New Mexico Senate Bill 37, “the Strategic Water Reserve Act,” signed into law on April 7, 2025, lays the groundwork for creating a strategic water reserve for New Mexico to ensure long-term water security. SB 37 is part of the broader water and environmental legislation passed in 2025 that focuses on restoring critical clean water protections, safeguarding drinking water, and mitigating drought and flood damage across the state in conjunction with HB 137 and SB 21/22 to address the federal rollbacks of the Clean Water Act.
Senate Bill 37’s (SB 37) purpose is to keep water in New Mexico’s waterways because many of the state’s waterways no longer qualify or meet the criteria for federal protection, such as many streams that do not flow year-round and many wetlands that do not have the required continuous surface connection to streams.
SB 37 will enhance the effectiveness of New Mexico’s water reserve by keeping water in New Mexico’s waterways. The reserve will be filled through new water projects, and existing water rights will be purchased. Water stored in the reserve will be accessed during the state’s most critical drought or other water shortages.
How does SB 37 address the Water Reserve Gap?
1) SB 37 creates a non-reverting fund for the Strategic Water Reserve. Allocated funds will never expire. For example, no matter how long it may take to complete a water rights transaction, such as a purchase or lease, the allocated funds will be available to support the transaction. Before SB 37, allocated funds could expire and be repurposed to the general fund before the execution of a transaction, which resulted in many missed opportunities for the state. Furthermore, the revised fund creates additional opportunities with readily available funds to assure water rights holders that they will be compensated for selling or leasing water to the state.
2) SB 37 includes aquifer recharge as a third primary way for the State of New Mexico to acquire water, acknowledging the relationship between surface water and groundwater. Utilizing the reserve for aquifer recharge, New Mexico can work towards developing and maintaining restorative stream flows and replenishing groundwater supplies simultaneously. The reserve will also support flexible, adaptive groundwater management and address groundwater depletion through continuous learning and adjustment.
3) SB 37 gives authority to the Interstate Stream Commission (ISC) to prioritize certain water transactions with supplementary benefits, considering the bigger picture impacts of water management. At least one of the following criteria is required to prioritize a transaction: interstate compact compliance, benefit to threatened or endangered species, and aquifer recharge. An example of a supplementary benefit could be recreation and cultural significance.
In Conclusion
New Mexico is taking significant strides in shaping the state’s water future during the 2025 legislative session, aiming to minimize future risks. SB 37 has the potential to stimulate the economy’s growth with new water projects. Still, on the other hand, we should consider the potential financial costs of maintaining reserves and ensure that they do not become cost-prohibitive. The improvements that SB 37, SB 21/22, and HB 137 lay out as part of New Mexico’s 50-year Water Action Plan are critical to giving the state the control it requires over its water resources and allowing it to reach its full water management potential. SB 37
Source: SB 37 – STRATEGIC WATER RESERVE FUND
Written by: Andrew Kalemba, Operations Specialist at the Southwest EFC
Featured Image by John Foxx from FreeImages
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