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

SPONSOR Altamirano

ORIGINAL DATE

LAST UPDATED

2-11-06

HB

SHORT TITLE Create Salt Basin Water Development Fund

SB 662

ANALYST Woods

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

NFI

$100,000.0

Non-Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

REVENUE

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

FY08

$100,000.0

Non-Recurring

Salt Basin Water

Development Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

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

Senate Bill 662 seeks to establish a non-reverting "Salt Basin Water Development Fund" in the

state treasury to be administered by the Interstate Stream Commission and used to develop the

water resources of the salt basin in southern New Mexico. The bill also would appropriate

$100,000.0 to the fund, and any unexpended or unencumbered balance remaining at the end of a

fiscal year would not revert to the general fund.

Senate Bill 662 – Page

2

FISCAL IMPACT

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-Interstate Stream Commission (OSE) indicates that studies of

the water resources in the Salt Basin have been made utilizing small appropriations in recent

years. Preliminary estimates are that 50,000 to 75,000 acre-feet of water per year could be relia-

bly developed from the Salt Basin, or approximately as much water as the San Juan Chama Pro-

ject delivers. Some estimates are that the yield of the Salt Basin could be as much as 300,000

acre-feet per year.

The southern portions of the state are currently short of water. In the coming decades, the south-

ern portions of the state are expected to experience the state’s, if not the nation’s, highest growth

rates. The ISC has filed application to appropriate waters in the Salt Basin to provide for re-

gional needs as provided in NMSA 1978, § 72-14-44 (A). The ISC application was shortly fol-

lowed by competing applications from Texas entities that assert they have a prior right to this

New Mexico water.

The water in the Salt Basin primarily derives from mountain and basin recharge in New Mexico,

and then flows underground across the Texas-New Mexico border where Texas farmers pump it

for irrigation. The distances over which Salt Basin water would have to be conveyed are great.

Estimates range from $125 million to as high as $400 million to build the well fields and infra-

structure necessary to get the water to the New Mexico communities that need it.

OSE suggests that if New Mexico is to develop the Salt Basin waters in a cost efficient and com-

prehensive manner, studies are needed to firm estimates of the water quantity, quality, and distri-

butions in the Salt Basin. This bill would provide the necessary funding to complete those stud-

ies and to design and help construct the infrastructure needed deliver that water to New Mexico

water users.

OTHER SUBSTANTIVE ISSUES

The Department of Finance and Administration (DFA) indicates that a substantial underground

water resource exists in southern New Mexico of which the quality is quite good. However, the

challenge of developing this water is that it is distant from existing large-scale populations of

users that could use the water. It is estimated that it would cost several hundreds of millions to

pipe and pump the water from its source to potential New Mexico municipal users. Another pos-

sible use for the water would be to either negotiate to supply the water to Texas and/or Mexico in

lieu of Rio Grande water, which may not even require New Mexico to expend any money toward

infrastructure and development costs.

DFA further observes that Texas has also submitted a junior-positioned application to develop

this water for use in Texas. While this water does flow into Texas via aquifers, the fact that it

originates under New Mexico and that New Mexico filed an earlier application for rights to de-

Senate Bill 662 – Page

3

velop this water places New Mexico in primary position with regards to rights to develop this

water. It is unclear what activities of intent or commitment to follow through on its application, if

any, must be undertaken by New Mexico to retain senior claim to potential development of this

water.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Similar to HB131 and HB175.

MW/mt