Senate committee advances bill to create nonreverting fund, broaden purposes for Strategic Water Reserve

Sponsor Senator Stefanik introduced Senate Bill 37 to amend the Strategic Water Reserve statute, saying the bill “creates a nonreverting fund for any future appropriations to the Strategic Water Reserve” and does not itself appropriate new money.

The bill would allow appropriations for the reserve to be held separately from the Interstate Stream Commission’s (ISC) general funds so money would remain available across years while water leases or purchases complete. It would set a $15,000,000 cap on the fund and add aquifer recharge and reduced depletions as additional stated purposes. The bill also directs the ISC to “consider potential supplementary benefits” — such as traditional cultural uses, habitat improvements or recreational benefits — when prioritizing acquisitions.

Hannah Risley White, director of the Interstate Stream Commission, told the committee the agency supports the proposal and its focus on funding stability: “We see this program as being critical for New Mexico… Our largest challenge in implementing this program has been having sufficient and sustained funding.” She said the ISC already uses leases and purchases and expects to continue implementing the program for interstate-compact and endangered-species purposes.

Supporters from water and conservation groups said the changes would make the reserve a more effective, flexible tool. Christina Fisher of Think New Mexico said a nonreverting fund is important because "it takes 2 to 3 or more years to close on a water lease or purchase," and adding a permanent account gives negotiators and sellers needed certainty. Camilla Febelmann of the Sierra Club’s Rio Grande chapter and Allies noted case examples where past leases helped recreation and endangered-species needs.

Opponents warned of market effects. Larry Reagan, president of the New Mexico Farm and Livestock Bureau, said his group’s policy opposes government purchase of private water rights. Howard Hutchinson of the Coalition of Arizona and New Mexico Counties said his group prefers limited-term leases rather than permanent purchases. Senator Scott and others pressed witnesses on whether allowing surface-water purchases to be used for aquifer recharge (and limiting recharge to “natural passive infiltration through the stream bed”) is the most efficient approach; proponents said the restriction reflected negotiated compromise among stakeholders concerned about unintended consequences.

The committee debated guardrails: the bill would limit spending on the new aquifer-recharge purpose to no more than 25% of money expended over any five-year period and requires the ISC to document priorities annually and to consider — but not be strictly bound by — supplementary benefits. Sponsors said the additions do not replace the reserve’s original purposes (compact compliance and threatened/endangered-species recovery) and would help the agency capture multiple benefits from acquisitions.

Action: A motion to report Senate Bill 37 favorably passed on a committee roll call. The committee announced the measure passed by a recorded vote of 6–3.

Why this matters: Supporters said the changes address a longstanding implementation problem — short annual appropriations that can lapse before multi-year water transactions close — and add flexibility to protect surface–groundwater connectivity. Opponents cautioned state purchases can set market prices and urged a preference for leases or narrower definitions of recharge.

Next steps: The bill passed the Senate Conservation Committee and will move to the next committee in the Senate process.