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HOUSE BILL 311
57TH LEGISLATURE - STATE OF NEW MEXICO - FIRST SESSION, 2025
INTRODUCED BY
Nathan P. Small
AN ACT
RELATING TO WATER; ENACTING THE RECLAIMED WATER ACT; PROVIDING
A PROCESS FOR CREATION OF RECLAIMED WATER AUTHORITIES;
PROVIDING POWERS AND DUTIES OF AN AUTHORITY; PROVIDING FOR THE
USE, SALE, PROVISION AND CERTIFICATION OF RECLAIMED WATER.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. [NEW MATERIAL] SHORT TITLE.--This act may be
cited as the "Reclaimed Water Act".
SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the
Reclaimed Water Act:
A. "authority" means a reclaimed water authority
established pursuant to the Reclaimed Water Act;
B. "board" means a reclaimed water authority's
board of directors;
C. "certified reclaimed water" means reclaimed
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water that is certified by the water quality control commission
or the commission's delegate to indicate the water has been
treated to a sufficient quality that it is no longer regulated
as wastewater;
D. "county" means a county of any classification;
E. "customer" means a person or entity that
purchases reclaimed water;
F. "department" means the economic development
department;
G. "jurisdiction" means the area:
(1) governed by a municipality or a county
that has established an authority; and
(2) that is covered by the actions of an
authority;
H. "municipality" means an incorporated city,
village or town;
I. "participating member" means a customer,
reclaimed water producer, reclaimed water wholesaler or retail
water supplier that chooses to participate in work overseen by
an authority;
J. "reclaimed water" means any type of water,
regardless of the source and including wastewater that has been
treated mechanically or chemically, that can be used once it
meets water quality standards issued by the state;
K. "reclaimed water authority" means a newly
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created nonprofit organization authorized pursuant to the
Reclaimed Water Act;
L. "reclaimed water producer" means an entity that
operates a water treatment facility that produces or generates
reclaimed water, including midstream operators, desalination
plant operators and municipal wastewater treatment facilities;
M. "reclaimed water wholesaler" means an entity
that transports or distributes reclaimed water to customers or
suppliers; and
N. "retail water supplier" means an entity that
provides retail water service, including a private water
company, a public agency or a municipality or county.
SECTION 3. [NEW MATERIAL] RECLAIMED WATER AUTHORITY--
AUTHORIZATION TO CREATE.--
A. In response to a request from a municipality or
a county, the department may authorize a municipality or county
to create a reclaimed water authority to work with communities
in the authority's jurisdiction to promote the use of reclaimed
water.
B. A county's or municipality's request pursuant to
this section shall include:
(1) the name of the person submitting the
request;
(2) the name of the county or municipality
requesting authorization to create an authority;
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(3) the names and addresses of all persons who
are proposed to serve on the authority's board of directors;
(4) the names and addresses of the persons who
are proposed to serve as the authority's officers;
(5) the authority's proposed business plan;
(6) the proposed sources and volumes of
reclaimed water that would be within the authority's
jurisdiction; and
(7) the area that would be within the
authority's jurisdiction.
C. A request may be denied if the requester fails
to provide any of the information required pursuant to
Subsection B of this section.
D. The department shall approve or deny a request
within sixty days from the date the request is submitted to the
department.
SECTION 4. [NEW MATERIAL] ORGANIZATION--BOARD OF
DIRECTORS--APPOINTMENT.--
A. Once approved by the department, an authority
may be organized as a nonprofit corporation in accordance with
the Nonprofit Corporation Act and the Reclaimed Water Act. The
authority shall file all documents required by the secretary of
state and by state law in relation to the authority's
organization as a nonprofit corporation and authority.
B. An authority shall be governed by a board of
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directors. A board shall consist of at least six members, five
of whom are voting members, as follows:
(1) the secretary of economic development or
the secretary's designee, who shall serve as an advisor to the
board and not as a voting member; and
(2) the following voting members appointed by
the mayor or governing body of the municipality or county in
the authority's jurisdiction:
(a) one economic development
professional;
(b) at least one professional who has
worked for a reclaimed water producer;
(c) at least one professional who has
worked for a reclaimed water wholesaler;
(d) one member who has worked with or
for a water retailer; and
(e) at least one professional with
experience in environmental studies or environmental protection
work.
C. Upon creation of an authority, three members
shall be appointed to initial terms of two years and three
members shall be appointed to initial terms of one year.
Thereafter, members of the board shall be appointed to terms of
two years. When a vacancy occurs in any of the voting member
positions, the position shall be filled in accordance with the
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provisions of Subsection B of this section.
D. A board shall:
(1) appoint a chair;
(2) elect other officers as the board deems
necessary;
(3) adopt bylaws for the board, in accordance
with the provisions of the Nonprofit Corporation Act, to govern
the conduct of the board in the performance of its duties; and
(4) hire or appoint a president who shall be
the chief administrative officer of the authority and be
responsible for its operations.
SECTION 5. [NEW MATERIAL] AUTHORITY POWERS AND DUTIES.--
A. An authority shall have the powers conferred
upon a domestic nonprofit corporation by the Nonprofit
Corporation Act and, pursuant to the Reclaimed Water Act, the
authority may:
(1) sue and be sued in the authority's
corporate name;
(2) seek and work with vendors, customers or
participants who sell, give, purchase, take or provide funding;
(3) apply for and obtain federal and state
funding and loans;
(4) purchase, take, store, receive, acquire,
own, hold, dispose of, use and otherwise deal in and with
property, including intangible personal property, intellectual
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property, technological innovations and reclaimed or untreated
water;
(5) operate and maintain lawfully permitted
water treatment facilities, desalination plants, laboratories,
water transportation equipment and vehicles and water storage
equipment and facilities;
(6) develop and implement water quality
management plans;
(7) oversee public health and safety programs
applicable to participating members within the authority's
jurisdiction;
(8) provide technical support and consultation
services to industries, municipalities and counties regarding
water treatment;
(9) sell, convey, pledge, exchange, transfer
or otherwise dispose of the authority's assets and properties
for consideration and upon terms and conditions the authority
shall determine;
(10) incur liabilities or borrow money at
rates of interest the authority may determine;
(11) issue and collect fees and assessments;
(12) execute all contracts and other
instruments the board deems necessary in the exercise of the
powers and duties provided in the Reclaimed Water Act;
(13) invest and reinvest the authority's funds
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and receive and administer grants, contracts and private gifts;
(14) conduct activities and operations to
exercise the powers provided in the Reclaimed Water Act;
(15) employ, set compensation for and
prescribe duties of officers and employees as the authority
deems necessary;
(16) enter into agreements with insurance
carriers to insure against any loss in connection with the
authority's operations;
(17) authorize retirement programs and other
benefits for officers and employees of the board;
(18) engage in research and development
activities to improve water and wastewater treatment
technologies and processes;
(19) make grants to promote reclaimed water
use;
(20) engage in community outreach and
educational programs to raise awareness about water
conservation, pollution prevention and the importance of
environmental stewardship; and
(21) perform inspections of reclaimed water;
inspect water quality; and assess fees, penalties and fines
against reclaimed water producers, reclaimed water wholesalers,
and retail water suppliers conducting business with a reclaimed
water authority.
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B. Pursuant to policies established by an
authority's board of directors and as directed by the board's
president, an authority shall:
(1) establish relationships with reclaimed
water producers, reclaimed water wholesalers and customers
throughout New Mexico to encourage the responsible use of
reclaimed water;
(2) foster and promote uses for reclaimed
water that support the development of new industries and the
diversification of the state's economy;
(3) foster relationships among reclaimed water
producers, reclaimed water wholesalers and customers;
(4) work for communities within the
authority's jurisdiction to recruit businesses and jobs related
to the treatment, desalination and purification of reclaimed
water;
(5) develop policies and standards for the
authority that promote the use of reclaimed water and
frameworks for shared infrastructure projects for reclaimed
water;
(6) perform all actions required of an
authority pursuant to the Reclaimed Water Act;
(7) provide quarterly reports of the
authority's activities to the department and the department of
environment; and
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(8) adopt policies and procedures to allow
reclaimed water producers, reclaimed water wholesalers, retail
water suppliers and customers to join an authority's
membership.
SECTION 6. [NEW MATERIAL] MEMBERSHIP OF AN AUTHORITY.--
Reclaimed water producers, reclaimed water wholesalers, retail
water suppliers and customers who choose to become members of a
reclaimed water authority shall be subject to the policies and
procedures adopted by the reclaimed water authority.
SECTION 7. [NEW MATERIAL] INFRASTRUCTURE AND
FACILITIES.--Upon a majority vote of a board and an authority's
participating members, the authority may:
A. construct and operate facilities and
infrastructure; and
B. contract with third parties to allow the
authority or its contractors to take possession of and acquire,
store, transport, sell or dispose of reclaimed water in
accordance with applicable state law.
SECTION 8. [NEW MATERIAL] APPLICATION OF OTHER LAW.--
A. A reclaimed water authority shall be subject to
all applicable laws and rules governing:
(1) water rights;
(2) transportation and handling of water; and
(3) water quality, including rules issued by
the energy, minerals and natural resources department, the
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office of the state engineer and the department of environment.
B. The use of reclaimed water by an authority shall
not impair any existing water rights.
C. An authority is separate and apart from the
state and shall not be deemed an agency, public body or
political subdivision of the state for purposes of application
of law relating to personnel, procurement of goods and
services, gross receipts tax, disposition or acquisition of
property, capital outlays or per diem and mileage.
D. An authority and its board shall be subject to
the Open Meetings Act and the Inspection of Public Records Act;
provided, however, that information obtained by the authority
or its board related to pricing may be designated and marked as
confidential by the party that submits the information, and if
the pricing information is designated and marked confidential,
the pricing information shall not be subject to inspection
pursuant to the Inspection of Public Records Act.
E. An authority or a board and the authority's or
board's officers, directors and employees shall be granted
immunity from liability for any tort as provided in the Tort
Claims Act and may enter into agreements with insurance
carriers to insure against a loss in connection with the
authority's operations even though the loss may be included
among losses covered by the risk management fund of New Mexico.
A director, the president or another officer shall not be
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personally liable for any damages resulting from:
(1) any negligent act or omission of an
employee of the authority or board;
(2) any negligent act or omission of another
director or officer of the authority or board; or
(3) any action taken as a director or officer
or a failure to take any action as a director or officer unless
the director or officer has breached or failed to perform the
duties of the director's or officer's office and the breach or
failure to perform constitutes willful misconduct or
recklessness.
SECTION 9. [NEW MATERIAL] IDENTIFICATION OF RECLAIMED
WATER MARKETS--RETAIL WATER SUPPLIERS--DUTIES.--
A. An authority shall identify:
(1) within the authority's jurisdiction:
(a) potential uses for reclaimed water;
and
(b) potential customers for reclaimed
water service; and
(2) within a reasonable time from the date the
authority is organized, potential sources of reclaimed water.
B. If a municipality or county has not established
an authority, a retail water supplier that serves the area in
which the municipality or community is located shall identify:
(1) within the supplier's service area:
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(a) potential uses for reclaimed water;
and
(b) potential customers for reclaimed
water service; and
(2) potential sources of reclaimed water.
C. Reclaimed water producers and reclaimed water
wholesalers may identify potential uses for reclaimed water and
assist a retail water supplier in identifying potential
customers for reclaimed water service within the supplier's
service area. Information obtained pursuant to this subsection
shall be disclosed to the department within thirty days of the
discovery of the information.
D. Information obtained by an authority or a retail
water supplier pursuant to this section shall be disclosed to
the department within thirty days of the discovery of the
information.
SECTION 10. [NEW MATERIAL] OVERSIGHT BY A RECLAIMED WATER
AUTHORITY.--
A. An authority shall help facilitate communication
among customers, reclaimed water producers, reclaimed water
wholesalers and retail water suppliers within the authority's
jurisdiction.
B. An authority may:
(1) assist with negotiation of commercial
transactions among the parties listed in Subsection A of this
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section and may serve as a mediator in those negotiations;
(2) upon request of a participating member,
assist with establishing rates for reclaimed water with respect
to transactions that occur within the authority's jurisdiction
and in areas that are not overseen by the public regulation
commission; and
(3) with a majority vote from its board of
directors and participating members, issue policies and
procedures that allow for inspections of reclaimed water or
create policies and procedures governing the handling, storage,
transportation or disposal of reclaimed water.
C. The water quality control commission may
authorize an authority to:
(1) establish water quality standards no less
stringent than water standards already established by the
commission;
(2) oversee enforcement of standards
established pursuant to this subsection; and
(3) oversee water quality for reclaimed water
located within the jurisdiction of the authority.
SECTION 11. [NEW MATERIAL] DETERMINATIONS OF AVAILABILITY
OF RECLAIMED WATER.--
A. Upon request of a customer, retail water
supplier, reclaimed water producer or reclaimed water
wholesaler, the department shall provide for the requester's
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inspection any information submitted to the department pursuant
to Section 9 of the Reclaimed Water Act.
B. A retail water supplier or customer that has
identified a potential use or potential customer pursuant to
Section 9 of the Reclaimed Water Act may request that the
authority help facilitate an agreement for reclaimed water
supply.
C. A reclaimed water producer or reclaimed water
wholesaler that, pursuant to Section 9 of the Reclaimed Water
Act, has identified a potential use or potential customer that
is within the service territory or jurisdiction of a retail
water supplier or customer may, in writing, request a retail
water supplier or customer to enter into an agreement to
provide reclaimed water to the potential customer. If the
retail water supplier or customer has not responded to the
request to enter into an agreement within thirty days, the
reclaimed water producer or reclaimed water wholesaler may
request that the authority assist with facilitating an
agreement.
D. An authority shall post and update at least
quarterly a list of retail water suppliers, customers,
reclaimed water producers and reclaimed water wholesalers
within the authority's jurisdiction that have expressed
interest in providing or using reclaimed water.
SECTION 12. [NEW MATERIAL] AGREEMENTS TO PROVIDE
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RECLAIMED WATER.--
A. A retail water supplier that receives a request
from a customer pursuant to Subsection C of Section 11 of the
Reclaimed Water Act shall enter into an agreement to provide
reclaimed water if it is available or can be made available to
the supplier for sale to the customer; provided, however, that
the supplier may delegate this obligation to a reclaimed water
producer or a reclaimed water wholesaler in a written agreement
between the supplier and the producer or wholesaler.
B. If a reclaimed water producer or a reclaimed
water wholesaler provides a customer of a retail water supplier
with a written statement that the producer or wholesaler is
able to and will provide reclaimed water to the retailer, the
retail water supplier shall, within one hundred twenty days
from the date on which the retail water supplier receives the
written statement from the customer by certified mail, return
receipt requested, submit a written offer to the customer that
includes rates and conditions pursuant to Subsection C of
Section 13 of the Reclaimed Water Act.
C. If an authority makes a determination that there
is available reclaimed water to serve a customer of a retail
water supplier, the retail water supplier, not later than one
hundred twenty days from the date on which the retail water
supplier receives a copy of that determination from the
customer by certified mail, return receipt requested, shall
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submit a written offer to the customer.
SECTION 13. [NEW MATERIAL] RECLAIMED WATER RATES--PARTIES
NOT REGULATED BY THE PUBLIC REGULATION COMMISSION.--
A. The price charged per barrel of reclaimed water
sold shall be reported to a designated official appointed by
the authority in the jurisdiction in which it was sold or to
the department, if there is no authority in the jurisdiction,
within sixty days following the sale. The report shall be made
using a form approved by the authority or the department.
B. The rates and conditions for reclaimed water
service shall be established by contract between a retail water
supplier and its customer.
C. A contract executed as provided in Subsection B
of this section shall include:
(1) the source of the reclaimed water;
(2) treatment and transportation costs for the
water;
(3) the method of conveying the reclaimed
water;
(4) a schedule for delivery of the reclaimed
water;
(5) the terms of service;
(6) the rate for the reclaimed water,
including the per-unit cost for that water; and
(7) the costs necessary to provide service and
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the basis for determining those costs.
D. This section does not apply to reclaimed water
services or reclaimed water service rates established before
July 31, 2025 or any amendments to those rates for the duration
of the contract pursuant to which those rates were established.
SECTION 14. [NEW MATERIAL] RECLAIMED WATER RATES--
SUPPLIERS REGULATED BY THE PUBLIC REGULATION COMMISSION.--
A. This section applies only to a retail water
supplier that is regulated by the public regulation commission.
B. A regulated water utility may request the public
regulation commission to establish the rate or rates for the
delivery of reclaimed water, with the objective of providing,
where practicable, a reasonable economic incentive for a
customer to purchase reclaimed water in place of other water
sources.
C. When setting rates in accordance with Subsection
B of this section, the public regulation commission shall set
rates with primary consideration given to enabling retail water
suppliers to promote the sale of reclaimed water in a manner
that allows for reclaimed water activities to increase within
the state.
SECTION 15. [NEW MATERIAL] CERTIFIED RECLAIMED WATER.--
A. There shall be no requirement that reclaimed
water be certified.
B. Any person may submit a request to the water
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quality control commission to adopt standards and procedures
for the certification of reclaimed water.
C. Upon receipt of a request provided for in
Subsection B of this section, following an opportunity for
notice and hearing, the water quality control commission shall
issue standards and procedures for the certification of
reclaimed water. The standards and procedures shall ensure
that certified reclaimed water is in sufficient condition to no
longer require oversight or regulation necessary for wastewater
or produced water.
D. When a batch of reclaimed water is shown to meet
the standards established by the water quality control
commission for certified reclaimed water, the reclaimed water
will no longer be subject to state laws and rules applicable to
wastewater or produced water.
E. The duties of the water quality control
commission described in this section are in addition to the
powers and duties described in the Water Quality Act and shall
apply to reclaimed water generally and not only circumstances
that involve the discharge of water.
SECTION 16. EFFECTIVE DATE.--The effective date of the
provisions of this act is July 1, 2025.
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