A. As used in this section, “covered entity” means municipalities, counties and any other person that supplies, distributes or otherwise provides at least five hundred acre- feet of water annually for domestic, commercial, industrial or government customers for other than agricultural purposes, but does not include Indian tribes, pueblos, nations, chapters or any entity of a tribe, pueblo, nation or chapter.

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B. A covered entity may develop, adopt and submit to the state engineer by December 31, 2005 a comprehensive water conservation plan, including a drought management plan.

C. The manner in which the covered entity develops, adopts and implements a comprehensive water conservation plan shall be determined by the covered entity. The plan shall be accompanied by a program for its implementation.

D. In developing a water conservation plan pursuant to this section:

(1)     municipalities and counties shall consider ordinances and codes to encourage conservation measures; covered entities without ordinance or code enforcement ability shall consider incentives to encourage voluntary compliance with a set of conservation guidelines. Covered entities shall identify and implement best practices in their operations to improve conservation of the resources; and

(2)     the covered entity shall consider, and incorporate into its plan if appropriate, at least the following:

(a) water-efficient fixtures and appliances, including toilets, urinals, showerheads and faucets;

(b) low-water-use landscaping and efficient irrigation;

(c) water-efficient commercial and industrial water-use processes; (d) water reuse systems for both potable and nonpotable water;

(e) distribution system leak repair;

(f) dissemination of information regarding water-use efficiency measures, including public education programs and demonstrations of water-saving techniques;

(g) water rate structures designed to encourage water-use efficiency and reuse in a fiscally responsible manner; and

(h) incentives to implement water-use efficiency techniques, including rebates to customers or others, to encourage the installation of water-use efficiency and reuse measures.

E. The water conservation plan shall contain a section that references the regional water plans in the area that have been accepted by the interstate stream commission. The section shall cite conservation guidelines mentioned in the regional plan that have been adopted into the covered entity’s water conservation plan.

F. A covered entity may at any time adopt changes to its water conservation plan and shall submit changes to the state engineer.

G. After December 31, 2005, neither the water trust board nor the New Mexico finance authority shall accept an application from a covered entity for financial assistance in the construction of any water diversion, storage, conveyance, water treatment or wastewater treatment facility unless the covered entity includes a copy of its water conservation plan.