utility water supply companies are ex-

pected to own and/or have water rights; however, the owner of a sanitary sewer facility would

not. The OSE writes that it is unaware of any demand that warrants inclusion of these facilities

in as GWSR entities.

NMED raises environmental concerns regarding the inclusion of sanitary sewer facilities, writ-

ing:

“The application of the Act to wastewater treatment plants substantially expands the scope of the

Act into activities administered by the NMED under the Water Quality Act. Discharges from

sewage wastewater treatment plants are discharges of water contaminants that have the potential

to pollute ground water. Discharges permits for these activities are required and issued pursuant

to the Water Quality Act for the protection of ground water quality and public health. This bill

creates potential conflicts with the Water Quality Act.

“Injection of wastes underground is also subject to the federal Underground Injection Control

(UIC) Program under the federal Safe Drinking Water Act. The state of New Mexico has pri-

macy for the UIC Program from the federal government for implementation of this program due

to the ground water protection rules issued by the state under the Water Quality Act and the Oil

and Gas Act. Any injection of such waste into underground aquifers would also need to apply to

all UIC regulations or the state primacy for this federal program could be jeopardized.”

FISCAL IMPLICATIONS

The bill may result in cost increases to the OSE to review additional applications for groundwa-

ter storage projects. OSE is unable to predict at this time whether it could absorb this increase

with existing staff or if additional FTEs may be necessary.

EF/lg