SENATE CONSERVATION COMMITTEE SUBSTITUTE FOR

SENATE BILLS 455 & 542

52nd legislature - STATE OF NEW MEXICO - first session, 2015

AN ACT

RELATING TO WATER; SPECIFYING THE PROCESS FOR APPROVING ENCUMBRANCES AND EXPENDITURES FROM THE NEW MEXICO UNIT FUND; CONDITIONING ACTIONS OF THE INTERSTATE STREAM COMMISSION WHEN ACTING AS THE STATE OF NEW MEXICO; REQUIRING A REPORT ON THE FINANCIAL VIABILITY AND PARTICULARS OF THE NEW MEXICO UNIT BEFORE EXECUTION OF THE NEW MEXICO UNIT AGREEMENT WITH THE UNITED STATES SECRETARY OF THE INTERIOR.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. Section 72-14-45 NMSA 1978 (being Laws 2011, Chapter 99, Section 1) is amended to read:

     "72-14-45. NEW MEXICO UNIT FUND--PURPOSE--APPROPRIATION.--

          A. The "New Mexico unit fund" is created in the state treasury. The fund [shall consist] consists of money distributed to the state pursuant to Paragraphs (2)(D)(i) and (ii) of Section 403(f) of the federal Colorado River Basin Project Act of 1968, as amended by Section 107(a) of the federal Arizona Water Settlements Act, Public Law 108-451, December 10, 2004; other money made available to the fund pursuant to Section 212 of the federal Arizona Water Settlements Act, Public Law 108-451, December 10, 2004; appropriations; grants; and donations or bequests to the fund.

          B. Income from the fund shall be credited to the fund. Any unexpended or unencumbered balance remaining in the fund at the end of a fiscal year shall not revert to the general fund. Money in the fund shall not be transferred, other than through an intra-agency transfer, to any other fund.

          C. Money in the fund shall be administered by the interstate stream commission and is appropriated to the [interstate stream] commission for expenditure in fiscal year 2012 and subsequent fiscal years to comply with the provisions of the federal laws cited in Subsection A of this section. Those provisions of federal law establish that the purpose of money in the fund is to pay the costs of the New Mexico unit or other water utilization alternatives to meet water supply demands in the southwest water planning region of New Mexico, as determined by the [interstate stream] commission in consultation with the Gila-San Francisco water commission as the successor to the southwest New Mexico water study group [or its successor], including costs associated with planning and environmental compliance activities and environmental mitigation and restoration. Money in the fund shall not be expended for any purpose other than the purpose provided in this section. The interstate stream commission may adopt rules it deems necessary to carry out the purpose of this section.

          D. On or before November 15 of each year, the interstate stream commission shall report to the appropriate legislative interim committee dealing with water and natural resources and to the legislative finance committee on:

(1) the status of the New Mexico unit fund;

                [(2) the distribution of money from the New Mexico unit fund to implement the purpose of the fund pursuant to Subsection C of this section; and

                (3) proposed uses and levels of funding projected for the following fiscal year]

                (2) the purposes and amounts of expenditures from the New Mexico unit fund in the prior fiscal year and in summary form for all prior fiscal years to implement the purpose of the fund pursuant to Subsection C of this section;

                (3) the purposes and amounts of each of the commission's planned expenditures or encumbrances during the current fiscal year and next fiscal year exceeding fifty thousand dollars ($50,000); and

                (4) the subjects, conclusions and commission decisions of the consultation for the current fiscal year pursuant to Paragraph (2) of Subsection F of this section.

          E. Expenditures from the fund shall be made on warrants signed by the secretary of finance and administration pursuant to vouchers signed by the director of the interstate stream commission upon the delegation of authority by the interstate stream commission.

          F. The interstate stream commission shall:

                (1) recognize the Gila-San Francisco water commission as the successor organization to the southwest New Mexico water study group; and

                (2) conduct annual consultations by designated representatives of the commission and the Gila-San Francisco water commission at its normal meeting location concluding three months prior to each fiscal year and addressing each proposed expenditure of the New Mexico unit fund exceeding fifty thousand dollars ($50,000):

                     (a) with advance notice and audio- and video-recording streamed over the internet and made publicly available during and after the consultation;

                     (b) with opportunities for public comment; and

                     (c) with written minutes summarizing discussions, decisions and public comments.

          G. In advance of the interstate stream commission's consideration of each encumbrance or expenditure of one hundred thousand dollars ($100,000) or more from the New Mexico unit fund for purchase of planning, design or legal services prior to the acquisition of all federal and state permits to construct the New Mexico unit or alternatives, the secretary of the commission shall provide to the commission the secretary's recommendation for approval, which shall describe:

                (1) the specific intended results and benefits that will inform the commission's decision-making;

                (2) the commission's plan to measure contract compliance and work quality; and

                (3) the secretary's determination that the expenditure of money will:

                     (a) yield results that are achievable, relevant and timely;

                     (b) be determined through the valid and adequate application of scientific or engineering principles; and

                     (c) meet or be required to meet a specified water supply demand in the southwest water planning region of New Mexico."

      SECTION 2. A new section of Chapter 72, Article 14 NMSA 1978 is enacted to read:

     "[NEW MATERIAL] CONDITIONS FOR INTERSTATE STREAM COMMISSION ACTING AS THE STATE TO IMPLEMENT THE ARIZONA WATER SETTLEMENTS ACT OF 2004.--

          A. The interstate stream commission shall designate the Gila-San Francisco water commission as the New Mexico CAP entity for the purpose of signing the New Mexico unit agreement.

          B. The interstate stream commission shall provide an initial grant of not less than one hundred thousand dollars ($100,000) from the New Mexico unit fund to the New Mexico CAP entity to develop the capability and capacity of the New Mexico CAP entity to fulfill its responsibilities as set forth in a joint powers agreement between the commission and the New Mexico CAP entity.

          C. The interstate stream commission and the New Mexico CAP entity shall release a draft report by August 15, 2015 containing:

                (1) a definition of all major components of the New Mexico unit;

                (2) the expected schedule for design and construction of each phase of implementation of the New Mexico unit;

                (3) the interstate stream commission's findings that the New Mexico unit is technically and financially feasible, including the estimate of total and unit costs and of the amount and reliability of the water supply to be produced by the New Mexico unit;

                (4) the plan for transparency and public involvement;

                (5) the conceptual plan to finance each phase of the New Mexico unit;

                (6) the specific uses identified for the water supply resulting from each phase of the New Mexico unit;

                (7) the affordability to end users of water produced by each phase of a New Mexico unit with estimated implementation costs exceeding one hundred million dollars ($100,000,000); and

                (8) the summary of the interstate stream commission's calculations prepared using the best available engineering, hydrologic and geologic information of the average annual safe yield of usable water, the cost per acre-foot and the reliability of the usable water supply produced by each phase of a New Mexico unit with estimated implementation costs exceeding one hundred million dollars ($100,000,000).

          D. The interstate stream commission and the New Mexico CAP entity shall report to the legislative finance committee and to any other interim legislative committee that studies water and natural resources. The commission and the New Mexico CAP entity shall consider the legislative committee discussions and any recommendations of the legislative committees and may make changes to the report based on those recommendations. After the report has been presented to the legislative committees and published, the New Mexico CAP entity may sign the New Mexico unit agreement if it finds the agreement is in the best interest of the state.

          E. All other interstate stream commission actions set forth in the federal Arizona Water Settlements Act of 2004 as actions of the state of New Mexico shall be preceded by the commission's substantive consideration and deliberations of pertinent facts and alternative actions presented in open public meetings. All discussions and deliberations between members of the interstate stream commission pertaining to implementation of the Arizona Water Settlements Act shall be conducted in open public meetings and in full compliance with the state policy stated in Subsection A of Section 10-15-1 NMSA 1978.

          F. As used in this section:

                (1) "average annual safe yield of usable water" means the new annual amount of usable water projected to be produced every year by the New Mexico unit over a fifty-year planning period;

                (2) "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;

                (3) "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 of 1968, as amended by Section 212 of the federal Arizona Water Settlements Act, Public Law 108-451, December 10, 2004; and

                (4) "New Mexico unit agreement" means the agreement between the New Mexico CAP entity and the United States secretary of the interior governing 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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