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

SPONSOR HAGC

ORIGINAL DATE

LAST UPDATED

3-6-07

HB 443/HAGCS

SHORT TITLE Water Conservation and Allowances

SB

ANALYST Woods

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

NFI

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)*

FY07

FY08

FY09 3 Year

Total Cost

Recurring

or Non-Rec

Fund

Affected

Total $0

$560.0

$560.0 $1,120.0 Recurring General

Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

*Office of the State Engineer estimates

Duplicate to SBCS461

SOURCES OF INFORMATION

LFC Files

Responses Received From

Office of the State Engineer (OSE)

SUMMARY

Synopsis of Bill

House Agriculture and Water Resources Committee

substitute for House Bill 443 seeks to amend

Section 72-5-18 NMSA 1978.

The Office of the State Engineer (OSE) indicates that the statute currently directs that, in the

issuance of permits to appropriate water or in the adjudication of the rights to use of water for

House Bill 443/HAGCS – Page

2

that purpose, the amount allowed shall be based on beneficial use and in accord with good

agricultural practices. Additionally, it directs the state engineer to issue permit in a manner

consistent with the above so as to prevent waste. Finally, the statute provides that improved

irrigation methods resulting in the conservation of water shall not affect an owner’s water rights.

Specifically, OSE notes:

•

The first new paragraph adds three parts to existing language. First, it adds agricultural

practices as an activity to be considered as potentially resulting in the conservation of

water. The second addition provides that conserved water shall not diminish the

beneficial use or other wise affect the owner’s water right. The third addition is a

statement adding that a quantity of appurtenant acreage should not be affected by the

aforementioned activities.

•

The second new paragraph essentially states that by demonstrating improved irrigation

or agricultural practices that result in the conservation of water, that such water may be

transferred to a new point of diversion, place, or purpose of use. It conditions these

transfers as follows:

1. The conserved water shall not result in impairment or diminishment of

other water rights; and

2. Priority and quality of right shall be assessed under the same standards as

apply to transfers.

FISCAL IMPLICATIONS:

OSE anticipates that, if enacted, the state engineer will be required to establish a procedure by

which the agricultural practices be evaluated to determine the amount of water conserved.

Further, at a minimum, each of the OSE’s six districts will require an FTE, and the OSE’s water

use bureau will require an FTE, “for a total of 7 FTEs and associated operation costs

($560.0/Year)."

SIGNIFICANT ISSUES:

OSE notes that the bill proposes: “Improved irrigation methods or agriculture practices resulting

in the conservation of water, which is a beneficial use, shall not affect an owner’s water rights or

quantity of appurtenant acreage." OSE interprets this to mean that if a farmer changes their on-

farm irrigation or agriculture practice, which results in a water savings; the saved water is

defined as a “beneficial use". This is contrary to the intention of the original statute, the

associated definition of beneficial use and constitutes a new appropriation of water. The bill also

allows for the transfer of the conserved water. OSE also adds the following observations:

•

The “beneficial use" of a water right is determined by calculating the water necessary

to grow a crop, less effective precipitation, and is generally referred to as consumptive

use.

•

Agricultural practices are evaluated to estimate the on-farm efficiency. On-farm

efficiency is dependent on the type of irrigation method and other factors.

House Bill 443/HAGCS – Page

3

•

The water allowance is then calculated by dividing the consumptive use by the on-farm

efficiency.

•

Consumptive use and on-farm efficiency are based on local area conditions and is not

established farm-by-farm. A local cropping pattern is evaluated to establish the

consumptive use and local irrigation practices are reviewed to determine on-farm

efficiency. This broad approach has been supported by the courts and is necessary for

the practical administration of water rights.

OSE concludes that, should this bill be enacted into law, the OSE will have a new administration

requirement when these applications are submitted for review. Additional personnel will be

required to ensure that these applications and subsequent monitoring demands are met. Further

that this will increase the number of water right applications that will need to be processed by the

OSE thereby affecting this agency’s ability to meet its water rights processing performance

measures.

OSE believes that it would be required to administer water rights on a farm-by-farm basis. This

new task would increase the already over burdened water rights administration process.

Additionally, the office of the state engineer would need to make farm-by-farm determinations to

ensure that any practices resulting in “saved water" do not change. This monitoring function is

not currently in existence in the office of the state engineer and will require new personnel.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP:

Duplicate to SBCS461

OTHER SUBSTANTIVE ISSUES:

OSE indicates that agriculture conservation has long been practiced in the State of New Mexico.

Modern advances in irrigation technology have provided significant improvements in the

efficiency of the transport of water from the point of diversion to meet the consumptive use of

the crop. It will take OSE resources to ensure that these new applications are appropriately

handled to ensure that these activities do not increase depletions within administrative basins.

BFW/nt