$30M Carlsbad brine well bill goes before governor after passing House, Senate
Lawmakers are one step away from securing most of the state money needed for saving Carlsbad from a catastrophic sinkhole, with only a day left in the annual state legislative session.
A bill intended to generate almost 70 percent of the funds Carlsbad and Eddy County officials said are needed to prevent the Carlsbad Brine Well’s collapse passed both the Senate and House and is waiting for a signature from Gov. Susana Martinez.
Martinez has until noon on Thursday to make the final decision.
Senate Bill 226, sponsored by Sen. Carroll Leavell (R-41) would funnel $6.4 million per year in vehicle excise tax revenue to the State Road Fund with the intention of using it to remediate the well.
Experts predicted the former brine well, situated beneath the South Y junction of U.S. Highway 285 and U.S. Highway 62/180, could collapse into a 600-foot deep cavern, stretching 300 feet wide and 700 feet long.
Such an event could prove fatal for local residents, and destroy many important infrastructure elements in south part of the city.
The subsequent sinkhole was expected to cause up to $1 billion in damage to infrastructure, and loss of business and tourism.
It could also interrupt irrigation services to thousands of farmers in southern Eddy County, as the well is beneath the Carlsbad Irrigation District’s main canal.
The Carlsbad Brine Well Authority, an arm of the Energy, Minerals, and Natural Resources Department predicted it could cost up to $43 million to preemptively backfill the cavity to prevent the collapse.
State funding acquired in SB 226 would generate about $30 million over the next three fiscal years, by moving 4.15 percent of the excise tax, a three-percent tax assessed from the purchase price of a motor vehicle bought in New Mexico, to the State Road Fund.
Following the brine well appropriations, the rest of the revenue would shift back to the State Road Fund.
Historically, the tax revenue went directly to the State’s General Fund.
The $30 million in state funds would be augmented by $4 million commitments from Eddy County and the City of Carlsbad, leaving the Authority $5 million short of its predicted price tag.
“We tried everything we could think of to help solve this crisis in Carlsbad,” Leavell said. “After a lot of hard work by many, many people, we received unanimous support from the members of State Senate and House to dedicate critical funding needed over the next few years to help prevent a disaster.”
The bill’s advancement comes after a five-bill package intended to sweep dollars from various state funds was defeated on Jan. 25 during a Senate committee hearing.
Leavell said road funds should be used to fix the brine well due to the well’s proximity to roads essential both to New Mexico’s oil and gas industry and the local community.
“Now, it is up to the governor to give her approval to this sensible plan that uses vehicle excise taxes to be invested in a plan that will save a critical portion of Highway 62/180 and U.S. 285 in Carlsbad and will save so much more,” Leavell said.
The bill was cosponsored by Sen. Gay Kernan (R-42) and Sen. John Arthur Smith (D-35).
Kernan said Carlsbad residents and stakeholders spoke at the Roundhouse in support of the funding, proving an important influence on legislators.
“Resolving the funding issue related to the brine well remediation was the result of many advocates coming together to address a critical need in Eddy County,” Kernan said. “Thank you to the local team who spent many days at the Roundhouse sharing the story of what could happen at the brine well unless action was taken.”
Rep. Cathrynn Brown (R-55), who presented House bills equivalent to Leavell’s initial package and led efforts to pass SB 226 in the House, said the unanimous support from House members was a sign that New Mexico lawmakers are starting to take notice of the possible calamity in Carlsbad.
“Everybody, I think, did the right thing,” she said. “It’s a huge victory. The bill was given to the governor, and we are expecting her to act on the bill. We hope for a signature.”
John Heaton, chair of the Authority said securing the funds will benefit contract negotiations, as the winning bidder will know the money is available.
“It gets us the money we need to get started,” Heaton said of the bill. “It will give the contractor confidence that we have the money during negotiations. There was some skepticism.”
If all goes according to plan, Heaton said construction could begin on July 1, allowing about four months for the winning bidder to conduct evaluations, develop a design and prepare the necessary materials and equipment.
“That’s exciting,” he said. “We’re fighting against time.”
In addition to SB 226’s passage, Brown said legislation intended to reorganize the Authority in preparation for the project advanced past the House on Monday.
House Bill 319, sponsored by Rep. Nate Gentry (R-30) establishes the Authority’s rights to issue bonds, utilize imminent domain powers and enter contracts.
It also places the Authority directly under EMNRD oversight, assigning Cabinet Secretary Ken McQueen or a designee as chair.
“We needed someone with executive experience,” Brown said. “Ken has a very good background. He has the resources of the department.”
She said as the project moves forward, the Authority will no longer be considered a mere “advisory board.”
“For a project this big, to have just volunteers is not necessarily fair,” Brown said. “We want the Authority to work in concert.”
Heaton said the change was important as the project takes shape.
“The advisory authority will now be a real authority,” he said. “(EMNRD) is already doing the oversight. (The Authority) probably would be better as a full authority."
Carlsbad Mayor Dale Janway commended local and state officials for addressing what he said is the biggest concern throughout Carlsbad.
"We were all very thrilled to learn that Senate Bill 226, which transfers some of the Motor Vehicle Excise Tax from the general fund to the road fund, has passed unanimously through both the House and Senate and is now on the Governor’s desk," Janway said.
"Senator Smith and the entire Senate and House are to be commended for doing the right thing. We appreciate the many, many Carlsbad residents who have traveled up to Santa Fe over the past few weeks to voice their concerns about our town’s safety.
"This was truly a community effort, and it is looking very positive right now."
Adrian Hedden can be reached at 575-628-5516, firstname.lastname@example.org or @AdrianHedden on Twitter.