Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance

committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

if they are used for other purposes.

Current FIRs (in HTML & Adobe PDF formats) are a vailable on the NM Legislative Website (legis.state.nm.us).

Adobe PDF versions include all attachments, whereas HTML versions may not. Previously issued FIRs and

attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

F I S C A L I M P A C T R E P O R T

SPONSOR House Floor

ORIGINAL DATE

LAST UPDATED

3/05/2007

3/12/2007 HB 580/HFLS/a SCONC

SHORT TITLE State Engineer Compliance Order Enforcement

SB

ANALYST Schuss

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Office of the State Engineer (OSE)

SUMMARY

Synopsis of SCONC Amendment

The Senate Conservation Committee amendment changes Subsection B of Section 1 to read:

This Section shall not be construed to affect or interfere with any jurisdiction of an

irrigation district, conservancy district, a state court, a federal court or an Indian Nation, tribe or

pueblo to enforce its orders and decrees pertaining to water rights.

Synopsis of Original Bill

The House Floor substitute to House Bill 580 would amend Section 72-2-18 NMSA 1978, which

governs the issuance of compliance orders by the State Engineer in response to alleged violations

of the water code, conditions of permits and licenses issued by the State Engineer, and court

orders adjudicating water rights.

SIGNIFICANT ISSUES

OSE has included the following in their analysis:

The Interim Water and Natural Resources Committee endorsed this bill on November 30,

2006. The amendments to § 72-2-18 set out in the House floor substitute for HB 580 are based

Hose Bill 580/ HFLS/a SCONC – Page

2

upon the State Engineer’s six years of experience in implementing the compliance order statute

since it was enacted in 2001. The amendments to § 72-2-18 are intended to: 1) clarify the scope

of compliance orders, 2) clarify and streamline the procedures for issuing and challenging

compliance orders, and 3) bring § 72-2-18 into conformance with other provisions of the water

code. The amendments also make some technical changes and reorganize the statute so that it is

easier to read and follow. The amendments make the following substantive changes to the

existing statute:

Subsection (B) of § 72-2-18 is amended to add a reference to state courts to make clear that

§ 72-2-18 is not intended to interfere with any jurisdiction of an irrigation district, a state or

federal court, or an Indian nation, tribe, or pueblo to enforce its orders and decrees pertaining to

water rights.

Subsection (C) of § 72-2-18 currently names certain types of enforcement actions that the

State Engineer may prosecute, while omitting others. This creates the potential for confusion in

the issuance of a compliance order and for those receiving a compliance order. The amendment

to subsection (C) removes any uncertainty by comprehensively stating the scope of orders that

may be included in compliance orders. The amendment also states clearly that the scope of a

compliance order may include violations of the water code, any condition of permits or licenses

issued by the State Engineer, and a court order adjudicating a water right.

The other substantive changes to the provisions of § 72-2-18 set out in House floor substitute

for HB 580 clarify and streamline the procedures relating to compliance orders. Currently, § 72-

2-18 does not clearly express when a compliance order becomes final, how the pursuit of an

informal resolution of a compliance order affects the procedural requirements of challenging a

compliance order, or the process that respondents must follow in order to challenge the order.

The amendments to § 72-2-18 clarify these three issues.

First, subsection (D) is amended to clarify that a compliance order is final thirty days after

receipt of notice of the order by certified mail, unless the person named in the order requests a

hearing before the State Engineer. The House floor substitute for HB 580 also amends

subsections (D) and (E) to make clear that a compliance order is not enforceable until it becomes

final, and amends subsection (G) to clarify that civil monetary penalties assessed by the State

Engineer for violation of a compliance order may be assessed only after the compliance order

becomes final.

Second, the House floor substitute provides in subsection (D) for informal resolution of a

compliance order only after a timely request for hearing has been made.

Third, the House floor substitute clearly sets forth in subsection (D) the procedures for the

recipient of a compliance order to request a hearing before the State Engineer. The amendments

to subsection (D) also make § 72-2-18 consistent with § 72-2-16 NMSA 1978, which provides

that "[n]o appeal shall be taken to the district court until the state engineer has held a hearing and

entered his decision in the hearing." The House floor substitute also clarifies in subsection (F)

that any appeal of a compliance order to district court shall not operate to stay enforcement of the

compliance order, but that the district court may order a stay.

Hose Bill 580/ HFLS/a SCONC – Page

3

PERFORMANCE IMPLICATIONS

OSE states that this bill would improve their performance in administering the waters of the

State of New Mexico.

BS/mt