New Mexico Administrative Code
Title 3 - TAXATION
Chapter 29 - MISCELLANEOUS STATE TAXES AND FEES
Part 13 - ENVIRONMENTAL IMPROVEMENT ACT
Section 3.29.13.12 - EXEMPTION OF FEDERAL AND INDIAN GOVERNMENTS

A. The water conservation fee does not apply to water produced by the federal government or any of its agencies or instrumentalities. The federal government is immune from such a fee under provisions of the United States Constitution. The immunity applies regardless of the use to which the water is put. The fact that the federal government is immune from paying the fee, however, does not preclude the state of New Mexico from entering into contracts with the federal government, under which contracts appropriate charges are made for services provided.

B. Example: F is a federal agency with facilities in New Mexico. F produces water, mainly for its own use. F also sells small amounts of water to two private businesses adjacent to its New Mexico facilities. Neither business is a public water supply system. F has no obligation to report or pay the water conservation fee on the water sold to the businesses. Neither business has an obligation to report or pay the fee.

C. The water conservation fee does not apply to water produced by any Indian nation, tribe or pueblo or any agency or instrumentality of the Indian nation, tribe or pueblo on the land of that Indian nation, tribe or pueblo. Indian governments are immune from the water conservation fee on water produced on their land by provision of federal law and treaties. The immunity applies regardless of the use to which the water is put. The fact that an Indian nation, tribe or pueblo is immune from paying the fee, however, does not preclude the state of New Mexico from entering into contracts with the Indian nation, tribe or pueblo, under which contracts appropriate charges are made for services provided.

D. The immunity of federal and Indian governments from application of the water conservation fee to water produced by those governments does not extend to water acquired by those governments from public water supply systems which are subject to the fee.

E. Example: B is a federal military reservation located near a New Mexico municipality. B produces water for its own use. B also acquires water produced by the municipality's water department, a public water supply system. The water conservation fee applies to water produced by the municipal water department and sold to B.