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

SPONSOR Balderas

ORIGINAL DATE

LAST UPDATED

2-1-06 HB 398

SHORT TITLE State Engineer Office in Northeastern NM

SB

ANALYST Woods

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

$300.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY06

FY07

FY08 3 Year Total

Cost

Recurring

or Non-Rec

Fund

Affected

Total

0.0

50.0

50.0 100.0 Recurring General Fund*

(Parenthesis ( ) Indicate Revenue Decreases)

* Source: Department of Finance and Administration

SOURCES OF INFORMATION

LFC Files

Responses Received From

Office of the State Engineer- Interstate Stream Commission (OSE)

Department of Finance and Administration (DFA)

SUMMARY

Synopsis of Bill

House Bill 398 makes an appropriation to the Office of the State Engineer for a field office in

northeastern New Mexico. Specifically the legislation seeks to appropriate $300,000 from the

general fund to the Office of the State Engineer for expenditure in fiscal year 2007 and subse-

quent fiscal years to provide for staff and associated operating costs for a field office in north-

eastern New Mexico. Any unexpended or unencumbered balance remaining at the end of a fiscal

year shall not revert to the general fund.

House Bill 398 – Page

2

FISCAL IMPLICATIONS

The Department of Finance and Administration (DFA) indicates that the overall cost of estab-

lishing an office with 3 FTE is likely to exceed the $300.0 recurring General Fund appropriated,

especially in the first year.

While DFA additionally notes that the northeast quadrant of the state does not currently have a

permanent OSE field office, currently residents interact with the OSE by telephone, fax, email or

by traveling to the Santa Fe office. Many of these interactions can take place without having to

travel to Santa Fe, including applying for a well permit. Accordingly, it is unclear what, if any,

services a field office would pro-vide that could not be accomplished from a distance.

DFA concludes by indicating that the executive recommendation does not include funding for a

permanent northeast New Mexico field office.

SIGNIFICANT ISSUES

The Office of the State Engineer (OSE) notes that this legislation appropriates funds to the State

Engineer for the purpose of establishing and maintaining a field office in northeastern New Mex-

ico for the purpose of administering water rights in the newly declared Clayton Underground

Water Basin, the newly extended Canadian Underground Water Basin, and surface water in

northeastern NM. Further, that this level of funding will allow the Office of the State Engineer

to provide continuing assistance to the residents of the area in the administration, distribution,

protection, conservation and development of surface and ground water resources through Active

Water Resource Management. Two underground water basins will be affected by establishing a

field office in the northeastern part of the state; the Clayton Basin and the Canadian Basin.

OSE adds that this bill establishes funding necessary to staff a field office under the control of

the District 6 Office located in Santa Fe. Establishing a State Engineer presence in the area will

further the Governor’s Active Water Resource Management initiative and will allow efficient

and effective management of both surface and ground water.

PERFORMANCE IMPLICATIONS

OSE indicates that the Water Rights Division (WRD) positions will be responsible for the

evaluation of water rights applications, including making determination on the validity of the wa-

ter rights and performing calculations by computer modeling to determine effects to both the sur-

face and ground water. In order to accomplish these tasks, the individuals in these positions will

have to conduct field inspections, conduct research and be skilled in expressing thoughts in writ-

ten format. These individuals will also be responsible in assisting the general public by answer-

ing questions related to water rights administration, determining the validity of water rights, tak-

ing enforcement actions, and assisting the public in the filing of water rights applications.

The WRD has had to use existing staff normally dedicated to the evaluation and processing of

water right applications from other district offices to answer and resolve water shortage problems

in the Northeastern part of the state. The office and FTE are required to address the anticipated

increased workload due to the recent State Engineer declaration of the two basins in that part of

the state. Currently the Clayton and Canadian basins are being administered by the Santa Fe

(District 6 Office).

House Bill 398 – Page

3

Declaration of the Clayton Basin and the extension to the existing Canadian Basin requires up to

4 additional full-time FTE’s to meet the immediate needs – an engineering supervisor who will

supervise the Cimarron Water Master (existing), two Engineer All Other – Operational’s and one

Clerical Support position. An office will be established at a central location that will best serve

the needs of the two basins and the Office of the State Engineer – likely either in Raton or in

Springer, NM.

ALTERNATIVES

The alternative to the passage of this bill is to continue to serve the Clayton and the Canadian

Underground Basins from the Santa Fe District Office.

BW/yr