Senate committee backs $222 million addition to Water Project Fund to close funding gaps

The Senate committee on [committee name not specified] gave a unanimous due-pass recommendation to Senate Bill 29, which would add $222,000,000 to the Water Project Fund, a sponsor told the committee.

The bill’s sponsor, Senator Munoz, said the appropriation would supplement the longstanding annual transfer to the fund and allow projects that are ready to proceed to be funded at fuller levels rather than being repeatedly scaled back. "Normally, we fund them at a hundred and sixty-nine million annually. We bumped that appropriation up to 222,000,000 for the next year so that we can start to move these projects along," Munoz said.

Marquita Russell, identified in the hearing as an expert witness, told the committee the additional money would let the state fund more complete project scopes and reduce the need to pare projects down at award time. Russell described the Water Trust Board process and said projects typically have a multi-step readiness review and that applicants often apply for smaller scopes because they expect awards to be constrained.

Proponents who testified included representatives of New Energy Economy, New Mexico Counties, the Gallup McKinley County Chamber of Commerce and conservation groups. Bill Lee of the Gallup McKinley County Chamber of Commerce said the bill would “close the funding gap” and prevent communities from pushing critical water infrastructure work into later years. Zoe Craft, speaking for an organization identified as Yucca, urged lawmakers to pass SB29 to help rural and tribal communities modernize aging systems and protect drinking water sources.

Committee members asked technical questions about the bill text and the fiscal impact. Senator Sadia Lopez asked whether the bill’s one-year expenditure period could strand funds and whether the appropriation mechanism would require follow-up action in 2026. Russell and other witnesses said the authority in the bill covers the current and next fiscal year and that the practical function of the appropriation is to fill gaps so that previously authorized projects can be pushed to completion. Committee members also discussed why the appropriation was not added directly to the authorizing bill (House Bill 206), with witnesses explaining the legislative separation between authorizations and appropriations and the role of the Water Trust Board in selecting projects.

Speakers emphasized that many projects on the authorization list are storage and conveyance projects and that without additional funding dozens of projects would be scaled back or delayed. Testimony noted applicants are required to provide a local match, typically 10 percent, and that larger municipal projects have driven up total requests in recent years.

After public testimony and questions, the committee moved and seconded a motion for a due pass. The committee voted to recommend SB29 pass with a unanimous due-pass recommendation.

The measure was described repeatedly as addressing aging infrastructure and rising construction costs rather than new growth; witnesses said the bulk of recent requests reflect replacement of failing tanks, pipes and treatment systems.