Committee advances bill to create land-grant and acequia infrastructure funds, approves amendments delaying disbursements

The Senate Indian, Rural and Cultural Affairs Committee voted to advance Senate Bill 374, as amended, to establish recurring infrastructure funds for land grants and acequias and to set a formula that draws a small percentage of the state's severance tax bonding capacity to support those funds.

Sponsors described the bill as a way to provide a predictable, recurring funding stream for rural and historic land-grant and acequia communities to address capital needs such as drinking-water systems, wastewater, community centers, dam repairs and equipment. "These communities are in desperate need of funding," said Alfredo Montoya, vice chair of the New Mexico Acequia Association. The bill would create a Land Grant Infrastructure Fund and an Acequia Infrastructure Fund administered by the Interstate Stream Commission (ISC) in coordination with the Department of Finance and Administration (DFA) and the New Mexico Land Grant Council.

Under sponsor testimony, the division currently allocates percentages of estimated bonding capacity to several priorities: roughly 9% for water projects (about $160 million in a referenced year), 4.5% for the colonia infrastructure fund and smaller percentages for other set-asides. Senate Bill 374 would add allocations of about 1.1% of estimated severance-tax bonding capacity to the Land Grant Infrastructure Fund and 1.1% to the Acequia Infrastructure Fund—each described in testimony as approximately $19 million in a sample year. Witnesses and sponsors told the committee that those funds would be administered programmatically through ISC and the Land Grant Council to ensure project prioritization and completion.

Committee-approved amendments addressed concerns raised by the State Investment Council and other reviewers. The adopted amendment (as explained on the record) delays disbursements from the trust fund for five years to allow reconciliation and review of balances; it changes the distribution date to August 1 of the fiscal year; and it increases a tribal infrastructure allocation in one provision from 4.5% to 6.5% (an increase sponsors tied to prior statutory changes and earlier allocations that were reduced during downturn years).

Witnesses gave numbers to show unmet needs: the New Mexico Acequia Association listed recent unfunded capital outlay requests (about $7,000,000 for FY25), an ICIP request of about $40,000,000 for FY26, and $83,000,000 in damages from 2024 disasters. ISC testimony said the commission has had recurring funding of roughly $2,500,000 and administered $6,000,000 and $5,800,000 in recent years, leaving a recurring gap of about $4,000,000 per year without new recurring sources.

Committee members discussed whether the proposal would deliver funds soon enough or whether a one-time capital investment would better meet immediate needs; sponsors argued the recurring, guaranteed share would provide long-term stability. Senator comments also raised audit and capacity concerns for small land-grant and acequia entities, with one lawmaker suggesting a future effort to help those entities access and complete required audits to make them eligible for capital money.

The committee voted to give the bill a do-pass recommendation as amended; the clerk recorded four votes in favor and one excused. The bill will move forward to the next step in the legislative process with the amendments adopted on the committee record.