Creation of authority; merger with authority; service area.

A. An authority is a political subdivision of the state. B. Two or more entities may create an authority. C. Each founding or joining entity shall adopt a resolution signifying its intention to establish or join an authority. A founding or joining entity shall not adopt a resolution until notice of a public hearing has been given and a minimum of two public hearings have been held, in which proposed articles of incorporation and bylaws were available for public viewing and comment. Public notice shall adhere to the requirements of the Open Meetings Act [Chapter 10, Article 15 NMSA 1978]. D. The resolution shall state: (1) the proposed name and purpose of the authority; (2) the proposed service area of the authority; and (3) the lead founding entity of the authority that shall act as the interim registered agent until the authority is established. E. Upon adoption of the resolutions in accordance with Subsection C of this section, the founding entities shall execute the articles of incorporation and bylaws. The founding entities shall file the articles of incorporation and bylaws with the secretary of state. The articles of incorporation and bylaws are effective upon filing unless a different date is provided in the articles of incorporation. Amendments to the articles of incorporation or bylaws shall not become effective unless filed with the secretary of state. No corporate report shall be required of an incorporated authority. F. The issuance of a certificate of incorporation by the secretary of state shall establish the authority. G. A founding, joining or dissolved entity shall transfer to the authority all assets and liabilities pertaining to or owned by the entity. Prior to transferring any compliance liability, a compliance schedule that addresses the liability shall be developed and approved by the authority and relevant state or federal agencies. H. An authority's initial service area shall consist of the founding entities' existing place of use on file with and approved by the state engineer, but shall not encroach upon the service area of an existing non-joining entity. I. When an entity joins an authority, the joining entity's place of use on file with and approved by the state engineer shall become part of the authority's service area, but shall not encroach upon the service area of an existing non-joining entity. J. An authority shall file a plat with the state engineer and in the property records of the county or counties where the service area is located that designates the authority's initial service area and any subsequent amendments. K. When a founding or joining entity transfers a water right to an authority, the authority shall file a change of ownership form with the state engineer and shall apply to the state engineer to change the place of use or point of diversion of the transferred right.