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

SPONSOR Campos

DATE TYPED 1/27/2005 HB

SHORT TITLE Water Trust Board Members and Projects

SB 239

ANALYST Aguilar

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

NFI

Water Project

Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to: SB132, SB139, SB186 & HB271

SOURCES OF INFORMATION

LFC Files

Responses Received From

New Mexico Finance Authority (NMFA)

Energy, Minerals & Natural Resources department (EMNRD)

Office of the State Engineer (OSE)

SUMMARY

Synopsis of Bill

Senate Bill 239 makes technical corrections to the language which designates the members and

designees of the Water Trust Board (WTB).

SB 239 adds a sixteenth member to the WTB which would be “the executive director of the New

Mexico association of conservation districts or the executive director’s designee;”

SB 239 amends the existing statute to provide that: “Twenty-five percent of all water project

funds shall be dedicated to forest and watershed restoration projects.

Senate Bill 239 -- Page 2

Significant Issues

The current Water Project Finance Act defines the following five categories or types of projects

as being eligible for funding:

1.

the storage, conveyance or delivery of water to end-users;

2.

the implementation of Federal Endangered Species Act collaborative programs;

3.

the restoration and management of watersheds;

4.

flood control; and

5.

water conservation.

Annually, the WTB solicits applications for projects, screens the applications to ensure they meet

the requirements of one of the five categories, reviews and prioritizes the projects and submits

funding recommendations to the Legislature.

Projects funded are a result of this review and approval process which requires projects to stand

on their own merits. This method allows the WTB and the Legislature to adjust priorities as

needed to respond to current conditions and information.

The proposed amendment would establish that one of the five categories be allocated 25% of the

total funds available for any given year.

The NMFA notes there are many factors and circumstances which affect the urgency, priority

and effectiveness of water projects including: drought-related issues; changing atmospheric fac-

tors; drinking water problems for local communities (contamination, dwindling water basins,

costs of drilling deeper wells, etc.); water requirements for economic development projects and

new businesses; population growth; etc. Creating a statutory setaside of 25% for “forest and wa-

tershed restoration projects” would reduce the flexibility of the WTB and the Legislature in re-

sponding to changes in these factors and to new information and data that becomes available.

The addition of the executive director of the New Mexico association of conservation districts or

the executive director’s designee may be viewed as providing additional representation to an en-

tity already represented on the board. The association of conservation districts is currently repre-

sented by the New Mexico Department of Agriculture (NMDA).

FISCAL IMPLICATIONS

No significant impact on the aggregate funding available for water projects. However, there

could be a significant impact on how the aggregate funding would be allocated by category or

type of project each year.

This bill directs the WTB to allocate 25% of the available revenue to forest and watershed resto-

ration projects. Earmarking reduces the ability of the legislature to establish spending priorities.

Senate Bill 239 -- Page 3

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

SB 239 relates to SB 132 which amends the duties and approval process of the WTB.

SB 239 relates to SB 139 which appropriates $100 million to the Water Trust Fund for expendi-

tures in FY05 and FY06.

SB 239 relates to SB 186 & HB 271 (duplicates) which authorize the NMFA to make loans and

grants from the Water Project Fund to 16 qualified entities for eligible water projects.

TECHNICAL ISSUES

NMFA notes the proposed amendment would include forest restoration projects in category #3

along with watershed restoration projects.

PA/sb