HB 137 — STRATEGIC WATER SUPPLY ACT

HOUSEAN ENERGY,ACT ENVIRONMENTRELATING ANDTO NATURALWATER; RESOURCES COMMITTEE SUBSTITUTE FOR HOUSE AGRICULTURE, ACEQUIAS AND WATER RESOURCES COMMIHOUSE BILL 137E FOR 57TH LEGISLATURE - STATEOFNEWMEXICO- FIRST SESSION, 2025 This document may incorporate amendments proposed by a committee, but not yet adopted, as well as amendments that have been adopted during the current legislative session.

The document is a tool to show amendments in context and cannot be used for the purpose of adding amendments to legislation.

h g o AN ACT t hr g e i k RELATING TO WATER;

h r i s CREATING THE STRATEGIC WATER SUPPLY PROGRAM;

AUTHORIZING THE h , t, DEPARTMENT OF ENVIRONMENT AND THE OFFICE OF THE STATE ENGINEER e u g e b l e e h TO ENTER INTO CONTRACTS AND AWARD GRANTS FOR PROJECTS INVOLVING n d d i = = o h BRACKISH WATER THAT HAFCºENHANCE REDUCE»HAFC HAFCºENHANCE»HAFC THE l ] b ,d i a º e STATE'S HAFCºRELIANCE ON»HAFC FRESH WATER RESOURCES;

CREATING r i = r t e w d m a n o THE STRATEGIC WATER SUPPLY PROGRAM FUND;

PROVIDING REQUIREMENTS dBEFORE mA :PERSON DRILLS WELLS OR RECOMPLETES EXISTING WELLS TO APPROPRIATE WATERS;

bMAKING eAN dAPPROPRIATION. s º o t n = .231088.2AIC March 8, 2025 (8:55am) s k m e e a n e d r e l u [ A d HENRC/HAAWC/HB 137 BEFORE A PERSON DRILLS WELLS OR RECOMPLETES EXISTING WELLS TO APPROPRIATE WATERS;

MAKING HAFCºAPPROPRIATIONS»HAFC HAFCºAN APPROPRIATION»HAFC .

[NEW MATERIAL] SHORT TITLE.--Sections 1 through 4 of this act may be cited as the "Strategic Water Supply Act".

[NEW MATERIAL] DEFINITIONS.--As used in the Strategic Water Supply Act:

"produced water" means a fluid that is an h incidental byproduct from drilling for or the production of oil u » r and gas;

t h g e l i C.

"public entity" means a county, municipality, hHENRC/HAAWC/HB r137/a iPage s1 political subdivision, state agency or state institution of h , e h higher education;

and t u g e b l e e , gh D.

"treated brackish water" means brackish water n d d i = = o h that has undergone a process to remove or eliminate l ] b ,d i a º r contaminants to meet applicable standards for water quality e r = t e w d established pursuant to the Water Quality Act by the water mquality acontrol ncommission. o d m :

b r e t º o t n = .231088.2AIC March 8, 2025 (8:55am) s k m e - 2 - e a n e d r e l u [ A d HENRC/HAAWC/HB 137 quality control commission.

[NEW MATERIAL] STRATEGIC WATER SUPPLY PROGRAM.-- A.

Subject to the availability of funds and a project that meets all eligibility requirements, the department of environment and the office of the state engineer may each enter into contracts or award grants for eligible projects involving treated brackish water for the purposes of HAFCºenhancing reducing»HAFC HAFCº enhancing»HAFC the state's HAFCºreliance on»HAFC fresh water resources.

To be eligible for a strategic water supply h program contract, a project shall:

g o (1) comply with all applicable state, federal, t hr g e tribal and local governmental standards, permit requirements i k h r i s and other provisions of lawlaw, Hfl1º , including public notice, h , t, public hearing processes and all other associated requirementsHENRC/HAAWC/HB e137/a uPage g2 erequirements b l related to public involvement,»Hfl1involvement, to protect existing water e e h n d d i = = o h rights, conservation of water within the state, public welfare, l ] b ,d i a º e public health and the environment;

r(2) ifurnish =financial rassurance, tother ethan wthird dparty (2)guarantees, furnishto financialthe assurance,department otherof thanenvironment min aaccordance nwith orules dpromulgated mby :the water quality control commission, running to the benefit of the state and with any forfeitures deposited in the state treasury in the strategic water supply program fund;

b(3) eclearly ddemonstrate show ºthe oproject twill nadvance =state, .231088.2AICtribal Marchor 8,local 2025government (8:55am)economic sdevelopment kgoals m e - 3 - e a n e d r e l u [ A d HENRC/HAAWC/HB 137 third party guarantees, to the department of environment in accordance with rules promulgated by the waterpurposes quality control commission, running to the benefit of theenhancing state and with any forfeitures deposited in the statestate's treasuryfresh in the strategic water supplyresources; program fund;

(3) clearly demonstrate how the project will advance state, tribal or local government economic development goals in accordance with the purposes of HAFCº reducing»HAFC HAFCº enhancing»HAFC the state's HAFCºreliance on»HAFC fresh water resources;

To be eligible for a strategic water supply h program grant, the grant recipient shall be a public entity or g o federally recognized Indian nation, tribe or pueblo t hr g e i k Hfl1º located wholly or partially in New Mexico»Hfl1Mexico and the h r i s grant project shall:

h , t, (1) be approved by the state engineer as e u g e b l e e h advancing the exploration, production or treatment of brackishHENRC/HAAWC/HB n137/a dPage d3 ibrackish = = o h water in New Mexico;

l ] b ,d i a º e (2) comply with applicable state, federal, rtribal iand =local rgovernmental tstandards eand wpermit drequirements mand aother nprovisions oof triballaw, andincluding localpublic governmentalnotice, standardspublic hearing processes and permitall other associated requirements drelated mto :public involvement, to protect existing water rights, conservation of water within the state, public welfare, public health and the environment;

b e d s º o t n = .231088.2AIC March 8, 2025 (8:55am) s k m e - 4 - e a n e d r e l u [ A d HENRC/HAAWC/HB 137 and other(3) provisionsclearly ofdemonstrate lawhow Hfl1ºthe ,project includingwill publicadvance notice,state, publictribal hearingor processeslocal andgovernment alleconomic otherdevelopment associatedgoals requirementsin relatedaccordance towith publicthe involvement,»Hfl1purposes to protect existing water rights, conservation of waterenhancing within the state,state's publicfresh welfare,water publicresources. health and the environment;

and (3) clearly demonstrate how the project will advance state, tribal or local government economic development goals in accordance with the purposes of HAFCº reducing»HAFC HAFCº enhancing»HAFC the state's HAFCºreliance on»HAFC fresh water resources.

h (1) do so in accordance with the State-Tribal g o Collaboration Act, where applicable;

and t hr g e (2) consult with the secretary of economic i k h r i s development.

h , t, G.

The department of environment or the office of e u g e b l the state engineer shall notify the state investment council e e h n d d i = = o h about new strategic water supply program contracts or grants lHENRC/HAAWC/HB ]137/a bPage ,d4 i a º e and any opportunities for public input associated with the r i = r t e w d strategic water supply program within two business days of the mdate athe nagency opublishes dthe mnew :grant, contract or public input opportunity to the general public.

b e d s º o t n = .231088.2AIC March 8, 2025 (8:55am) s k m e - 5 - e a n e d r e l u [ A d HENRC/HAAWC/HB 137 date the agency publishes the new grant, contract or public input opportunity to the general public.

Hfl1º I.

In connection with any strategic water supply program contract or grant that is subject to the notice of intention filing requirements pursuant to Section 72-12-26 NMSA 1978, the office of the state engineer shall provide an opportunity for a federally recognized Indian nation, tribe or pueblo located wholly or partially in New Mexico, a person, a firm, a corporation or other entity to file an objection or protest through a process consistent with the provisions of Section 72-12-3 NMSA 1978 regarding a determination by the state engineer made pursuant to Section 72-12-26 NMSA h1978. 1978.»Hfl1 g o t hr SECTION 4.

[NEWSECTION MATERIAL4. ] STRATEGIC WATER SUPPLY PROGRAM g e i k FUND.-- h r i s A.

TheSTRATEGIC "strategicWATER waterSUPPLY supplyPROGRAM programFUND.-- fund"A. is h , t, e u g created as a nonreverting fund in the state treasury and shall e b l e e h be administered by the department of environment.

The fund"strategic nwater dsupply dprogram ifund" =is =created oas h consists of distributions, appropriations, gifts, grants, l ] b ,d i a ºnonreverting efund rin ithe =state rtreasury donations,and incomeshall frombe investmentadministered ofby the funddepartment andof feesenvironment. t e w d m a n o collected pursuant to Section 70-13-6 NMSA 1978.

dThe mfund :consists of distributions, appropriations, gifts, grants, donations, income from investment of the fund and HENRC/HAAWC/HB 137/a Page 5 fees collected pursuant to Section 70-13-6 NMSA 1978.