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

SPONSOR Lujan

DATE TYPED 3/10/05

HB HJM 49/aHENRC

SHORT TITLE San Juan-Chama Water Agreement Changes

SB

ANALYST Aguilar

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

New Mexico Environment Department (NMED)

Office of the State Engineer (OSE)

SUMMARY

Synopsis of HENRC Amendment

The House Energy and Natural Resources Committee amendment to House Joint Memorial 49

makes technical corrections to language, identifies that 2,990 acre feet of San Juan-Chama water

remain to be contracted for, adds support for entities that have water service agreements and can

demonstrate a need within 40 years and adds support that the 2990 acre feet be protected from

allocation for purposes that do not fulfill the purpose of the San Juan-Chama project.

Synopsis of Original Bill

House Joint Memorial 49 establishes the Legislature’s support for having the U.S. Department of

the Interior to convert the remaining San Juan-Chama Project term water service agreements be-

tween the Department of the Interior and various municipal and quasi-municipal entities to re-

payment perpetual agreements.

House Joint Memorial 49 -- Page 2

Significant Issues

HJM 49 would provide consistency among all of the San Juan-Chama Project contractors, as

some entities currently have term water service agreements while others have repayment perpet-

ual agreements.

Water service agreements provide for water service to the contractor for a period limited to 40

years or less at rates sufficient to cover an appropriate share of the annual operations and mainte-

nance costs of the project and some amount of the fixed costs of the project as determined by the

Secretary of the Interior.

Repayment agreements are structured toward recovering over a period not to exceed 40 years the

portion of the construction costs of the project allocated to the contractor’s water supply. Re-

payment perpetual agreements would provide a higher level of stability than term water service

agreements. The repayment contracts would be advantageous given proposed multi-municipal

projects such as an Espanola-water filtration facility and the Buckman Surface Water Diversion

project that rely on San Juan Chama Project Water continuing to be available .

PERFORMANCE IMPLICATIONS

New Mexico Interstate Stream Commission (ISC) staff has consulted with both the entities and

the US Bureau of Reclamation on the possibility of converting the water service agreements to

perpetual repayment contracts. ISC staff has been supportive of the conversion of the agree-

ments from term water service contracts to perpetual repayment contracts provided each of the

entities demonstrates a need for such guaranteed supplies. The City of Espanola and the City

and County of Santa Fe have shown such a need for guaranteed supplies in the amounts of their

current water service agreements due to water quality and water rights and supply issues.

PA/lg