HB 109 is sponsored by Micaelita Debbie O'Malley (Democrat), Susan K. Herrera (Democrat), and Joy Garratt (Democrat).

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New Mexico 2026 Regular Session Status: Enacted 3 D cosponsors

HB 109 — WATER PROJECT FUND CHANGES

Last action March 05, 2026 — Signed

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Introduced
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In Committee
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Passed House
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Passed Senate
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To Executive
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Enacted

This bill has been enacted into law. Introduced January 16, 2026. Enacted.

Signed by Governor Michelle Lujan Grisham (Democratic) on March 05, 2026.

Odds of enactment

High chance

Based on the sponsor, cosponsors, and committee posture, this bill has a high chance of becoming law.

Upgrade to see the exact probability and what's driving it.

A statistical estimate from our own model of past outcomes — an insight, not a guarantee. Policymaking is volatile.

Prognosis

Advancing 56% · moderate confidence

Enacted

Current position in the legislative process.
3 sponsors

3 primary, 0 co-sponsors signed on.
Single-party support

Sponsorship is currently within one party (3 D).

Based on stage, sponsorship breadth, committee status, recorded votes, and cross-state momentum — a description of the observable signals, not a prediction.

Bill Text

What changed in the latest version

177 added · 1 removed

Plain-language change summary

The bill HB 109 has been amended to allow the New Mexico Finance Authority to fund water projects without needing legislative approval until the end of 2029. Additionally, it introduces specific criteria that must be used to prioritize these water projects, such as the urgency of need and project readiness. This change is significant because it streamlines the funding process, potentially speeding up the development of crucial water infrastructure in the state.

~~57TH~~AN ~~LEGISLATURE~~ACT ~~-STATEOFNEWMEXICO-~~RELATING ~~SECOND~~TO ~~SESSION,~~FINANCE; ~~2026~~

PROVIDING CRITERIA FOR PRIORITIZING WATER PROJECTS PURSUANT TO THE WATER PROJECT FINANCE ACT;

ALLOWING THE NEW MEXICO FINANCE AUTHORITY TO FUND WATER 5 PROJECTS FROM THE WATER PROJECT FUND WITHOUT RECEIVING THE APPROVAL OF THE LEGISLATURE UNTIL DECEMBER 31, 2029.

8 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1.

A new section of the Water Project Finance Act is enacted to read:

"PROJECT PRIORITIZATION.-- A.

The board shall prioritize projects based on the following criteria:

(1) urgency of need, as identified in a regional water planning area with a completed regional water plan accepted by the interstate stream commission;

(2) availability of federal or local matching contributions;

(3) project readiness, including the acquisition of required state and federal permits and authorizations;

(4) regional impacts;

(5) efforts to mitigate or alleviate a project's potential human health and safety concerns;

(6) level of planning and design;

HB 109/a Page 1 (7) improvement of water quality or quantity;

and (8) other goals established for each project type pursuant to the Water Project Finance Act and rules 5 adopted under that act.

Pursuant to Subsection A of this section, the board shall give higher priority to projects that:

(1) have completed planning and design;

(2) provide regional impacts;

(3) mitigate or alleviate human health and safety concerns;

and (4) improve water quality or quantity and advance project-type specific goals established pursuant to the Water Project Finance Act.

The board shall develop and use a weighted scoring system that incorporates the criteria provided pursuant to Subsection A of this section to evaluate and rank all applications for loans and grants pursuant to the Water Project Finance Act.

A ten-point score increase shall be granted in the event of an emergency situation.

Recommendations for expenditure of money from the water project fund shall be based on the scoring and ranking of applications in accordance with this section." SECTION 2.

Section 72-4A-5 NMSA 1978 (being Laws 2001, Chapter 164, Section 5, as amended) is amended to read:

HB 109/a Page 2 "72-4A-5.

BOARD--DUTIES.--The board shall:

adopt rules governing terms and conditions of grants or loans recommended by the board for appropriation by the legislature from the water project fund, giving priority 5 to projects pursuant to Section 1 of this 2026 act;

authorize 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 collaborative programs;

(3) wastewater conveyance and treatment;

(4) restoration and management of watersheds;

(5) flood prevention;

or (6) water conservation or recycling, treatment or reuse of water as provided by law;

and C.

Show all 71 changed lines (31 more)

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." SECTION 3.

Section 72-4A-6 NMSA 1978 (being Laws 2001, Chapter 164, Section 6, as amended) is amended to read:

"72-4A-6.

AUTHORITY--DUTIES.-- A.

The authority shall:

HB 109/a Page 3 (1) provide staff support for the board;

(2) develop application procedures and forms for qualifying entities to apply for grants and loans from the water project fund;

and 5 (3) make loans or grants to qualifying entities for qualifying water projects 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.

The loans and grants made pursuant to Paragraph (3) of Subsection A of this section shall require legislative authorization on and after December 31, 2029." SECTION 4.

Section 72-4A-9 NMSA 1978 (being Laws 2001, Chapter 164, Section 9, as amended) is amended to read:

"72-4A-9.

WATER PROJECT FUND--CREATED--PURPOSE.-- A.

The "water project fund" is created in the authority and shall consist of distributions made to the fund from the water trust fund and payments of principal of and interest on loans for approved water projects.

The fund shall also consist of any other money appropriated, distributed or otherwise allocated to the fund for the purpose of supporting water projects pursuant to provisions of the Water Project Finance Act.

The fund shall be administered by the authority.

Income from investment of the HB 109/a Page 4 water project fund shall be credited to the fund.

Balances in the fund at the end of any fiscal year shall not revert to the general fund.

The water project fund may consist of such subaccounts as the authority deems necessary to carry out the 5 purposes of the fund.

The authority may establish procedures and adopt rules as required to administer the fund and to recover from the fund costs of administering the fund and originating grants and loans.

Ten percent of all water project funds shall be dedicated to the state engineer for water rights adjudications, and twenty percent of the money dedicated for water rights adjudications shall be allocated to the administrative office of the courts for the courts' costs associated with water rights adjudications;

provided that from July 1, 2024 through June 30, 2029, the lesser of four million dollars ($4,000,000) or eight percent of all water project funds shall be dedicated to the state engineer for water rights adjudications and two percent of all water project funds shall be dedicated to the administrative office of the courts for the courts' costs associated with water rights adjudications.

Money in the water project fund may be used by the authority to:

(1) make loans or grants to qualified entities for projects and water rights adjudications pursuant to the requirements of the Water Project Finance Act;

and HB 109/a Page 5 (2) hire contractors to provide financial and administrative capacity development and direct technical assistance on water projects.

The authority is authorized to issue revenue 5 bonds payable from the proceeds of loan repayments made into the water project fund upon a determination by the authority that issuance of the bonds is necessary to replenish the principal balance of the fund.

The net proceeds from the sale of the bonds shall be deposited in the water project fund.

The bonds shall be authorized and issued by the authority in accordance with the provisions of the New Mexico Finance Authority Act." HB 109/a Page 6 25

Latest

~~57TH~~ ~~LEGISLATURE~~ ~~-STATEOFNEWMEXICO-~~ ~~SECOND~~ ~~SESSION,~~ ~~2026~~

AN ACT RELATING TO FINANCE;