N.M. Stat. § 72-1-2.6

A. In addition to the land with appurtenant water rights or rights to the delivery of water acquired pursuant to the provisions of Section 72-1-2.4 NMSA 1978 , the interstate stream commission may expend funds for the purchase of water rights or rights to the delivery of water without acquiring the surface of the land to which the water rights or rights to the delivery of water are appurtenant. No such expenditure shall be made unless the commission has entered into contracts with the governing bodies of the Carlsbad irrigation district, the Pecos valley artesian conservancy district and the Fort Sumner irrigation district that specify the actions the parties agree will be taken or avoided to ensure that the expenditures will be effective toward permanent compliance with New Mexico's obligations under the Pecos River Compact pursuant to Section 72-15-19 NMSA 1978 and the amended decree.

B. Expenditures for the purchase of water rights or rights to the delivery of water pursuant to this section shall be made only from willing sellers in accordance with the following criteria:

(1) the water rights or rights to the delivery of water are located within the Carlsbad irrigation district, the Roswell artesian basin, the Pecos valley artesian conservancy district or between the Acme gauge to and including the Fort Sumner irrigation district;

(2) the transactions through which the commission purchases the water rights or rights to the delivery of water are conducted in compliance with procedures set forth in Subsections F and G of Section 72-1-2.4 NMSA 1978 , except that the resulting contracts shall not require the commission to purchase the land to which the water rights or rights to the delivery of water are appurtenant; and

(3) land from which water rights or the rights to the delivery of water are severed shall be subject to deed restrictions to ensure that no new water development or use, including the drilling of domestic wells pursuant to Sections 72-12-1.1 , 72-12-1.2 and 72-12-1.3 NMSA 1978 , occurs on the land without transfer of valid, existing water rights and that notice of such deed restrictions shall be recorded in the real property records of the county in which the land is located and provided to the state engineer; provided that the commission shall not be responsible for the establishment of cover vegetation or the ongoing maintenance of the land.

C. Water rights or rights to the delivery of water purchased by the commission pursuant to this section shall be included in the calculation of the ratio mandated by Section 72-1-2.4 NMSA 1978 .

D. If the interstate stream commission determines that ownership of all or any part of the surface of land acquired by the commission pursuant to Section 72-1-2.4 NMSA 1978 is not necessary or desirable, the commission may offer the land for sale, in accordance with state law. The land may be offered for sale by sending a written offer to sell, by certified mail, to the party from whom the commission purchased the land at the party's last known address. The offer shall remain open for at least sixty days from the date of mailing. The offer shall include a notice that, if the offer is not accepted by the prior owner within the time stated pursuant to this section, the offer will be deemed rejected and automatically withdrawn and the land may be made available for purchase by third parties in accordance with state law. Land sold pursuant to this section shall be subject to deed restrictions to ensure that no new water development or use, including the drilling of domestic wells pursuant to Sections 72-12-1.1 , 72-12-1.2 and 72-12-1.3 NMSA 1978 , occurs on the land without transfer of valid, existing water rights and that notice of such deed restrictions shall be recorded in the real property records of the county in which the land is located and provided to the state engineer. The revenue from the sale shall be deposited into the Pecos river basin land management fund.
s pursuant to Sections 72-12-1.1 , 72-12-1.2 and 72-12-1.3 NMSA 1978 , occurs on the land without transfer of valid, existing water rights and that notice of such deed restrictions shall be recorded in the real property records of the county in which the land is located and provided to the state engineer. The revenue from the sale shall be deposited into the Pecos river basin land management fund.

E. If the interstate stream commission determines that the total water rights and the rights to the delivery of water purchased pursuant to Chapter 72, Article 1 NMSA 1978 are in excess of those rights permanently needed for New Mexico's obligations under the Pecos River Compact, the commission shall offer the excess water rights for sale in the manner set forth in Section 72-1-2.4 NMSA 1978 .