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

SPONSOR Foley

ORIGINAL DATE

LAST UPDATED

1/29/07

HB 461

SHORT TITLE Lower Pecos River Water Rights

SB

ANALYST Woods

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

NFI

30,000.0

Non-Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Office of the State Engineer (OSE)

SUMMARY

Synopsis of Bill

House Bill 461 seeks to appropriate $30,000,000 from the general fund to the Interstate Stream

Commission for expenditure in fiscal years 2008 through 2010 to complete water rights

acquisitions and retirements pursuant to requirements of the lower Pecos river settlement in

Section 72-1-2.4 NMSA 1978. Any unexpended or unencumbered balance remaining at the end

of fiscal year 2010 shall revert to the general fund.

SIGNIFICANT ISSUES

OSE indicates that the Pecos River settlement is a historical agreement reached between the

Carlsbad Irrigation District, the Pecos Valley Artesian Conservancy District, the U.S. Bureau of

Reclamation and the State of New Mexico on March 25, 2003. The implementation of the

settlement would settle a longstanding water rights adjudication dispute between the Carlsbad

Irrigation District and the Pecos Valley Artesian Conservancy District. More importantly, it will

increase water supplies to Carlsbad Irrigation District, significantly reduce the threat of a priority

call in the Roswell Basin and it will put in place a mechanism for long-term compliance with the

Pecos River Compact and the U.S. Supreme Court Decree in Texas v. New Mexico.

House Bill 461 – Page

2

OSE estimates that the total costs for implementing the settlement is close to $100 million. This

would consist of acquiring 18,000 acres of farmland with appurtenant water rights and the

construction of well fields and pipelines to pump and deliver approximately 20,000 acre-feet per

year of Roswell Basin groundwater to the Pecos River. The legislature has so far appropriated

$66.5 million. An additional $3 million would allow the Interstate Stream Commission to

implement the minimum requirements of the settlement – acquisition of 12,000 acres of farmland

with appurtenant water rights and construction of well fields to pump up to 15,750 acre-feet per

year of groundwater to augment the Pecos River flow. Beyond the amounts needed to

implement the minimum requirements of the settlement, OSE indicates that a further

appropriation of $30 million is needed for the full implementation of the settlement.

OTHER SUBSTANTIVE ISSUES

OSE notes that the settlement is based on the parties’ assumption that the settlement will be

implemented in full. In order to achieve the benefits to all parties as represented during the

settlement negotiations, full implementation of the settlement is required. The Interstate Stream

Commission has already expended or encumbered nearly $50 million and significant progress

has been made. The requested $30 million is critical for the full implementation of the Pecos

river settlement.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

OSE states that, “The full benefit of the Pecos river settlement will not be achieved. There is

concern that the settlement parties may withdraw from the settlement if the state is unwilling to

fulfill its commitment."

AMENDMENTS

OSE suggests that on page 1, line 20, strike “retirements" and insert in lieu thereof “carry out

other projects as needed".

BFW/csd