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

SPONSOR Jennings

ORIGINAL DATE

LAST UPDATED

2/5/06

HB

SHORT TITLE Pecos River Basin Land Management Fund

SB 611

ANALYST Hoffmann

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

None

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates House Bill 633.

Relates to House Bill 553.

SOURCES OF INFORMATION

LFC Files

Responses Received From

Office of the State Engineer (OSE)

Department of Finance and Administration, State Budget Division (DFA)

No Response From

State Treasurer’s Office (STO)

SUMMARY

Synopsis of Bill

Senate Bill 611 creates the “Pecos river basin land management fund.” The fund shall consist of

appropriations, grants, donations or bequests to the fund, all revenues from land purchased pur-

suant to Section 72-1-2.4 NMSA 1978. Money in the fund shall be invested pursuant to Chapter

6, Article 10 NMSA 1978. The Interstate Stream Commission shall adopt rules for managing the

land and to administer the fund, and money in the fund is appropriated to the Interstate Stream

Commission to manage the land pursuant to Section 72-1-2.4 NMSA 1978 and to manage well

fields in the lower Pecos river basin. Money in the fund shall not revert at the end of the fiscal

year. Disbursements shall be made on warrants signed by the Secretary of the Department of Fi-

nance and Administration pursuant to vouchers signed by the Director of the Interstate Stream

Commission.

Senate Bill 611 – Page

2

FISCAL IMPLICATIONS

This bill does not make any direct cash appropriations to the fund.

According to the Department of Finance and Administration, there is indeterminate revenue im-

pact because revenue flow into this fund would depend on future decisions regarding land

management, appropriations, etc.

This bill creates a new fund and provides for continuing appropriations. The LFC has concerns

with including continuing appropriation language in the statutory provisions for newly created

funds, as earmarking reduces the ability of the legislature to establish spending priorities.

SIGNIFICANT ISSUES

The Office of the State Engineer provided the information below.

As part of the Pecos Settlement, the Interstate Stream Commission is in the process of acquiring

18,000 acres of land with appurtenant water rights or rights to the delivery of water and con-

structing augmentation well fields with a capacity to pump up to 20,000 acre feet per year. The

management of the 18,000 acres of land would include payment of assessment fees where ap-

propriate and controlling weed growth. Wherever appropriate, the lands may be leased for graz-

ing or other uses to save cost of land maintenance. The estimated cost of assessment fees and

land maintenance is seven to eight hundred thousand dollars annually.

In addition, the operation and maintenance of the augmentation well fields is estimated to cost

another five to six hundred thousand dollars annually.

The fund created under this bill is intended to provide for the ongoing costs of the Pecos Settle-

ment implementation.

According to the Department of Finance and Administration, it is unclear what revenue potential

exists for the land partially because the appurtenant water rights would not be available for po-

tential users to use. As the water rights purchased pursuant to Section 72-2-2.4 NMSA 1978

grow so does the amount of land that the agency will have to manage. Appropriations made to

this fund could be used by the agency to manage these lands, but no appropriations to the fund

are known to be under consideration.

ADMINISTRATIVE IMPLICATIONS

The Department of Finance and Administration believes that the agencies involved have the ad-

ministrative capacity to create and manage this fund.

DUPLICATION AND RELATIONSHIP

House Bill 633 is a duplicate of this bill.

House Bill 553 appropriates $250,000,000 to the Office of the State Engineer for expenditure in

fiscal year 2007 and subsequent fiscal years to fund a comprehensive hydrographic survey of all

water resources in the Pecos river drainage basin.

Senate Bill 611 – Page

3

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL.

According to the Office of the State Engineer, the Interstate Stream Commission will have to re-

quest annual appropriations to cover land management and augmentation well field operations to

fulfill New Mexico’s obligations under the Pecos Settlement.

CH/yr