This chapter discusses the prob lems associated with the regu latory exceptions that New Mexico provides for private wells used for do mestic purposes. While each well indi vidually may have a minor impact, the sheer number of such wells leads to a signi fic ant combined impact. Further, most such wells are close to a river/stream where they can have direct impacts on streamflow. Here, we review the his tory of the legal status of such wells, recent rules adopted by the Office of the State Engineer (OSE) to better regulate do mestic wells, and the consti tu tionality of existing statute which appears to require the OSE to issue do mestic well permits. A recent case (Bounds v. D’Antonio, 2008) has raised this crit ical issue for New Mexico. Domestic wells are obviously needed in rural areas not served by muni cipal sys tems. However, new subdivisions can take ad vant age of the do mestic well loophole to circumvent the more rigorous applica tion pro cess required for non domestic water rights. Requiring the OSE to treat do mestic well applica tions like other water rights applica tions would create an enorm ous workload. Yet, changes to the existing sys tem may be needed to protect senior water rights. In addition, the question remains as to how to treat existing do mestic wells when they are subject to a pri or ity call. In the inter ests of health and safety, the OSE has indicated a pref er ence for partial exemption of do mestic wells from pri or ity-curtailing only any outdoor use of water, but not indoor drinking and sanitary uses. Meanwhile, the relationship between do mestic wells and prior existing water rights creates an area of un cer tainty in future water management. It is likely these mat ters will eventually be decided by the courts, which may cause a signi fic ant change in the treatment of do mestic wells.