A. At any time after the filing of the petition for the organization of a district and before the day fixed for the hearing on it, the owner of any taxable property within the proposed district may file a petition with the court stating reasons why the property should not be included in the district and requesting that the property be excluded from it. The petition shall be verified and shall describe the property sought to be excluded. The court shall hear the petition and all objections to it at the time of the hearing on the petition for organization and shall determine whether the property should be excluded or included in the district.

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B. In determining whether or not the petition for the creation of a water and sanitation district shall be granted, the district court shall consult and request an opinion from:

(1)     the state engineer to determine whether the proposed district has adequate water rights to implement the proposed improvements; and

(2)     the environmental improvement division of the department of environment to determine, as to the technological feasibility of the proposed improvements, whether the water proposed to be supplied is of an acceptable quality to conform with the state regulations and whether the liquid and solid waste disposal proposals can conform with state regulations.

C. The court may deny the petition or may order the petition to be modified if the court, after hearing on the petition, finds that:

(1)     the proposed water and sewage improvements cannot conform with the state regulations;

(2)     the water and sewage improvements cannot be implemented within a reasonable time taking into consideration applications for state and federal grants;

(3)     there is lacking an actual or impending need for the water and sewage improvements proposed; or

(4)     the boundaries of the proposed district contain land that has no actual or impending need for the water and sewage improvements or cannot be reasonably expected to utilize the water and sewage improvements, unless the land is otherwise required to be included in the proposed district by rule or regulation of a federal agency.

D. Upon the hearing, if it appears that a petition for the organization of a district has been properly signed and presented and that the allegations of the petition are true, the court shall order that the question of the organization of the district be submitted to the qualified electors of the district as set forth in the petition, as the boundaries were modified by the court in determining that only property to be benefited by the proposed improvements should be included within the boundaries of the district, at an election to be held for that purpose and conducted pursuant to the provisions of the Local Election Act [N.M. Stat. Ann. Chapter 1, Article 22]. The election shall be held in the district not less than ninety days after the order is entered in accordance with the Local Election Act; provided that the date does not conflict with the provisions of Section 1-24-1 N.M. Stat. Ann..

E. At the election, the qualified electors of the district shall vote for or against the organization of the district. If a majority of the votes cast at the election are in favor of the organization, the district court shall declare the district organized and give it a corporate name by which in all proceedings it shall thereafter be known. Thereupon the district shall be a governmental subdivision of the state, except a district created pursuant to a petition signed by the chair of the board of county commissioners of a county, which district shall be a subdivision of the county. Every district shall be a body corporate with all the powers of a public or quasi-municipal corporation.