SB0243

SENATE BILL 243

54th legislature - STATE OF NEW MEXICO - second session, 2020

INTRODUCED BY

Gabriel Ramos and John Arthur Smith

AN ACT

RELATING TO WATER; CREATING THE NEW MEXICO CENTRAL ARIZONA PROJECT ENTITY AS A POLITICAL SUBDIVISION OF THE STATE; PROVIDING POWERS AND DUTIES; PROVIDING BONDING AUTHORITY; REQUIRING THE TRANSFER OF ASSETS RELATING TO THE NEW MEXICO UNIT; MAKING AN APPROPRIATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. [NEW MATERIAL] SHORT TITLE.--This act may be cited as the "New Mexico Central Arizona Project Entity Act".

SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the New Mexico Central Arizona Project Entity Act:

A. "Arizona Water Settlements Act water" means the water made available pursuant to Section 304(f)(1) of the federal Colorado River Basin Project Act as amended by Section 212(d)(1) of the federal Arizona Water Settlements Act;

B. "board" means the governing board of the entity;

C. "entity" means the New Mexico central Arizona project entity created pursuant to the New Mexico Central Arizona Project Entity Act;

D. "joint powers agreement" means the agreement that was entered into between the interstate stream commission, Upper Gila irrigation association, Fort West irrigation association, Gila Farm irrigation association, Gila Hot Springs irrigation association, Catron county, Grant county, Luna county, village of Santa Clara, Hidalgo soil and water conservation district, Hidalgo county, city of Deming, San Francisco soil and water conservation district and city of Lordsburg and went into effect on July 27, 2015, as subsequently amended, to create the New Mexico central Arizona project entity to implement the New Mexico unit agreement;

E. "New Mexico unit" means the unit or units of the central Arizona project to be designed, constructed, operated and maintained in New Mexico to consumptively use water from the Gila and San Francisco rivers pursuant to Section 301(a)(4) and 304 of the federal Colorado River Basin Project Act and Section 212 of the federal Arizona Water Settlements Act;

F. "New Mexico unit agreement" means the agreement entered into on November 23, 2015 by and between the secretary and the New Mexico central Arizona project entity created by the joint powers agreement to effectuate the terms of the federal Arizona Water Settlements Act and the New Mexico Consumptive Use and Forbearance Agreement ratified by the federal Arizona Water Settlements Act; and

G. "secretary" means the secretary of the United States department of the interior.

SECTION 3. [NEW MATERIAL] NEW MEXICO CENTRAL ARIZONA PROJECT ENTITY--CREATED.--

A. The "New Mexico central Arizona project entity" is created coextensive with the boundaries of Catron, Hidalgo, Luna and Grant counties to:

(1) plan, design, build, operate and maintain the New Mexico unit; provided that:

(a) as set out in Section 212(c)(3) and (4) of the federal Arizona Water Settlements Act and in the New Mexico Consumptive Use and Forbearance Agreement, the secretary shall not transfer to the entity the authority to divert water; and

(b) the secretary shall remain responsible to the parties to the New Mexico Consumptive Use and Forbearance Agreement for the entity's compliance with the terms and conditions of the New Mexico Consumptive Use and Forbearance Agreement;

(2) supply Arizona Water Settlements Act water for agricultural, municipal, commercial, industrial, mining, recreational or environmental purposes or any combination of these purposes within the boundaries of the entity;

(3) acquire, develop and provide infrastructure and other water rights determined by the board to be consistent with the purposes of the entity; and

(4) plan and develop water utilization projects to meet water supply demands in the southwestern planning region of New Mexico and to provide for the planning and development of water utilization or delivery enhancement projects that will improve quality of life and encourage economic development in an efficient and cost-effective manner.

B. The entity shall be the successor in interest to, and assume all rights and responsibilities of, the New Mexico central Arizona project entity that was created by the joint powers agreement.

SECTION 4. [NEW MATERIAL] MEMBERS--BOARD--APPOINTMENT--TERMS.--

A. The initial members of the entity are the following political subdivisions:

(1) Upper Gila irrigation association;

(2) Fort West irrigation association;

(3) Gila Farm irrigation association;

(4) Gila Hot Springs irrigation association;

(5) Catron county;

(6) Grant county;

(7) Luna county;

(8) village of Santa Clara;

(9) Hidalgo soil and water conservation district;

(10) Hidalgo county;

(11) city of Deming;

(12) San Francisco soil and water conservation district;

(13) city of Lordsburg;

(14) Grant soil and water conservation district; and

(15) interstate stream commission, as a nonvoting member.

B. Members of the entity shall be limited to political subdivisions of the state located entirely within Catron, Hidalgo, Luna or Grant county with the power to levy taxes or assessments and the interstate stream commission. Each member shall have one vote, except the interstate stream commission, which shall be a nonvoting member.

C. Each member of the entity shall appoint one representative to the board. Appointed representatives shall be members of the governing body of the political subdivision, public employees or residents or members of the political subdivision appointed in writing by the political subdivision. A representative shall serve a three-year term and may be reappointed after an initial term of service. A representative shall not represent more than one political subdivision.

D. Each political subdivision may appoint an alternate representative, who shall be a member of the governing body of the political subdivision, a public employee or a resident or member of the political subdivision and appointed in the same manner as the primary representative. An alternate representative may attend meetings of the board along with the primary representative, but shall not vote if the primary representative is present and able to vote. If a political subdivision's primary representative is absent or unable to vote, the alternate representative may vote on behalf of the political subdivision the alternate representative represents.

E. New members may be added to the entity by a two-thirds' majority vote of the board following a written request of a political subdivision to become a member of the entity.

F. At the first meeting after enactment of the New Mexico Central Arizona Project Entity Act, the board shall select a chair, vice chair and secretary who shall serve for one year or until successors are elected and qualified.

SECTION 5. [NEW MATERIAL] ENTITY--POWERS--DUTIES.--

A. The entity is a body politic and corporate and a political subdivision of the state.

B. The entity shall:

(1) own and hold title to all portions of the New Mexico unit;

(2) be responsible for the planning and design of the New Mexico unit;

(3) upon transfer from the secretary, be responsible for the construction, operation, maintenance and replacement of the New Mexico unit;

(4) facilitate New Mexico users contracting with the secretary for Arizona Water Settlements Act water;

(5) provide for the management of the New Mexico unit for the benefit of the entity's members;

(6) comply with the provisions of the New Mexico Consumptive Use and Forbearance Agreement and the New Mexico unit agreement; and

(7) as the successor in interest to the New Mexico central Arizona project entity created by the joint powers agreement, comply with the provisions of contracts entered into by its predecessor in interest prior to the enactment of the New Mexico Central Arizona Project Entity Act.

C. The entity shall take all necessary steps to ensure the entity's financial viability, which may include:

(1) assessment of membership dues;

(2) assessment of user fees;

(3) management of revenues to pay the reasonable expenses of operation of the New Mexico unit and other expenses;

(4) establishment of a revolving fund for the purpose of defraying the costs and expenses of the entity;

(5) establishment of a capital fund for system improvements and replacements;

(6) application for grants, matching funds and other money that may be expended for any purpose consistent with the provisions of the New Mexico Central Arizona Project Entity Act;

(7) acceptance of grants, gifts or donations of money or other property from any source that may be expended for any purpose consistent with the provisions of the New Mexico Central Arizona Project Entity Act; and

(8) borrowing money and issuing revenue bonds.

D. The entity may:

(1) sue and be sued within the constraints of existing state and federal law;

(2) enter into contracts;

(3) contract with political subdivisions in the four southwest New Mexico counties for the operation and maintenance of portions of the New Mexico unit;

(4) acquire, dispose of or encumber real or personal property or any interest in them;

(5) be allowed a water use planning period not to exceed forty years;

(6) hold water rights based on a water development plan submitted to and approved by the state engineer, the implementation of which shall not exceed forty years;

(7) have and exercise the power of eminent domain in the manner provided by law for the condemnation of private property as the last resort for public use with just compensation. The entity shall not acquire water rights through eminent domain and shall not take any property unless it is necessary for rights of way, easements or the use or placement of facilities and infrastructure elements, including storage facilities, pipelines, structures, pump stations or related appurtenances; and

(8) have and exercise all rights and powers necessary or incidental to or implied from the specific powers granted in the New Mexico Central Arizona Project Entity Act.

SECTION 6. [NEW MATERIAL] BOARD--POWERS--DUTIES.--

A. All powers, privileges and duties vested in or imposed upon the entity shall be exercised and performed by the board.

B. The board shall:

(1) manage and conduct the affairs and business of the entity;

(2) make and execute all necessary contracts and other instruments, which shall be signed by the chair or, in the chair's absence, by another member of the board designated for that purpose;

(3) promulgate orders, resolutions, policies and rules necessary for the governance of the affairs of the entity and the execution of the powers vested in the entity;

(4) fix the time and place of meetings and the method of providing notice of the meetings in accordance with the Open Meetings Act;

(5) annually adopt an operating budget; and

(6) perform all acts necessary to carry out the purposes of the New Mexico Central Arizona Project Entity Act.

C. The board may by a simple majority:

(1) maintain offices at a place as the board may designate;

(2) delegate its powers by resolution to an officer or agent of the board;

(3) employ a director, who may employ and retain necessary staff;

(4) acquire real or personal property in amounts no greater than two thousand dollars ($2,000); and

(5) take all other actions as authorized by the rights and powers necessary or incidental to or implied from the specific powers granted in the New Mexico Central Arizona Project Entity Act.

D. The following actions by the board shall only be effective upon resolution passed by a two-thirds' majority approval of the members:

(1) establishment and collection of charges for water consistent with federal reclamation law and contracts entered into between the entity and the secretary pursuant to the New Mexico unit agreement;

(2) acquisition of real or personal property in excess of two thousand dollars ($2,000);

(3) issuance of revenue or refunding bonds; and

(4) initiation or continuation of legal action, except that initiation and filing of liens for unpaid rates and charges and suits for payment of unpaid rates and charges and discontinuance of service for failure to pay rates and charges may be delegated by a simple majority.

E. Meetings of the board shall be held on a regularly established schedule, or at the call of the chair or whenever six members shall so request in writing. The board shall not meet unless a quorum of the representatives is present. A majority of representatives then serving constitutes a quorum for the transaction of any business. Except as provided in Subsection D of this section, the affirmative vote of at least a majority of a quorum present is necessary for any action to be taken by the board. A vacancy in the membership of the board shall not impair the right of a quorum to exercise all rights and perform all duties of the board.

F. A representative having a financial interest or possible interest in the outcome of any policy, decision or determination before the board shall be disqualified from voting on the issue. A representative's or member's status as a customer of the entity shall not be deemed to constitute a financial interest or possible interest for the purposes of the New Mexico Central Arizona Project Entity Act.

SECTION 7. [NEW MATERIAL] TRANSFER OF ASSETS TO ENTITY.-- Within ninety days of the effective date of the New Mexico Central Arizona Project Entity Act:

A. the interstate stream commission, upon approval by the department of finance and administration, shall transfer to the entity title to any assets it may own related to the New Mexico unit;

B. the city of Deming shall transfer to the entity title to any assets it may own related to the New Mexico unit; and

C. any bonds that were issued on behalf of the New Mexico central Arizona project entity created by the joint powers agreement or any other debt assumed on behalf of the New Mexico central Arizona project entity created by the joint powers agreement by a party to the joint powers agreement, shall be transferred to the entity.

SECTION 8. [NEW MATERIAL] BONDING AUTHORITY.--

A. The entity may issue revenue bonds, the pledged revenue for which shall be the net revenues from the operation of the New Mexico unit, for any one or more of the purposes authorized by the New Mexico Central Arizona Project Entity Act.

B. The entity may pledge irrevocably any or all of the revenue received by the entity to the payment of the interest on and principal of revenue bonds for any of the purposes authorized in the New Mexico Central Arizona Project Entity Act.

C. Revenues in excess of the annual principal and interest due on revenue bonds secured by pledged revenue may be accumulated in a debt service reserve account. The entity may appoint a commercial bank trust department to act as paying agent or trustee of the revenues and to administer the payment of principal of and interest on the bonds.

D. Except as otherwise provided in the New Mexico Central Arizona Project Entity Act, revenue bonds:

(1) may have interest, principal value or any part thereof payable at intervals or at maturity as may be determined by the board;

(2) may be subject to a prior redemption at the entity's option at a time and upon terms and conditions, with or without the payment of a premium, as determined by the board;

(3) may mature at any time not exceeding thirty years after the date of issuance;

(4) may be serial in form and maturity, may consist of one bond payable at one time or in installments or may be in another form determined by the board;

(5) shall be sold for cash at, above or below par and at a price that results in a net effective interest rate that does not exceed the maximum permitted by the Public Securities Act and the Public Securities Short-Term Interest Rate Act; and

(6) may be sold at public or negotiated sale.

E. At a regular or special meeting, the board may adopt a resolution that:

(1) declares the necessity for issuing revenue bonds;

(2) authorizes the issuance of revenue bonds by an affirmative vote of two-thirds' majority approval of the members; and

(3) designates the sources of revenues to be pledged to the repayment of the revenue bonds.

SECTION 9. [NEW MATERIAL] REFUNDING BONDS.--

A. The entity may issue refunding bonds for the purpose of refinancing, paying and discharging all or any part of outstanding bonds for the:

(1) acceleration, deceleration or other modification of the payment of the outstanding bonds, including, without limitation, any capitalization of any interest thereon in arrears or about to become due for any period not exceeding two years from the date of the refunding bonds;

(2) purpose of reducing interest costs or effecting other economies; or

(3) purpose of modifying or eliminating restrictive contractual limitations:

(a) pertaining to the issuance of additional bonds; or

(b) concerning the outstanding bonds or facilities relating to the outstanding bonds.

B. The entity may pledge irrevocably for the payment of interest, principal and premium, if any, on refunding bonds the appropriate pledged revenues, which may be pledged to an original issue of bonds.

C. Refunding bonds may be issued separately or in combination in one series or more.

D. Refunding bonds shall be authorized by resolution. Bonds that are refunded shall be paid at maturity or on any permitted prior redemption date in the amounts, at the time and places and, if called prior to maturity, in accordance with any applicable notice provisions, all as provided in the proceedings authorizing the issuance of the refunded bonds or otherwise appertaining thereto, except for any such bond that is voluntarily surrendered for exchange or payment by the holder or owner.

E. The principal amount of the refunding bonds may exceed the principal amount of the refunded bonds and may also be less than or the same as the principal amount of the bonds being refunded if provision is duly and sufficiently made for the payment of the refunded bonds.

F. The proceeds of refunding bonds, including accrued interest and premiums appertaining to the sale of refunding bonds, shall be immediately applied to the retirement of the bonds being refunded or placed in escrow in a commercial bank or trust company that possesses and exercises trust powers and that is a member of the federal deposit insurance corporation. The proceeds shall be applied to the principal of, interest on and any prior redemption premium due in connection with the bonds being refunded; provided that the refunding bond proceeds, including accrued interest and premiums appertaining to a sale of refunding bonds, may be applied to the establishment and maintenance of a reserve fund and to the payment of expenses incidental to the refunding and the issuance of the refunding bonds, the interest on those bonds and the principal of those bonds, or both interest and principal as the board determines. This section does not require the establishment of an escrow if the refunded bonds and the amounts necessary to retire the refunded bonds within that time are deposited with the paying agent for the refunded bonds. Any such escrow shall not necessarily be limited to proceeds of refunding bonds but may include other money available for its purpose. Proceeds in escrow pending such use may be invested or reinvested in bills, certificates of indebtedness, notes or bonds that are direct obligations of, or the principal and interest of which obligations are unconditionally guaranteed by, the United States or in certificates of deposit of banks that are members of the federal deposit insurance corporation; provided that the par value of the certificates of deposit is collateralized by a pledge of obligations or by a pledge of payment that is unconditionally guaranteed by the United States; and further provided that the par value of those obligations is at least seventy-five percent of the par value of the certificates of deposit. Such proceeds and investments in escrow, together with any interest or other income to be derived from any such investment, shall be in an amount at all times sufficient as to principal, interest, any prior redemption premium due and any charges of the escrow agent payable therefrom to pay the bonds being refunded as they become due at their respective maturities or at any designated prior redemption date or dates in connection with which the board shall exercise a prior redemption option. A purchaser of a refunding bond issued is not responsible for the application of the proceeds by the entity or any of its officers, agents or employees.

G. Refunding bonds may bear additional terms and provisions as determined by the entity subject to the limitations in Section 8 of the New Mexico Central Arizona Project Entity Act relating to original bond issues.

H. Entity refunding bonds:

(1) may have interest, principal value or any part thereof payable at intervals or at maturity, as determined by the board;

(2) may be subject to prior redemption at the entity's option at a time or times and upon terms and conditions with or without payment of premium or premiums, as determined by the board;

(3) may be serial in form and maturity or may consist of a single bond payable in one or more installments or may be in another form, as determined by the board; and

(4) shall be exchanged for the bonds and any matured unpaid interest being refunded at not less than par or sold at public or negotiated sale at, above or below par and at a price that results in a net effective interest rate that does not exceed the maximum permitted by the Public Securities Act.

I. At a regular or special meeting, the board may adopt a resolution by a two-thirds' majority approval of the members to authorize the issuance of the refunding bonds.

SECTION 10. [NEW MATERIAL] EXEMPTION FROM TAXATION.--The bonds authorized by the New Mexico Central Arizona Project Entity Act and the income from the bonds shall be exempt from all taxation by the state or any political subdivision of the state.

SECTION 11. [NEW MATERIAL] BONDS NOT OBLIGATION OF THE STATE.--Except as otherwise provided in the New Mexico Central Arizona Project Entity Act, all bonds or other obligations issued pursuant to that act are payable solely from the revenues of the entity that may be pledged to the payment of such obligations, and the bonds or other obligations shall not create an obligation, debt or liability of the state or any other of its political subdivisions. No breach of any pledge, obligation or agreement of the entity shall impose a pecuniary liability or a charge upon the general credit or taxing power of the state or any other of its political subdivisions.

SECTION 12. APPROPRIATION.--Five hundred thousand dollars ($500,000) is appropriated from the New Mexico unit fund to the interstate stream commission for expenditure in fiscal years 2020 and 2021 for the operating costs of the New Mexico central Arizona project entity. Any unexpended or unencumbered balance remaining at the end of fiscal year 2021 shall revert to the New Mexico unit fund.