Texas v. New Mexico Settlement
The U. S. Supreme Court approved the historic Texas v. New Mexico and Colorado settlement on May 26, 2026, ending more than a decade of litigation, risk, and uncertainty over the waters of the Lower Rio Grande.
The Office of the State Engineer and Interstate Stream Commission are grateful for the years of effort among the many parties that brought us to this favorable agreement, creating a collaborative path forward grounded in science, law, and long-term stewardship.
This settlement is a win for New Mexico. It ends a decade of legal risk and keeps New Mexico in control of how we manage water and meet our obligations. Moving past the uncertainties of this legal battle, New Mexico now has the clarity we need to work together with water users and communities in the Lower Rio Grande to shape the tools, programs, and conservation efforts that will meet legal obligations while continuing to support agriculture, economic activity, and responsible water management in the Lower Rio Grande.
In the coming weeks we will provide more information, guides, and resources for New Mexicans to learn about the settlement and next steps.
Benefits of the Settlement
Here’s why the proposed settlement is so important for local communities and the state:
• Protection of Groundwater Use
The settlement protects significant groundwater pumping in New Mexico. The United States
argued that groundwater use beyond 1938 levels be shut down, with the potential to devastate
the region. New Mexico is committing to reduce annual groundwater pumping by 18,200 acre-
feet, or approximately 5-7% of current use. That reduction in groundwater pumping will help
protect other uses. The Settlement allows time to implement these necessary reductions.
• Stakeholder Driven Long-Term Solutions
The settlement preserves the abi
The reductions committed to by New Mexico will support aquifer health,
but more is likely to be needed. The settlement provides for 2 years to determine
a Lower Rio Grande Plan to ensure long-term groundwater sustainability. New Mexico is
committed to work with local stakeholders to finalize a plan with local input and buy-in.
• NM Retains the Ability Administer The settlement protects New Mexico’s ability
to administer water rights and provides for additional tools to meet the new state-line
delivery requirement. Current efforts are underway to resolve outstanding water rights
adjudication issues and craft alternative administration plans.
• Increased Certainty
The settlement clarifies two key areas which the 1938 Compact left open — how water is divided
below Elephant Butte Reservoir (57% to NM and 43% to Texas) and groundwater pumping in the
Lower Rio Grande.
• Investments in Solutions not Litigation The state has spent over $35 million on this
costly and long-standing litigation. Reaching a settlement allows the parties to shift resources to
solutions on the ground. The settlement resolved multiple long-standing issues amongst various parties and was only possible through 5 inter-related agreements.
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Resolving the disputes required all of the following five agreements:
U.S. Supreme Court Compact Decree Parties: New Mexico (NM), Texas (TX), Colorado (CO)
Purpose: Resolves pending U.S. Supreme Court litigation; establishes equitable apportionment of
surface water between NM and TX below Elephant Butte Reservoir; allows for a reasonable level of
continued groundwater pumping in both NM and TX; establishes a framework for water accounting,
including a state line index obligation setting forth allowable positive and negative departures.
Operations Settlement Agreement Parties: NM, United States (US), Elephant Butte
Irrigation District (EBID), El Paso County Water Improvement District #1
Purpose: Resolves outstanding disputes regarding Rio Grande Project operations and accounting;
ensures alignment of Rio Grande Project operationswith the Rio Grande Compact accounting frame-
work established in the Compact Decree; includes tools such as allowing transfers of water allocations
between the two irrigation districts under certain conditions to ensure Compact compliance; resolves
outstanding issues regarding priority dates for supplemental groundwater rights within EBID; provides
a framework for a negotiated resolution of other outstanding issues in the Lower Rio Grande Adjudication
Groundwater Settlement Agreement
Parties: NM, US
Purpose: Resolves US claims of Rio Grande Project interference related to groundwater pumping in
NM; requires groundwater depletion reduction in NM of 18,200 acre/feet per year; establishes a process
for consultation regarding Project efficiency and continued aquifer decline under certain conditions;
requires NM to adopt a Lower Rio Grande (LRG) Plan to manage and administer water within two years of the agreement effective date; LRG Plan will include stakeholder input and will allow for a reasonable
level of continued groundwater pumping in NM.
Miscellaneous Purposes Act (MPA) Contract Parties: US, EBID
Purpose: Allows Rio Grande Project water to be used for purposes other than irrigation; provides for
implementing contracts between EBID and other potential users of Project water; The MPA allows for
up to 100,000 acre feet of Rio Grande project water to be converted annually and for fees to be assessed per acre foot of converted water; Some of these fees
are reserved by Reclamation for future O&M needs of project facilities.
Third Party Implementing Contract Under the MPA Contract
Parties: EBID, NM
Purpose: Provides a toolkit for flexible water management with various options for NM to use EBID
Rio Grande project water to meet Compact delivery obligations; provides clear contractually defined
tools for NM to manage interstate water obligations proactively and fairly; designed to be collaborative
by relying on compensation and voluntary participation; built-in annual guard rails intended to mitigate
impacts to EBID operations including annual volume restricts and limits on timing when transfers
can occur.