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

SPONSOR Griego

ORIGINAL DATE

LAST UPDATED

2-7-06

HB

SHORT TITLE Acequia Restoration and Rehabilitation Fund

SB 706

ANALYST Woods

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

NFI

$250.0

Non-Recurring

General

(Parenthesis ( ) Indicate Expenditure Decreases)

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

FY08

$250.0

Non-Recurring Acequia Restoration and

Rehabilitation Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Finance and Administration (DFA)

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

SUMMARY

Synopsis of Bill

Senate Bill 706, which relates to water, created the acequia restoration and rehabilitation fund,

and makes an appropriation. Specifically the legislation seeks the following:

Section 1. ACEQUIA RESTORATION AND REHABILITATION FUND.--The "acequia

restoration and rehabilitation fund" is created in the state treasury. The fund shall consist of

money appropriated, donated or otherwise accruing to the fund and income from invest-

ment of money in the fund. Balances in the fund at the end of a fiscal year shall not revert

Senate Bill 706 – Page

2

to any other fund. Money in the fund is appropriated to the interstate stream commission,

which shall administer the fund in consultation with the acequia commission and the New

Mexico acequia association, for investigations, studies, designs, planning, environmental

compliance and construction of facilities to restore or rehabilitate acequias and community

ditches and to pay for administrative costs of the fund. Money in the fund shall be dis-

bursed on warrants signed by the secretary of finance and administration pursuant to

vouchers signed by the chair of the interstate stream commission or the chair's designee.

Section 2. APPROPRIATION.--Two hundred fifty thousand dollars ($250,000) is appro-

priated from the general fund to the acequia restoration and rehabilitation fund for expendi-

ture in fiscal year 2007 and subsequent fiscal years to carry out the purposes of the acequia

restoration and rehabilitation fund. Any unexpended or unencumbered balance remaining

at the end of a fiscal year shall not revert.

FISCAL IMPLICATIONS

The Office of the State Engineer, Interstate Stream Commission (OSE) indicates that the acequia

restoration and rehabilitation fund, if properly supported, would negate the need for most capital

outlays for repair and restoration of acequias in New Mexico.

The Department of Finance and Administration (DFA) adds that this legislation will bring to-

gether the Interstate Stream Commission, which is asked to consult with the State Acequia

Commission, plus the nonprofit State Acequia Association on administering the Acequia Resto-

ration and Rehabilitation Fund, and will disburses funds on warrants signed by the DFA secre-

tary, based on vouchers issued by the Interstate Stream Commission chair.

SIGNIFICANT ISSUES

OSE notes that the Interstate Stream Commission (ISC) administers the ISC Acequia Construc-

tion Program, involving grants and loans to acequias for the restoration and rehabilitation of

acequias. The bulk of funds loaned or granted by the ISC are leveraged 3 to 1 with federal dol-

lars. The bulk of capital outlays for acequias are also eligible and used in federal cost share pro-

grams through the ISC Acequia Construction Program.

OSE predicts that the legislation would streamline both the capital outlay and Acequia Construc-

tion program process and implement the consultation obligations of the NM Acequia Commis-

sion set out in NMSA 1978, § 73-2-66, which directs the Commission to “provide advice and

assist the governor, legislature, office of the state engineer and interstate stream commission and

the United States army corps of engineers in establishing acequia and community ditch rehabili-

tation priorities…”

OSE concludes that this legislation should make the funding of acequia capital projects

smoother, quicker, and more focused on critical needs.

PERFORMANCE IMPLICATIONS

OSE notes that the ISC will essentially assume the additional workload currently borne by the

legislative capital outlay committees in relation to acequia capital outlays.

Senate Bill 706 – Page

3

ADMINISTRATIVE IMPLICATIONS

OSE suggests that the ISC would need one additional full FTE staff to provide the necessary ser-

vices.

TECHNICAL ISSUES

OSE indicates that the “shall not revert” clause in section 2 should be amended to specify that

the monies shall not revert to the general fund. [See proposed amendment below]

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL.

DFA notes that there will continue to be no system nor dedicated funds to effectively respond to

acequia ditch repair needs.

AMENDMENTS

OSE suggests the following amendment: On page 2, line 13, after the word “revert” insert “to the

general fund”.

BW/mt