NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

The LFC is only preparing FIRs on bills referred to the Senate Finance Committee, the Senate Ways and Means Committee, the House Appropriations and Finance Committee and the House Taxation and Revenue Committee. The chief clerks are responsible for preparing and issuing all other bill analyses.

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(Parenthesis ( ) Indicate Expenditure Decreases)

(Parenthesis ( ) Indicate Revenue Decreases)

Duplicates/Conflicts with/Companion to/Relates to

SOURCES OF INFORMATION

LFC Files

Office of the State Engineer

SUMMARY

Synopsis of Bill

Senate Bill 537 would create a new statute, the Water Well Drillers Licensing Act, and a new seven-member board, the Water Well Drillers Advisory Board, which would be administratively attached to the Office of the State Engineer. The State Engineer would serve as the chairman of the board.

Significant Issues

Existing statutes place the authority to license and regulate water well drillers with the Office of the State Engineer. Senate Bill 537 would not remove that authority from the State Engineer.

According to the State Engineer, New Mexico's standards for drillers are deficiently low in comparison to other western states. Currently, the State Engineer has licensed 368 drillers, where 78 are from out of state. Though rare, the department has received information about water well drillers, who have not been licensed, who work in the state. Significant public health and safety concerns surround this practice. The bill would essentially add stricter requirements for licensure, would increase the license fees, and would create the advisory board.

The advisory board would only serve the function as "advisor" to the State Engineer, and would have no rulemaking authority, which is unusual for boards positioned similarly throughout state government. One additional issue, which is unusual, is the provision that the State Engineer would appoint the members of the advisory board. Normal protocol is that the Governor is afforded the statutory responsibility for appointing board or commission members throughout state government.

FISCAL IMPLICATIONS

Senate Bill 537 does not contain an appropriation. The bill does indicate that board members would be reimbursed for per diem and mileage for approved board meetings. However, the bill does not define the number of meetings that must occur, therefore, the fiscal impact for board in-state travel is unknown. Most boards of this size spend approximately $10.0 annually.

Regarding revenue, the department currently collects approximately $10.0 for its 368 water well drillers. The new fee structure would increase that amount to approximately $45.0, which is general fund. According to the State Engineer, the bill would decrease the number of licensees simply due to the increased requirements, but, the revenue would continue to be substantially higher than the current revenue.

CONFLICT/DUPLICATION/COMPANIONSHIP/RELATIONSHIP

Senate Bill 537 conflicts with existing statutes Section 72-12-12 through 72-12-15.

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