New Mexico Register / Volume XXXVII,
Issue 11 / June 9, 2026
NOTICE OF PROPOSED RULEMAKING AND PUBLIC HEARING
The New Mexico Water Trust
Board (Board) will hold a public hearing on Thursday,
July 9, 2026, from 10:00 – 11:00 a.m. The hearing will be conducted virtually via
Zoom; the public may attend the hearing using the following methods:
Thursday, July 9, 2026, 10:00-11:00 a.m. Mountain
Time
Zoom Meeting Link:
https://nmfa-net.zoom.us/j/89180637695?pwd=TabZLnXXJHKb6LskEZFMVVg0CzBhlj.1
Webinar ID: 891 8063 7695
Passcode: 006141
To join the meeting by phone,
dial +1 719 359 4580 US or +1 253 205 0468 US
The purpose of the rule
hearing is to obtain input and public comment on proposed rule amendments
relating to
19.25.10 NMAC, review and eligibility of proposed water projects, consistent
with changes made to the Water Project Finance Act,
Laws 2026, Ch. 27 (House Bill 109 Approved March 4, 2026).
Copies of the proposed rule
may be accessed online at https://www.nmfinance.com/about/governance/water-trust-board/
or contact staff at OGC@nmfa.net,
(505) 984-1454, or toll free 1-800-ASK-NMFA (1-877-275-6632).
The Board will accept written
public comments on the proposed rule beginning June 9, 2026. Please submit written comments on the proposed
rule to the NMFA via electronic mail at OGC@nmfa.net, or by regular mail
at 810 W. San Mateo Road, Santa Fe, NM 87505. Written comments must be received
no later than 5 p.m. on July 10, 2026.
Comments received prior to the rule hearing will be posted to the Board
website at https://www.nmfinance.com/about/governance/water-trust-board/. Interested persons will also be given the
opportunity to present their comments during the rule hearing.
Individuals who require this
information in an alternative format or need any form of auxiliary aid to
attend or participate in this meeting are asked to contact the Board Staff as
soon as possible at (505) 984-1454, or toll free 1-800-ASK-NMFA (1-877-275-6632). The Board requests advance notice to provide
required special accommodations at least one week prior to the meeting or as
soon as possible.
Statutory Authority:
Legal authority for this rulemaking may be found in the Water Project Finance
Act, Section 72-4A-1 et seq., NMSA 1978, specifically 72-4A-5. Pursuant to Section 72-4A-6, NMSA 1978, the
New Mexico Finance Authority is responsible for providing necessary
administrative staff support to the Water Trust Board.
Proposed Amendment:
This is an amendment to
19.25.10 NMAC, Sections 6, 7, 8, 9, 11, and 14, effective September 9, 2026.
19.25.10.6 OBJECTIVES:
A. Section 72-4A-5, NMSA 1978 provides
that the New Mexico water trust board is required to adopt rules governing
terms and conditions of grants and loans recommended by the board for
appropriation by the state legislature from the water project fund giving
priority to projects [that have urgent needs, that have been identified for
implementation of a completed regional water plan that is accepted by the
interstate stream commission and that have matching contributions from federal
or local funding sources] pursuant to the Water Project Finance Act;
and authorizes qualifying water projects to the authority that are for: (1)
storage, conveyance or delivery of water to end users; (2) implementation of
federal Endangered Species Act of 1973; (3) wastewater conveyance and
treatment; (4) restoration and management of watersheds; (5) flood prevention;
and (6) water conservation or recycling, treatment or reuse of water as
provided by law. [Additionally, the board shall create a drought strike team
to coordinate responses to emergency water shortages caused by drought
conditions.] Section 72-4A-9, NMSA
1978, creates the “water project fund” within the New Mexico finance authority.
B. [Section
72-4A-5, NMSA 1978, provides that the board shall give priority to qualifying
water projects that (1) have been identified by the board as being urgent to
address public health and safety issues; (2) have matching contributions from
federal or local funding sources available and (3) have obtained all requisite
state and federal permits and authorizations necessary to initiate the
qualifying water project.] The purpose of these rules is to set forth the
intent of the board and to outline, in general terms, the criteria and
procedures to be used in evaluating and funding qualifying water projects.
C. Section 72-4A-5,
NMSA 1978, provides that the board shall evaluate projects, including their
environmental impacts, and recommend projects to the interstate stream
commission pursuant to the provisions of Section 72-14-45, NMSA 1978.
D. Section 72-4A-6, NMSA 1978, provides that the authority
shall provide staff support for the water trust board, develop
application procedures and forms for qualifying entities to apply for grants
and loans from the water project fund; and make loans or grants to qualifying
entities for qualifying water projects [authorized by the state legislature]
pursuant to the Water Project Finance Act, provided that the service
area for the project is wholly within the boundaries of the state or the
project is an interstate project that directly benefits New Mexico.
E. Section 72-4A-6 provides that the loan and grants made
pursuant to Paragraph (3) of Subsection A of Section 72-4A-6 shall require
legislative authorization on and after December 31, 2029.
[E.] F. Section 72-4A-9, NMSA 1978, provides that the authority may [adopt
separate]establish procedures and adopt rules for
administration of the water project fund and recover from the water project
fund costs of administering the water project fund and originating grants and
loans.
[19.25.10.6
NMAC - Rp, 19.25.10.6 NMAC, 7/31/2008; A, 4/22/2025; A, 9/9/2026]
19.25.10.7 DEFINITIONS:
A. “Act”
means the Water Project Finance Act, Sections 72-4A-1 through 72-4A-10, NMSA
1978, as the same may be amended and supplemented.
B. “Agreement”
means the document or documents signed by the board and a qualifying entity
which specify the terms and conditions of obtaining financial assistance from
the water project fund.
C. “Applicant”
means a qualifying entity which has filed a water project proposal with the
authority for initial review and referral to the board’s project review
committee.
D. “Authority”
means the New Mexico finance authority.
E. “Authorized
representative” means one or more individuals duly authorized to act on
behalf of the qualifying entity in connection with its financial application,
water project proposal or agreement.
F. “Board”
means the New Mexico water trust board created by the act.
G. “Bylaws”
means the bylaws of the board adopted on September 25, 2001, and amended on
June 27, 2007, and as may be further amended and supplemented.
H. “Financial
application” means a written document filed with the authority by an
applicant for the purpose of evaluating the applicant’s qualifications for
types of financial assistance which may be provided by the board.
I. “Financial
assistance” means loans, grants and any other type of assistance authorized
by the act, or a combination thereof, provided from the water project fund to a
qualified entity for the financing of a qualifying water project.
J. “Policy committee”
means a standing committee, appointed by the [chairman] chair of
the board from the members of the board pursuant to the bylaws to review
policies and policy related matters and make recommendations to the full board.
K. “Political
subdivision” means a municipality, county, land grant-merced
controlled and governed pursuant to Section 49-1-1 through 49-1-18 or 49-4-1
through 49-4-21 NMSA 1978, regional or local public water utility authority
created by statute, irrigation district, conservancy district, special
district, acequia or soil and water conservation district, water and sanitation
district, or an association organized and existing pursuant to the Sanitary
Projects Act, Chapter 3, Article 29 NMSA 1978.
L. “Project review
committee” means a standing committee, appointed by the [chairman]chair
of the board from the members of the board pursuant to the bylaws to review
water projects to be recommended for funding from the water project fund.
M. “Qualifying entity” means a state
agency, a political subdivision of the state, an intercommunity water or
natural gas supply association or corporation organized under Chapter 3,
Article 28 NMSA 1978, a recognized Indian nation, tribe or pueblo, the
boundaries of which are located wholly or partially in New Mexico or an
association of such entities created pursuant to the Joint Powers Agreement
Act, Chapter 11, Article 1 NMSA 1978 or other authorizing legislation for the
exercise of their common powers.
N. “Qualifying water project” means a
project recommended by the board for funding by the legislature which includes
a water project serving an area wholly within the boundaries of the state for
(1) storage, conveyance or delivery of water to end users; (2) implementation
of federal Endangered Species Act of 1973 collaborative programs; (3)
wastewater conveyance and treatment; (4) restoration and management of
watersheds; (5) flood prevention; or (6) conservation, recycling, treatment or
reuse of water as provided by law[ and which has been approved by the state
legislature pursuant to Subsection B of Section 72-4A-9, NMSA 1978].
O. “State” means the
state of New Mexico.
P. “State agency”
means any agency or institution of the state.
Q. “Water project
account” means a fund designated by a qualifying entity exclusively for
receipt of financial assistance.
R. “Water project fund”
means the fund of that name created in the authority by Section 72-4A-9, NMSA
1978.
S. “Water project
proposal” means a written proposal submitted by a qualifying entity for
review by the project review committee.
T. “Water trust fund”
means the fund of that name created in the state treasury by Section 72-4A-8,
NMSA 1978.
[19.25.10.7
NMAC - Rp, 19.25.10.7 NMAC, 7/31/2008; A, 12/30/2013; A, 4/22/2025; A, 9/9/2026]
19.25.10.8 ELIGIBILITY:
PRIORITIZATION OF WATER PROJECTS: The board will develop and consider a variety
of factors in reviewing and evaluating water project proposals to determine
which water projects to recommend as qualifying water projects for
appropriation by the state legislature. [The board shall give priority to
projects that have urgent needs and that have matching contributions from
federal or local sources as provided for in Section 72-4A-5 NMSA 1978.] Pursuant to Section 72-4A-5.1 NMSA 1978, the
board, in conformance with the state water plan and pursuant to the provisions
of the Water Project Finance Act, shall prioritize the planning and financing
of water projects required to implement the plan. The board shall identify
opportunities to leverage federal and other funding. The board shall establish
policies for prioritization of water projects.
[19.25.10.8
NMAC - Rp, 19.25.10.8 NMAC, 7/31/2008; A, 12/30/2013; A, 4/30/2015; A,
4/22/2025; A, 9/9/2026]
19.25.10.9 WATER
PROJECT PROPOSAL, PROCEDURES AND APPROVAL PROCESS:
A. The authority
will administer an outreach program to notify qualifying entities that water
project proposals are being accepted to identify water projects for review by
the project review committee and the board [for recommendation for funding
to the state legislature as qualifying water projects].
B. The authority
will provide forms and guidelines for water project proposals and financial
applications.
C. The authority
staff will forward all completed water project proposals from qualified
applicants for qualified water projects to the project review committee. The project review committee will consider
the water project and may confer with outside parties, including any local
interdisciplinary teams familiar with the water project, as necessary to obtain
more information on the feasibility, merit, and cost of the water project. The project review committee will make a
recommendation to the board on each water project proposal.
D. Upon the recommendation of the
project review committee, the board will evaluate the qualifying water projects[
for recommendation to the legislature.
E. After completion of the review
process by the project review committee and the board and receipt of a
favorable recommendation on the water project proposal, the water project will
be recommended by the board for approval by the state legislature, which recommendation
and approval are required by Sections 72-4A-5 and 72-4A-9 NMSA 1978.
F. No later than January of each year,
the board will recommend to the legislature a list of projects recommended for
funding. After the legislature authorizes qualifying water projects, the
project review committee will review evaluations of financial applications and
water project proposals prepared by staff and recommend to the board a final
list of projects to be authorized by the board]
for funding by the authority. The authority will provide financial assistance
for qualifying projects [as authorized by the legislature] under
policies jointly established by the board and authority.
[19.25.10.9
NMAC - Rp, 19.25.10.9 NMAC, 7/31/2008; A, 12/30/2013; A, 4/30/2015; A, 9/9/2026]
19.25.10.11 QUALIFYING
WATER PROJECTS AND ELIGIBLE COSTS:
A. The board may
authorize the authority to provide financial assistance from the water project
fund to qualifying entities only for qualifying water projects as provided by
Section 72-4A-6 and Section 72-4A-7, NMSA 1978.
B. Financial
assistance shall be made only to qualify entities that:
(1) agree
to provide for the operation and maintenance of the water project so that it
will function properly over the structural and material design life;
(2) require
the contractor of the construction project to post a performance and payment
bond in accordance with the requirements of Section 13-4-18, NMSA 1978;
(3) provide
written assurance signed by an attorney or provide a title insurance policy
that the political subdivision has proper title, easements and rights of way to
the property upon or through which the water project proposed for funding is to
be constructed or extended;
(4) meet
the requirements of the financial capability set by the authority to ensure
sufficient revenues to operate and maintain the water project for its useful
life and to repay the loan;
(5) agree
to properly maintain financial records in accordance with all applicable laws;
and
(6) agree
to pay costs of originating grants and loans as determined by rules adopted by
the authority.
C. Plans and
specifications for a water project shall be approved by the authority after
review and upon the recommendation of the state engineer and the environment
department before grant or loan disbursements to pay for construction costs are
made to a qualifying entity. Plans and
specifications for a water project shall incorporate available technologies and
operational design for water efficiency.
D. Financial
assistance shall be made for eligible items, which include:
(1) matching
requirements for federal and local cost shares;
(2) engineering
feasibility reports;
(3) contracted
engineering design;
(4) inspection
of construction;
(5) special
engineering services;
(6) environmental
or archeological surveys;
(7) construction;
(8) land
acquisition;
(9) easements
and rights of way; and
(10) legal
costs.
E. A qualified
entity [which has had financial assistance approved by the state legislature
for financing a qualifying water project] may apply to the board to
redirect the financial assistance to a different water project made necessary
by unanticipated events. The decision to
redirect the financial assistance to a different qualifying water project will
be at the sole discretion of the board [and subject to approval of the state
legislature as required by Subsection B of Section 72-4A-9, NMSA 1978].
[19.25.10.11
NMAC - Rp, 19.25.10.11 NMAC, 7/31/2008; A, 5/28/2010; A, 4/22/2025; A, 9/9/2026]
19.25.10.14 RECONSIDERATION OF BOARD DECISIONS: Any applicant or qualifying entity may
request reconsideration of a decision of the board by notifying the board in
writing within 15 days following the meeting at which the decision was made.
Notice of a decision made in an open meeting of the board is deemed to be given
on the date of the meeting, and the time for notification of a request for
reconsideration shall run from that date, regardless whether any written notice
of the decision is given by the board. A
request for reconsideration shall state with particularity the grounds for
reconsideration, including any factual or legal matter on which the applicant
or qualifying entity believes that there was an error by the board. Upon
receiving a timely and proper request for reconsideration, the [chairman]
chair of the board will set the matter for reconsideration at the
board’s next regularly scheduled meeting or at a special meeting called for the
purpose, at the [chairman]chair’s discretion, Upon
reconsideration by the board, the board will notify the applicant or qualifying
entity of the board’s decision, in writing, within five working days of the
decision. The decision of the board on
reconsideration is final. A request for reconsideration not timely or properly made
will not be considered by the board.
[19.25.10.14
NMAC - Rp, 19.25.10.14 NMAC, 7/31/2008; A, 5/28/2010; A, 9/9/2026]