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

SPONSOR Campos

ORIGINAL DATE

LAST UPDATED

1-22-07

2-4-07 HB 38/aHAGC

SHORT TITLE Fort Sumner Irrigation District Debt Payment

SB

ANALYST Woods

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

925.0

Non-Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Finance and Administration (DFA)

Office of the State Engineer (OSE)

SUMMARY

Synopsis of HAGC Amendment

House Agriculture and Water Resources Committee amendment to House Bill 38 amends the

legislation to reflect the following language:

1. On page 1, lines 15 and 16, strike “One million two hundred thousand dollars

($1,200,000)" and insert in lieu thereof “Nine hundred twenty five thousand dollars

($925,000)".

Synopsis of Original Bill

House Bill 38 – Making an appropriation to pay the debt of the Fort Sumner Irrigation District to

the Federal Bureau of Reclamation – seeks to appropriate $1,200,000 from the general fund to

the Interstate Stream Commission for expenditure in fiscal year 2008 to pay the outstanding debt

of the Fort Sumner Irrigation District to the Federal Bureau of Reclamation. Any unexpended or

unencumbered balance remaining at the end of fiscal year 2008 shall revert to the general fund.

House Bill 38/aHAGC – Page

2

SIGNIFICANT ISSUES

Both the Office of the State Engineer (OSE) and the Department of Finance and Administration

(DFA) suggest that this appropriation would provide the Fort Sumner Irrigation District (FSID)

with funds to eliminate outstanding debt on a water facility within the district built and owned by

the federal Bureau of Reclamation. Further, that it could put the irrigation district in a position

where it might be able to request and assume ownership, and therefore operational control over,

the facility.

However, OSE notes that even if Fort Sumner Irrigation District’s debt to the US Bureau of

Reclamation is retired, title and control of the project will not revert to the Ft. Sumner Irrigation

District except through an act of Congress, and the project, and Ft. Sumner Irrigation District,

would remain subject to the same federal environmental mandates and constraints as currently

exist. Moreover, because an act of Congress is required to transfer the title and because such

Congressional transfers have historically occurred slowly, the federal nexus threat will likely

exist for sometime in the future.

TECHNICAL ISSUES

DFA suggests that, under modified accrual accounting (Section 6-5-10(A) NMSA 1978),

reversion language should read: “Any unreserved undesignated balance remaining at the end of

fiscal year _____ shall revert to the general fund." Using language that includes the term

“unencumbered" could unnecessarily extend spending authority beyond the designated fiscal

year and result in projects not being completed within the timeframe intended in the bill.

BW/mt