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(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to HB 455

SOURCES OF INFORMATION

Office of the State Engineer/Interstate Stream Commission (OSE/ISC)

SUMMARY

Synopsis of SCONC Substitute

The Senate Conservation Committee substitute for Senate Bill 512 differs from the original bill specifically in Section 3, paragraph D. where the definition of a "local water bank" is added and in Section 5, where language is added pertaining to "limited and exclusive operation by qualified administrators.

This section further specifies that the water bank shall operate only in areas within a declared ground basin or specified stream system where "all documents describing water rights exist in digital formats available in a database system in the office of the state engineer and on the internet."

Synopsis of Original Bill

Senate Bill 512 enacts the New Mexico Water Banking Act and establishes the Water Banking Fund with an initial $250.0 appropriation. The bill empowers the Interstate Stream Commission (ISC) with authority to operate and regulate the bank and to administer transfers from the bank. The bill exempts water stored in the bank from forfeiture.

Significant Issues

According to the ISC, the bill would usurp several statutory duties of the State Engineer regarding transfers and create statutory conflict between duties assigned to the ISC and the State Engineer. ISC believes the bill shifts the burden of impairment analysis involving transfers by the commission and places the State Engineer under unrealistic time constraints and creates administrative and technical burdens he cannot discharge at his current staff and funding levels. It also unlawfully makes him the expert witness for individual objectors.

FISCAL IMPLICATIONS

SB 512 appropriates $250.0 from the general fund to establish the Water Bank Fund and authorizes the ISC to assess administration and operation fees on transfers from the bank to defray ISC's costs. However, no funds are appropriated to the State Engineer to absorb costs, which will significantly increase under this bill.

ADMINISTRATIVE IMPLICATIONS

According to ISC, this bill will have a significant administrative impact on the State Engineer as it places major review responsibility under him without any provision of resources. The bill will also increase the duties of the ISC and require establishment of a full-time water banking director, although no FTE is authorized by this bill and no funds are proposed to be appropriated for his annual salary in the general appropriation act.

DUPLICATION/CONFLICT/COMPANIONSHIP/RELATIONSHIP

In the view of the agency, SB 512 conflicts with NMSA Section 72-5-22 to 72-5-24 and 72-12-3 and 72-12-7 as it authorizes the ISC to administer transferring water in the bank, which is the province of the State Engineer under the foregoing statutes. The bill also conflicts with SB 84/SCONCS by granting to the ISC regulatory authority over groundwater inspection which SB 84/SCONCS places in the State Engineer. SB 512 is related to HB 455.

TECHNICAL ISSUES

ISC believes the bill contains several instances where the language would establish conflicting statutory duties between the State Engineer and the ISC. Some examples of proposed changes include the following:

1. Section 2, page 3, lines 5-7: This language conflicts with the State Engineer's duties under Chapter 72, Articles 5 and 12 to administer water rights.

2. Section 4, page 5, line 15-16: The words "as authorized by the State Engineer" should be added at the end of the line to ensure statutory consistency.

3. Section 4, page 6, lines 16-21: This language should be struck as it conflicts with regulatory authority given the State Engineer under SB84/SCONCS.

RWP/gm