SENATE BILL 455
52nd legislature - STATE OF NEW MEXICO - first session, 2015
RELATING TO WATER; REQUIRING A REPORT TO THE LEGISLATIVE FINANCE COMMITTEE ON THE FINANCIAL VIABILITY AND PARTICULARS OF THE NEW MEXICO UNIT BEFORE EXECUTION OF THE NEW MEXICO UNIT AGREEMENT WITH THE SECRETARY OF THE UNITED STATES DEPARTMENT OF THE INTERIOR.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. TEMPORARY PROVISION--NEW MEXICO UNIT AGREEMENT--REPORT TO LEGISLATURE.--
A. The New Mexico CAP entity shall not enter into a contract or other agreement with the secretary of the United States department of the interior, or the secretary's duly authorized representative, to construct or develop on the Gila river a New Mexico unit of the central Arizona project until the interstate stream commission has presented a written report signed by the state engineer to the legislative finance committee and the committee has notified the New Mexico CAP entity that the committee finds that the report adequately addresses the requirements of Subsection B of this section.
B. The report required by Subsection A of this section shall be submitted to the legislative finance committee by November 1, 2015 and shall contain the following:
(1) a statement of the need for and purpose of the New Mexico unit;
(2) the proposed scope of design, locations and total estimated costs of designing, constructing, operating and maintaining the New Mexico unit;
(3) an accurate calculation using the best available engineering, hydrologic and geologic information of the average annual safe yield of water produced by the New Mexico unit, based on a fifty-year planning period, the cost per acre-foot of the water produced, and the estimated number of years when the project will produce little or no water;
(4) the identity of proposed end-users, the projected amount of water each end-user will reliably receive annually and the share of proposed construction and annual costs each end-user will be required to pay;
(5) the identity and composition of the proposed New Mexico CAP entity, a clear statement of the New Mexico CAP entity's duties, legal responsibilities and liabilities and a demonstration of the entity's technical capacity to execute these duties and responsibilities based upon factors such as having a certified project manager, ownership accountability, staffing and organization, revenue sufficiency, creditworthiness and fiscal management;
(6) the New Mexico CAP entity's plan for securing the financing necessary to complete the New Mexico unit, identifying all funding sources to be relied upon. This plan shall utilize the most recent yield and project cost calculations, consistent with requirements of the federal Arizona Water Settlements Act, Public Law 108-451, December 10, 2004, and should include, if applicable, financing methods for proposals to build the New Mexico unit in phases;
(7) a demonstration of the financial capability of the New Mexico CAP entity to pay the costs to design, build, operate and maintain the New Mexico unit, based upon standard financial metrics, such as the entity's bond rating or credit rating and debt service coverage ratio. The demonstration should include a detailed appraisal of the legal and financial rights, responsibilities and liabilities that will be incurred by the entity and each of its members, including revenue generation through any levy authority;
(8) a demonstration of the affordability of the water supplied by the New Mexico unit to end water users, including an analysis of projected water rate increases, rate comparisons to other water supply alternatives, including non-diversion proposals, and socioeconomic indicators for end-users;
(9) a statement of the role that the interstate stream commission will play, if any, in the design, construction, operation, financing and environmental analysis activities and oversight of the New Mexico unit and associated costs to carry out these functions; and
(10) a demonstration of adequate public participation in the federal Arizona Water Settlements Act planning process, including New Mexico unit engineering design, National-Environmental-Protection-Act-related studies and decisions relevant to signing the New Mexico unit agreement.
C. For the purposes of this section:
(1) "affordability" means the ability of water users to bear the costs of water supplied by the New Mexico unit without undue hardship;
(2) "average annual safe yield" means the annual mean of the minimum amount of water that can be produced by the New Mexico unit over the fifty-year planning period of the project;
(3) "financial capability" means the ability of the New Mexico CAP entity to pay the construction and annual costs of the New Mexico unit, using standard analytical methods, such as the United States bureau of reclamation's Title XVI financial capability determination process;
(4) "New Mexico CAP entity" means the entity or entities to be formed or designated by New Mexico to enter into the New Mexico unit agreement for the design, construction or development, operation and maintenance of the New Mexico unit;
(5) "New Mexico unit" means the facilities constructed or developed to consumptively use water from the Gila river or San Francisco river and that are identified as a unit of the central Arizona project authorized by Sections 301(a)(4) and 304 of the federal Colorado River Basin Project Act, as amended by Section 212 of the federal Arizona Water Settlements Act, Public Law 108-451, December 10, 2004; and
(6) "New Mexico unit agreement" means the agreement between the New Mexico CAP entity and the secretary of the United States department of the interior governing the construction, ownership and operation of the New Mexico unit and related terms and conditions that the secretary is required to enter into at the request of the New Mexico CAP entity.
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