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

SPONSOR Sanchez, M.

ORIGINAL DATE

LAST UPDATED

2-10-07

3-09-07 HB

SHORT TITLE State Engineer Permits for Subdivisions

SB 693/aSFl

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

N/A $190.0* $190.0* $380.0* Recurring General

Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

*OSE Projections

SOURCES OF INFORMATION

LFC Files

Responses Received From

Office of the State Engineer (OSE)

SUMMARY

Synopsis of SFl Amendment

The first amendment proposed by the Senate Floor reinstates previous language. The amendment

states that “before approving the final plat for a subdivision containing twenty or more parcels,

any one of which is two acres less in size, the board of county commissioners shall require that

the sub divider provide a copy of a permit obtained from the state engineer…"

Synopsis of Original Bill

Senate Bill 693 seeks to amend Section 47-6-11.2 NMSA 1978 (being Laws 1995, Chapter 212,

Section 13) to read as follows:

Senate Bill 693/aSFl – Page

2

47-6-11.2. WATER PERMIT REQUIRED FOR FINAL PLAT APPROVAL. Before

approving the final plat for a subdivision containing five or more parcels, any one of which

is two acres or less in size, the board of county commissioners shall require that the sub

divider provide a copy of a permit obtained from the state engineer, issued pursuant to

Section 72-5-1, 72-5-23 or 72-5-24 NMSA 1978, or if the subdivision is located within a

declared underground water basin, provide a copy of a permit obtained from the state

engineer issued pursuant to those sections or to Section 72-12-3 or 72-12-7 NMSA 1978

for the subdivision water use. In acting on the permit application, the state engineer shall

determine whether the amount of water permitted is sufficient in quantity to fulfill the

maximum annual water requirements of the subdivision, including water for indoor and

outdoor domestic uses. The board of county commissioners shall not approve the final plat

unless the state engineer has so issued a permit for the subdivision water use.

There is no appropriation attached to this legislation.

FISCAL IMPLICATIONS:

OSE anticipates this bill will add a workload of 2 FTEs at $90,000/FTE for a total of $180,000

per year; however, no in-depth cost analysis has been provided.

SIGNIFICANT ISSUES:

OSE opines that if Subsection B of the subdivision act is stricken and subsection A, as amended,

will remain as the operative language. This section of the subdivision act provides that the Board

of County Commissioners shall require water right permits from the state engineer for all

subdivisions containing five or more parcels, any one of which is two acres or less in size, prior

to final plat approval.

OSE notes that the subdivision act was substantially amended in the mid-1990s, with those

changes taking effect July 1, 1997. One of the changes was to allow counties the option of

approving final plats without having a state engineer water right permit in place. The water right

permitting process can be a lengthy and controversial process. If a water right application is

either protested, or if the applicant believes they have been aggrieved by the state engineer’s

permit, it is referred to the state engineer’s administrative hearing process. Once the state

engineer has rendered an order from that process, it can be taken up in district court and be

appealed ultimately to the Supreme Court.

By requiring counties to have state engineer permits in place at the time of final plat, OSE

suggests that there may be a substantial delay in final plat if a water right permit application is

either aggrieved or protested. Moreover, that, if enacted, domestic wells are not a water supply

option for any subdivisions containing five or more parcels, any one of which is two acres or less

in size.

PERFORMANCE IMPLICATIONS:

OSE indicates that the principal performance implication will be if there are new applications to

the state engineer. It appears that there is a requirement that subdivisions containing five or

more parcels, any one of which is two acres or less in size will be required to have water rights

Senate Bill 693/aSFl – Page

3

permit. Additionally, the statute change will likely limit the number of subdivisions the can have

domestic wells. This will increase the number of water right applications that will need to be

processed by the office of the state engineer, thereby affecting this agency’s ability to meet its

water rights processing performance measures.

ADMINISTRATIVE IMPLICATIONS:

OSE advises that the number of new water right applications is difficult to determine, and that

the effect of this statue will include an increased burden on the agency’s water right processing

functions, including hydrology, water use, conservation and subdivisions, water rights personnel,

administrative litigation and the hearing bureaus of the agency. The time to process applications

will increase and directly affect the timeliness the state engineer’s action on protested and

aggrieved permits, this resulting in the agency’s projected increase of 2 FTE.

OTHER SUBSTANTIVE ISSUES:

OSE further suggest that, if enacted, subdivision planning will have to provide for the filing of

water rights applications one or more years before the permits are needed for final plat approval.

BS/nt