The Reclaimed Water Act establishes a framework for the creation and operation of reclaimed water authorities in New Mexico, allowing municipalities and counties to seek authorization from the economic development department to promote the use of reclaimed water. The Act defines key terms and outlines the powers and duties of these authorities, which include the ability to sue, apply for funding, and operate water treatment facilities. It also mandates adherence to existing laws regarding water rights and quality while providing certain immunities from liability. The Act aims to enhance water conservation efforts and promote sustainable use of reclaimed water resources.

Additionally, the bill introduces provisions for the management and regulation of reclaimed water specifically for retail water suppliers regulated by the public regulation commission. It requires contracts for reclaimed water to detail aspects such as source, treatment costs, and pricing, while allowing regulated utilities to request the commission to establish rates to incentivize reclaimed water use. The bill also outlines a certification framework for reclaimed water, stating that certification is not required unless requested by the water quality control commission. If standards are met, reclaimed water will not be subject to state laws governing wastewater. The provisions of this act are set to take effect on July 1, 2025.