State of New Mexico House of Representatives FORTY-SECOND LEGISLATURE SECOND SESSION, 1996 February 12, 1996 Mr. Speaker: Your TAXATION AND REVENUE COMMITTEE, to whom has been referred HOUSE BILL 727, as amended has had it under consideration and reports same with recommendation that it DO PASS, amended as follows: 1. On page 1, between lines 16 and 17, insert the following new sections: "Section 1. Section 7-27-5 NMSA 1978 (being Laws 1983, Chapter 306, Section 7, as amended) is amended to read: "7-27-5. INVESTMENT OF SEVERANCE TAX PERMANENT FUND.--The severance tax permanent fund shall be invested for two general purposes, to provide income to the fund and to stimulate the economy of New Mexico, preferably on a continuing basis. The investments in Sections 7-27-5.1 and 7-27-5.6 NMSA 1978 shall be those intended to provide maximum income to the fund and shall be referred to as the market rate investments. The investments permitted in Sections 7-27-5.3 through 7-27-5.5, [7-27-5.7] 7-27-5.13 through 7-27-5.17, [and 7-27-5.21] 7-27-5.22 and 7-27-5.23 NMSA 1978 shall be those intended to stimulate the economy of New Mexico and shall be referred to as the differential rate investments. The prudent man rule shall be applied to the market rate investments, and the state investment officer shall keep separate records of the earnings of the market rate investments. All transactions entered into on or after July 1, 1991 shall be accounted for in accordance with generally accepted accounting principles." Section 2. A new section of the Severance Tax Bonding Act, Section 7-27-5.23 NMSA 1978, is enacted to read: "7-27-5.23. [NEW MATERIAL] SEVERANCE TAX PERMANENT FUND--INVESTMENT IN OBLIGATIONS ISSUED TO SATISFY INTERSTATE STREAM COMPACT OBLIGATIONS.--Subject to the approval of the state investment council, the severance tax permanent fund may be invested in revenue bonds issued by the interstate stream commission or by the New Mexico finance authority on behalf of the interstate stream commission to satisfy interstate stream compact obligations."". 3. Renumber the succeeding sections accordingly. 4. Strike House Agriculture and Water Resources Committee Amendment 3. 5. On page 14, between lines 21 and 22, insert the following to read: "Section 8. Laws 1991, Chapter 99, Section 2, as amended by Laws 1993, Chapter 97, Section 1, is amended to read: "APPROPRIATIONS--CONDITIONS.-- [A. Subject to conditions set forth in Subsection B of this section] The following amounts are appropriated to the interstate stream commission as follows: (1) one million dollars ($1,000,000) is appropriated from the New Mexico irrigation works construction fund for expenditure in the eighty-first fiscal year for the purpose of purchasing water rights along the Pecos River basin that would effectively aid the state in complying with the Pecos River Compact and the United States supreme court's amended decree in Texas v. New Mexico, No. 65 original; and (2) two million dollars ($2,000,000) is appropriated from the New Mexico irrigation works construction fund in each of the eighty-second through the eighty-sixth fiscal years for expenditure in each of the eighty-second through the eighty-sixth fiscal years for the purpose of retiring water rights along the Pecos River basin that would effectively aid New Mexico in compliance with the United States supreme court's amended decree in Texas v. New Mexico, No. 65 original. [B. The appropriations set forth in Subsection A of this section are subject to the following conditions: (1) the interstate stream commission shall review the expenditures of the appropriation made in Subsection A of this section at each of the interstate stream commission's regularly scheduled meetings or as it deems necessary throughout the seventy-ninth through eighty-sixth fiscal years. This review shall be based on, at a minimum, the conditions set forth in this section; (2) the interstate stream commission shall only expend the money appropriated in Subsection A of this section, subject to the following schedule of priorities in the following order of importance: (a) to purchase water rights, without purchasing the appurtenant land, from willing and able sellers, within the Pecos River basin; (b) to purchase water rights with the appurtenant land within the Pecos River basin; and (c) to purchase water, either surface or subsurface, within the Pecos River basin; and (3) the interstate stream commission shall before any purchases are made using the money appropriated in Subsection A of this section have market evaluations or appraisals made that take into consideration recent and comparable sales, including but not limited to, sales that included surface acreage with and without improvements. The market evaluation or appraisal along with other relevant consideration shall be the basis for any purchase.]"". Respectfully submitted, Jerry W. Sandal, Chairman Adopted Not Adopted (Chief Clerk) (Chief Clerk) Date The roll call vote was 8 For 0 Against Yes: 8 Excused: None Absent: Gallegos, Lovejoy, Lujan, Ryan, Sandoval .112158.1 .111992.1 H0727TR1