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

SPONSOR Cisneros

ORIGINAL DATE

LAST UPDATED

2-14-07

HB

SHORT TITLE State Engineer Compliance Order Enforcement

SB 847

ANALYST Woods

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

NFI

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates HB580

SOURCES OF INFORMATION

LFC Files

Responses Received From

Office of the State Engineer (OSE)

SUMMARY

Synopsis of Bill

Senate Bill 847 seeks to amend § 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. The amendments in SB 847 clarify the language and intent of the statute and

establish clear procedures for issuing and challenging compliance orders. The substantive

changes are discussed below.

There is no appropriation attached to this legislation.

FISCAL IMPLICATIONS

OSE indicates that the provisions articulated under § 72-2-18 (G) allow, but do not require, the

assessment of civil penalties of up to $100 per day for violation of a compliance order, which

may be assessed and deposited into the general operating fund. Civil penalties, which are rarely

assessed, are anticipated to produce minimal revenue.

Senate Bill 847 – Page

2

SIGNIFICANT ISSUES

OSE advises that House bill 580 was endorsed by the Interim Water and Natural Resources

Committee on November 30, 2006. The amendments to § 72-2-18 set out in this bill are based

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

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

compliance orders, clarify and streamline the procedures for issuing and challenging compliance

orders, and 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:

.

Amended § 72-2-18(B) would remove a reference to irrigation districts, while

continuing to specify that this section shall not interfere with the jurisdiction of a

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

pertaining to water rights.

.

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

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

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

amendment 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.

OSE notes that the other substantive changes to the provisions of § 72-2-18 relate to clarifying

procedures. 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 issues. The revised

language makes it clear 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 revised language also provides for informal resolution of the order only after a

timely request for hearing has been made and it clearly sets forth the procedures for requesting a

hearing before the State Engineer.

OSE concludes that the final substantive change made by the amendments to § 72-2-18 is to

make this section consistent with § 72-2-16, 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."

PERFORMANCE IMPLICATIONS

OSE suggests that this bill would improve the State Engineer’s performance in administering the

waters of the State of New Mexico, and would enhance the quick resolution of alleged violations

of the state water code, which would also benefit persons named in compliance orders.

Senate Bill 847 – Page

3

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

OSE opines that ambiguities concerning the scope of orders, the appeals process and the finality

of compliance orders will continue to hinder the administration of the waters of the state and the

enforcement of compliance orders by the state engineer. Substantial amounts of time will be

required for the resolution of matters concerning compliance of the state water code and the

appellate procedures will remain uncertain.

BFW/mt