House passes bill creating severance-tax bonding set‑asides for land grants and acequias, adds delay and tribal increase in amendment

House members voted to advance House Bill 330, as amended, to establish annual severance‑tax bond set‑asides for land grants and acequias and to create associated project funds and a long‑term trust.

The measure, sponsored by Representative Miguel Garcia, places a 1.1% severance‑tax bond set‑aside for a Land Grant Infrastructure Project Fund and a separate 1.1% set‑aside for an Acequia Infrastructure Project Fund. Representative Garcia told the committee the bill “places our centuries old Spanish land grants and communities on a sound footing in addressing much needed infrastructure projects” and described the legislation as a priority for land grant and acequia communities.

Supporters and agency witnesses said the funding would be used for capital work such as drinking‑water and wastewater systems, community centers, fire stations, dam repairs and affordable‑housing infrastructure. Paula Garcia, executive director of the New Mexico Acequia Association, said the association’s purpose is “to have a reliable recurring funding source for acequia infrastructure through a programmatic approach…that ensures project completion in a timely manner.” Arturo Archoneta, director of the New Mexico Land Grant Council, described land grants as “centuries old” communities in need of basic capital improvements and said only 27 land grants are recognized political subdivisions in 11 counties.

Nut graf: The committee approved an amendment (No. 231142.1) that (1) delays disbursements from the proposed land‑grant trust fund for five years so the State Investment Council (SIC) can observe a five‑year balance history before distributions begin, (2) moves annual distribution timing to August 1, and (3) increases the Tribal Infrastructure Fund component from 4.5% to 6.5% of estimated bonding capacity. Committee discussion and fiscal testimony focused on how those percentages translate to dollars and how the new set‑asides will reduce the overall severance‑tax bonding capacity available for other capital projects.

Key details and testimony

- Structure and administration: The bill directs the State Board of Finance and uses severance‑tax bond capacity to create the two project funds and establishes the Land Grant Council (a stand‑alone commission under the Department of Finance and Administration) to vet and prioritize land‑grant projects. The Interstate Stream Commission (ISC) would administer the acequia bureau and project selection for acequia projects.

- Scale and need: Witnesses said there are about 700 acequias in 23 counties and that the ISC’s acequia bureau reported a roughly 90% project completion rate in the most recently completed fiscal year. Archoneta listed typical capital needs including water systems, wastewater, community centers, playgrounds, affordable housing infrastructure, dam repairs and equipment storage.

- Money and estimates: Sponsors and witnesses said the bill sets two 1.1% seve­­rance‑tax bonding set‑asides, which they estimated at about $19 million each from recent capacity calculations. One committee member asked what raising the tribal infrastructure portion from 4.5% to 6.5% would mean in dollars; witnesses estimated roughly $16–17 million per 1% in current estimates, meaning a roughly $34 million increase for a 2% change (sponsors described these as approximate estimates).

- Fiscal tradeoffs: Brendan Gray, an economist with the Legislative Finance Committee (LFC), told the committee that the bill as amended would reduce the bonding capacity available for other projects; LFC estimated reductions in the bill’s fiscal note in the tens of millions (the committee discussion cited combined impacts on the order of tens of millions of dollars from the amendment and base bill).

Questions and criticisms during debate

Committee members pressed sponsors about why the measure creates two new funds rather than expanding existing programs, how the ISC and Land Grant Council will coordinate with existing state programs (for example, the Water Trust Board and the ISC’s existing acequia funding program), and how project prioritization and readiness will be handled. Sponsors and witnesses said the two funds were kept separate because land grants and acequias are different legal entities with different governance and program structures, and because severance‑tax bond set‑asides require a bonding‑capacity structure distinct from some existing trust funds.

Votes and next steps

- Amendment 231142.1 (delay disbursements five years; change annual distribution timing to August 1; increase tribal infrastructure share to 6.5%): adopted by roll call (committee announced the result as 7–3 on the amendment).

- Final motion to report HB 330 with a do‑pass recommendation (as amended): moved by Speaker Miguel Martinez, seconded by Representative Chandler; recorded as approved in committee by roll call, 10–3. Members who recorded no votes and later explained them included Representative Duncan, Representative Montoya and Representative Silva, who said they were concerned about fiscal clarity and the scale of the change.

Ending: The bill now moves forward with the amendment. Sponsors and supporters urged that the funding stream will enable land grants and acequia communities to plan full projects, reduce the need for years of piecemeal capital requests and leverage federal and other state funds, while critics urged further capital‑outlay reforms and clearer fiscal modeling.