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F I S C A L I M P A C T R E P O R T
SPONSOR Taylor
DATE TYPED 3/3/05
HB
SHORT TITLE Albuquerque-Bernalillo Water Authority Powers
SB 879/aSPAC
ANALYST Hadwiger
APPROPRIATION
(in $000s)
Appropriation Contained Estimated Additional Impact Recurring
or Non-Rec
Fund
Affected
FY05
FY06
FY05
FY06
NFI
(Parenthesis ( ) Indicate Expenditure Decreases)
Relates to HB859.
SOURCES OF INFORMATION
LFC Files
Responses Received From
Office of the Attorney General (AG)
Department of Finance and Administration (DFA)
Department of Environment (NMED)
Office of the State Engineer (OSE)
SUMMARY
Synopsis of SPAC Amendment
The SPAC amendment to Senate Bill 879 would make the Albuquerque-Bernalillo County Water
Utility Authority subject to Chapter 72 NMSA 1978 regarding any change to the point of diver-
sion or the place or purpose of use of any water right to any place selected by the authority in
order to make water available to the authority.
Synopsis of Original Bill
Senate Bill 879 proposes a substantial revision of Section 72-1-10 NMSA 1978 creating the Al-
buquerque-Bernalillo County Water Utility Authority. In particular, the bill would:
1.
Establish a process for allowing members of the board of directors to appoint substitutes
if they cannot attend a meeting;
2.
Set a one-year term for board members;
pg_0002
Senate Bill 879/aSPAC -- Page 2
3.
Have board members, except for the Albuquerque mayor or his designee, serve at the dis-
cretion of the Albuquerque City Council President (for members selected from the Coun-
cil) and at the discretion of the Bernalillo County Commission Chairman (for members
selected from the Commission);
4.
Enable the Authority to set policy, regulate and supervise the utility; to assume all powers
necessary to carry out and effectuate its public and corporate purposes; to use the city or
county procurement processes or to contract with the city or county to further its public
or corporate purposes; and to acquire, maintain, contract for, condemn or protect water or
wastewater facilities;
5.
Eliminate statutory language requiring that utility funds be held in one or more accounts
separate from other governmental accounts of the city or county;
6.
Allow the City of Albuquerque and Bernalillo County to delegate additional powers to
the Authority.
7.
Prohibit the Authority from acting so as to isolate and make nonviable any portion of wa-
ter or wastewater facilities within or outside Bernalillo County.
8.
Extend the Authority’s jurisdiction, for the purposes of acquiring, maintaining, contract-
ing for, condemning or protecting water and wastewater facilities, beyond the boundaries
of Bernalillo County to the territory physically occupied by the water and wastewater fa-
cilities and to privately owned water and wastewater facilities interconnected to the utility
system.
9.
Make the Authority subject to water rights limitations in Section 72-1-9 NMSA 1978 and
provisions of the Eminent Domain Code.
10.
Require the Authority to pay condemnees for the value of the water right as well as the
market value of real property to which the water right is appurtenant if the real property
has been in active agricultural operation and the condemnation of the water right requires
permanent retirement from agricultural operation of some or all of the real property.
11.
Exempt the Authority from jurisdiction of the Public Regulation Commission and provi-
sions of the Public Utility Act. The utility is granted a water use planning period not to
exceed 40 years.
12.
Allow the City or County to grant the Authority a franchise for the operation, construc-
tion and maintenance of the utility system and for the use and rental of rights of way in
exchange for a consideration.
13.
Authorize the Authority to issue revenue bonds and obligations pursuant to the Public
Securities Short-Term Interest Rate Act for acquiring real and personal property needed
for the utility system and for extending, enlarging, renovating, repairing or improving
water and wastewater facilities. The bill would also authorize the authority to issue reve-
nue anticipation notes with maturities not exceeding 13 months upon terms approved by
the Board. Revenue bonds could be payable at intervals or at maturity, and specifies other
conditions of bond issuance and redemption.
14.
Exempt the Authority’s bonds from state and local taxation.
15.
Exempt the Authority from statutes applying to municipal utilities that prohibit munici-
palities from acquiring a municipal utility from revenue bond funds without voter ap-
proval and without approval by the Public Utilities Commission (Public Regulation
Commission).
16.
As a temporary provision, transfer all functions, appropriations, money records, equip-
ment and other real and personal property pertaining to the Albuquerque water and
wastewater utility not transferred under previous statute to the Authority.
pg_0003
Senate Bill 879/aSPAC -- Page 3
Significant Issues
The Albuquerque Bernalillo County Water Utility Authority (Authority) was created in 2003,
through legislation codified in Section 72-1-10 NMSA. The amendments to Section 72-1-10 are
designed to transfer current municipal and county operating powers of the water and wastewater
utility to the ABWUA. Without the changes, the Authority may encounter difficulties operating
and maintaining the system. Even with the contemplated amendments, the Authority will still
lack some legal authority (e.g. home rule powers) previously used by the City to operate the wa-
ter and wastewater system. In general, the provisions of the bill extend powers already granted
to municipal water and wastewater utilities under statute to the Authority.
Eminent domain powers.
In general, the Authority would exercise eminent domain similar to that exercised by municipal
utilities under existing New Mexico statute. The following paragraphs compare the two:
SB879 would give specified condemnation powers to the Authority within and outside the
boundaries of Bernalillo County to the territory physically occupied by the by the water and
wastewater facilities and to privately owned water and wastewater facilities interconnected to the
utility system. The Authority could condemn wastewater facilities; private property for con-
struction, maintenance and operation of wastewater facilities; and privately owned water and
wastewater facilities used for the collection, treatment and disposal of wastewater of the author-
ity or its customers (all in Section 72-1-10F of SB879). Additionally, Albuquerque and Berna-
lillo County could delegate municipal condemnation powers for water rights, right-of-way or wa-
ter facilities, and privately owned water facilities used or to be used to supply water to a munici-
pality
Under current statute, a municipality may, within or without the municipality, condemn: private
property for construction, maintenance and operation of wastewater facilities; privately owned
sewer facilities used or to be used for the collection, treatment and disposal of sewage of the mu-
nicipality or its inhabitants; water rights and other water supplies, as well as right-of-way or wa-
ter facilities; and privately owned water facilities used or to be used to supply water to a munici-
pality or its inhabitants.
SB879 stipulates additional damages to agricultural interests for properties that may be taken out
of production due to a water condemnation.
Public Regulation Commission Oversight Exemption
Both SB879 and current statute exempt municipal authorities from the Public Utility Act.
SB879 specifies that the Authority is not subject to the jurisdiction of or approval from the Pub-
lic Regulation Commission (Section 72-1-10I). Current law, in Section 62-3-3E NMSA 1978,
specifies: “In the absence of voluntary election by a municipality to come within the provision
of the Public Utility Act, the municipality shall be expressly excluded from the operation of that
act…and no such municipality shall for any purpose be considered a public utility.”
pg_0004
Senate Bill 879/aSPAC -- Page 4
Voter Approval Exemption
Both SB879 and current statute exempt the Albuquerque water/wastewater utility from require-
ment for voter approval of utility revenue bonds. SB879 specified that the Authority is not sub-
ject to voter approval of utility revenue bonds. Existing statute (Section 3-23-2D) exempts mu-
nicipalities from voter approval of utility revenue bonds.
Application of Water Code
Both the AG and Office of the State Engineer (OSE) were concerned that the bill does not ex-
plicitly state that the Authority must comply with the Water Code in general and with regard to
changing the point of diversion or place and purpose of use of a water right that has been ac-
quired or condemned by the Authority.
SB879 defines the Authority to be a political subdivision of the state (Section 72-1-10A) similar
to counties and municipalities. Under current law (Sections 72-5-1 and 72-6-2 NMSA 1978),
Water Code provisions related to acquisition and leasing of water apply to the State of New
Mexico and its subdivisions. Proponents of SB879 indicate that, if there is any ambiguity about
this provision, they would support amending SB879 to clarify that the Water Code would apply
to the new Authority. The SPAC amendment explicitly references the applicability of Chapter
72 NMSA 1978, pursuant to a recommendation by the OSE with regard to the original bill.
Other Comments
NMED suggested that the membership of the Board of Directors should be expanded to include
members of the public that are representatives of water and wastewater users from within the
City of Albuquerque and Bernalillo County. NMED noted that the Authority may work to offer
small water systems the opportunity to consolidate and more readily address source water protec-
tion and water resource issues, while delivering safe drinking water to Bernalillo County.
The Office of the Attorney General offered the following concerns about this bill:
The amendments exempt the Authority from the jurisdiction of the Public Regulation
Commission and the Public Utility Act. As noted above, this provision is consistent with
current statute related to municipal utilities.
The bill grants the Authority the authority to, “acquire, maintain, contract for, condemn
or protect water and waste water facilities”. SB879 permits the Authority to extend its
jurisdiction for acquisition of water outside of Bernalillo County to territory physically
occupied by the water or interconnected to the utility system. This means that the juris-
diction of the Authority could reach as far as the New Mexico borders. As noted above,
this provision is consistent with current statute related to municipal utilities.
SB879 provides in Section 72-1-10(H), that if the Authority condemns water rights it will
only be liable for the value of the water rights as well as the market value of the real
property to which the water right is appurtenant if the real property has been in active ag-
ricultural operation. The amendments do not address what liability the Authority will
have for fallowed land or for real property that is utilizing its existing water rights for an
operation other than agricultural use.
pg_0005
Senate Bill 879/aSPAC -- Page 5
FISCAL IMPLICATIONS
To the degree that this bill would make the Authority a state agency, there might be requests
from the Authority for state support at some time in the future.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
Relates to HB859.
WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL.
Without some statutory changes, the Albuquerque-Bernalillo County Water Utility Authority
may encounter difficulties operating under the current structure.
DH/yr:rs