Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR
Sariñan
a/Garratt/Gurrola
LAST UPDATED
ORIGINAL DATE 2/17/2025
SHORT TITLE
Water Securit
y Planning Act Funds
BILL
NUMBER House Bill 423
ANALYST Davidson
APPROPRIATION*
(dollars in thousands)
FY25 FY26
Recurring or
Nonrecurring
Fund
Affected $62,000 Nonrecurring General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 FY26 FY27
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected
OSE
No fiscal
impact
$150 $150 $300 Nonrecurring General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Duplicates appropriation in the General Appropriation Act
Sources of Information
LFC Files
Agency Analysis Received From
Office of the State Engineer (OSE) Agency Analysis was Solicited but Not Received From
New Mexico Attorney General (NMAG)
SUMMARY
Synopsis of House Bill 423
House Bill 423 (HB423) appropriates $30 million from the general fund to the Office of the State
Engineer (OSE) for the purpose of implementing provisions of the Water Security Planning Act.
HB423 also appropriates $30 million from the general fund to the Office of the State Engineer
for OSE and the Interstate Stream Commission (ISC) to improve their business and information
systems and to implement the Water Data Act.
House Bill 423 – Page 2
HB423 also appropriates $2 million from the general fund to OSE to promulgate rules and
enforce water rights along the Rio Grande from the Los Alamos bridge highway to Elephant
Butte Reservoir to ensure compliance with the Rio Grande Compact.
This bill does not contain an effective date and, as a result, would go into effect 90 days after the
Legislature adjourns if enacted, or June 20, 2025.
FISCAL IMPLICATIONS
The appropriation of $60 contained in this bill is a nonrecurring expense to the general fund. Any
unexpended or unencumbered balance remaining at the end of FY28 shall revert to the general
fund.
The appropriation of $2 million contained in this bill is a nonrecurring expense to the general
fund. Any unexpended or unencumbered balance remaining at the end of FY27 shall revert to the
general fund.
OSE analysis indicates that implementation of HB423 could require additional recurring funding
for one new FTE at $150 thousand for the next two fiscal years. OSE noted that if the
appropriations were amended to add language so the agency could offset administration costs
with some of the nonrecurring funds, no additional recurring funding would be needed.
SIGNIFICANT ISSUES
OSE analysis anticipates that the agency would be unable to expend the funds appropriated in
HB423 within the timeframe defined in the bill, especially given current delays in C2 funding.
A 2024 report by the LFC evaluation unit on nonrecurring projects by OSE indicates that water
projects tend to have a longer timeline than other special appropriations due to their seasonal,
complex, and often capital nature. As such, future special appropriations to OSE should be
considered for multi-year appropriations to account for the often time-intensive nature of water
projects.
The LFC report notes five out of the eight OSE appropriations from the 2023 GAA were
reauthorized—two through FY25 and three through FY28. These reauthorizations were the result
of three primary factors. First, special appropriations to OSE are often capital in nature.
Traditional capital appropriations are made for four years, while special appropriations are
typically made for one year unless otherwise specified. Secondly, there is a seasonality to OSE’s
work—work related to irrigation, dams, and acequias is typically completed at the end of the
irrigation season at the end of the year, limiting the time frame in which work can be completed.
Lastly, water projects often require stakeholder engagement. The limited capacity of local
entities, such as acequia and ditch communities, often creates a delay. For instance, the $2
million special appropriation from the 2023 GAA to the acequia and community ditch
infrastructure fund for the planning, engineering, design, or construction of irrigation works of
acequias or community ditches was delayed due to local capacity, as well as post-fire flooding
issues. However, OSE was able to use this funding to replace aging infrastructure and the
remaining funding will be used in FY25.
House Bill 423 – Page 3
Due to these concerns, consideration needs to be made about appropriate time frames for any
future OSE special appropriations.
AD/rl/SR