Legislature increased recurring budgets and approved nearly $297M in one-time natural-resources investments, LFC says

Austin Davidson, the Legislative Finance Committee’s natural-resource analyst, told the Water and Natural Resources Committee on May 21 that the 2026 Legislature increased recurring budgets for the state’s three main natural-resources agencies and approved almost $297 million in nonrecurring investments.

Davidson said the cumulative recurring increase for the Energy, Minerals and Natural Resources Department, the Office of the State Engineer and the Environment Department was about $8.6 million. "On the nonrecurring side, the legislature gave investments to those agencies totaling $296,700,000," he told the committee.

The one-time appropriations Davidson listed include $22.5 million for implementation tied to the Texas v. New Mexico settlement, $13 million for the strategic water reserve, $15 million for Indian water-rights settlements, $10 million for geothermal development, $25 million for community energy projects, $70 million for public land restoration and purchase and $35 million for the strategic water supply program that supports brackish desalination projects.

Davidson also described changes to the Land of Enchantment Legacy Fund enacted this session, which he said will speed up fund movements and grow investments. He said the environment department’s recurring general fund increased about $2.2 million (roughly 6.2 percent) to cover health insurance and technology rate increases and that the state engineer’s recurring general fund grew about $2.3 million (about 5.9 percent) to support district offices and water-plan implementation staff.

Committee members pressed Davidson for details on how the $70 million for land restoration and purchase would be used. Senator Candy Spencey Zell said she wanted specifics on what land would be restored or purchased, and later raised concerns about expanding state ownership of land. Davidson said the Office of the Natural Resource Trustee would work with qualifying buyers and partners, and that some lines originally targeted for specific purchases were vetoed by the governor, creating more flexibility for the $70 million.

Members also asked about produced water policy and whether the state was redoing industry work. Davidson said that some strategic water-supply funds would support brackish desalination projects in coordination with industry and municipalities and that the state seeks to catalyze new uses in concert with local partners.

Representative Kathleen Cates and other members asked for follow-up information on whether the state has an official search-and-rescue office and for LFC to make report materials accessible in noncolor formats for district offices. Davidson agreed to follow up on these clarifications.

Next steps: Davidson offered to provide additional breakdowns and to coordinate follow-up briefings on specific programs and the land-purchase process.