By April Reese, Land Letter, March 31, 2005

New Mexico, home to some of the most contentious water battles in the West, has come up with a new way to buffer against future conflicts.

On March 15, the Senate unanimously passed legislation to create a “strategic water reserve” intended to build up water rights to be used during emergencies. The lower chamber passed the bill earlier in the session.

The legislation - the brainchild of Think New Mexico, a Santa Fe-based think tank - would give the state the authority to purchase or lease water rights from willing sellers to create a publicly held “pool” of rights that could then be tapped to help the state meet the needs of endangered species, such as the silvery minnow in the Rio Grande, and comply with interstate compact requirements to deliver water downstream. In the past, the state has had difficulty meeting both of those obligations.

Estevan Lopez, head of the New Mexico Interstate Stream Commission, said the new water reserve won’t solve all of the state’s water challenges but that it is a “positive step.”

“I think it is an important tool for us to manage our water supply as demands continue to grow,” Lopez said.

The state’s Interstate Stream Commission would be charged with buying or leasing the rights.

New Mexico is the first state to set up a water reserve that involves buying or leasing water rights and then reallocating them for other needs. While other states, including Colorado, Montana, Oregon and Washington, have set up water “trusts” to create in-stream water rights, leaving water in the river for environmental purposes, they do not reallocate the water rights. And neighboring Arizona has a water banking program similar to the reserve, but it only involves temporary leasing.

The Legislature provided $2.8 million in seed money to start the project - less than the $4 million that supporters of the bill had hoped for but “still enough to get the reserve launched,” said Fred Nathan, executive director of Think New Mexico. The money will come from severance tax bonds.

The Legislature provided $2.8 million in seed money to start the project - less than the $4 million that supporters of the bill had hoped for but “still enough to get the reserve launched,” said Fred Nathan, executive director of Think New Mexico. The money will come from severance tax bonds.

The bill has support from business leaders as well as environmental groups and state water officials. J.D. Bullington of the New Mexico Association of Commerce and Industry said the reserve will benefit business by bringing greater water security to New Mexico.

“We have to develop a viable state-wide water policy for New Mexico if we're going to continue to grow,” Bullington said. “Getting water policy right is critical for the economic vitality of the state.”

Nathan said building a war chest of water rights will help prevent the kind of crises that have put New Mexico in the national spotlight in recent years. In one of the state’s most high-profile cases, protections for the Rio Grande’s silvery minnow prompted a water fight that pitted local and state officials against the Endangered Species Act. And on the Pecos River, New Mexico has failed to meet water delivery obligations under a compact with Texas, putting the state at risk of a costly court battle (Land Letter, Jan. 29, 2004).

Most of the water rights for the reserve would likely come from farmers and ranchers, who hold 80 percent of New Mexico’s water rights. Acequias, community-managed irrigation ditches that date back hundreds of years, would be exempted under the bill.

Steve Harris of Rio Grande Restoration said reserve water leased or donated by farmers along the Rio Grande, specifically, would provide welcome relief for the silvery minnow and help the state meet delivery obligations to Texas, which receives water from both the Rio Grande and Pecos River.

“I feel confident you could get 10,000 acre-feet into a leasing program,” Harris said. An acre-foot is enough water to cover an acre a foot deep and is the amount of water used by a family of four for one year.

Nathan said the reserve could help the city of Albuquerque comply with a recent settlement agreement signed by the city and environmental groups that calls for storing 30,000 acre-feet of water in Abiquiu Reservoir to be released in dry times for the silvery minnow. Agricultural water is a likely source for the stored water, and the reserve could contribute water leased from farmers to the reservoir, Nathan said.

But getting an agricultural forbearance program off the ground, which would involve surveying farmers to find out how many would be interested in participating, would require the full $2.8 million allocated to the reserve in its inaugural year by the Legislature. State water officials are eyeing the water reserve funding to help pay for a settlement agreement addressing water conflicts on the Pecos River, which received less funding than expected from the Legislature.

Lopez of the New Mexico Interstate Stream Commission said the best use of the seed funding for the reserve would be to allocate some for endangered species needs and some for meeting compact obligations. That would show the Legislature that the reserve will be used the way lawmakers intended and could help leverage more funding next year, he said.

New Mexico Gov. Bill Richardson (D), a supporter of the water reserve bill, is expected to sign the legislation into law within the next few weeks.