I attest to the accuracy and
integrity of this document
New Mexico Compilation
Commission, Santa Fe, NM
'00'04- 13:06:06 2011.04.27
Certiorari Granted, February 9, 2011, No. 32,704
IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number: 2011-NMCA-015
Filing Date: October 28, 2010
Docket No. 27,802
TRI-STATE GENERATION AND
TRANSMISSION ASSOCIATION, INC.
and NEW MEXICO MINING ASSOCIATION,
Petitioners-Appellees,
v.
JOHN D’ANTONIO, JR.,
NEW MEXICO STATE ENGINEER,
Respondent-Appellant.
APPEAL FROM THE DISTRICT COURT OF SOCORRO COUNTY
Matthew G. Reynolds, District Judge
Rodey, Dickason, Sloan, Akin & Robb, P.A.
Sunny J. Nixon
James P. Bieg
Soha F. Turfler
Santa Fe, NM
for Appellees
Gary K. King, Attorney General
Stephen R. Farris, Assistant Attorney General
Frances C. Bassett, Assistant Attorney General
Judith Ann Moore, Assistant Attorney General
Santa Fe, NM
New Mexico Office of the State Engineer
John D’Antonio, Jr., State Engineer
DL Sanders, Special Assistant Attorney General
Santa Fe, NM
1
Sutin, Thayer & Browne, P.C.
Paul Bardacke, Special Assistant Attorney General
Peter S. Kierst, Special Assistant Attorney General
Kimberly M. Bannerman, Special Assistant Attorney General
Albuquerque, NM
for Appellant
Hennighausen & Olsen, L.L.P.
A.J. Olsen
Fred H. Hennighausen
Alvin F. Jones
Roswell, NM
Richard A. Simms
Hailey, ID
for Amicus Curiae Pecos Valley Artesian Conservancy District
Adolfo J. Méndez II, Assistant General Counsel/Special Assistant Attorney General
Santa Fe, NM
for Amicus Curiae New Mexico Environment Department
Hubert & Hernandez, P.A.
Lee E. Peters
Las Cruces, NM
for Amicus Curiae New Mexico Cattle Growers’ Association
Hubert & Hernandez, P.A.
Steven L. Hernandez
Las Cruces, NM
for Amicus Curiae Carlsbad Irrigation District
Hubert & Hernandez, P.A.
Beverly J. Singleman
Las Cruces, NM
for Amicus Curiae Elephant Butte Irrigation District
Davidson Law Firm, LLC
2
Tessa T. Davidson
Tatiana D. Engelmann
Corrales, NM
for Amicus Curiae New Mexico Pecan Growers
Victor R. Marshall & Associates, P.C.
Victor R. Marshall
Albuquerque, NM
for Amici Curiae San Juan Agricultural Water Users Association, the Hammond
Conservancy District, and the Acequia Landowners Association of the Lower
Rio Grande
Christopher D. Shaw, Special Assistant Attorney General
Tanya M. Trujillo, Special Assistant Attorney General
Santa Fe, NM
for Amicus Curiae New Mexico Interstate Stream Commission
OPINION
BUSTAMANTE, Judge.
{1} We are presented in this case with a challenge to the validity of 19.25.13.27 NMAC
(12/30/2004) and 19.25.13.30 NMAC (12/30/2004) of the Active Water Resource
Management (AWRM) Regulations promulgated by the State Engineer. The dispute centers
on aspects of the regulations that contemplate the administration of water rights through the
determination and enforcement of priority. The district court overturned portions of the two
regulations at issue because it found that they impermissibly expanded the scope of the State
Engineer’s statutory authority and violated due process protections. We hold that
19.25.13.27 NMAC, the regulation addressing the State Engineer’s determination and
enforcement of priority, in part exceeds the scope of authority delegated by the Legislature
to the State Engineer and offends principles of separation of powers. To the extent the
district court held that the application of the regulation must be limited to court adjudication
decrees and licenses issued by the State Engineer, we agree. However, we disagree with the
district court to the extent it held that application of the regulation may rest on subfile orders
or offers of judgment. We do not address 19.25.13.30 NMAC. We therefore affirm in part
and reverse in part.
BACKGROUND
{2} In 2003, the Legislature enacted NMSA 1978, Section 72-2-9.1(A)-(B) (2003), which
provides, in pertinent part:
3
A. The [L]egislature recognizes that the adjudication process is
slow, the need for water administration is urgent, compliance with interstate
compacts is imperative and the [S]tate [E]ngineer has authority to administer
water allocations in accordance with the water right priorities recorded with
or declared or otherwise available to the [S]tate [E]ngineer.
B. The [S]tate [E]ngineer shall adopt rules for priority
administration to ensure that authority is exercised:
(1) so as not to interfere with a future or pending
adjudication;
(2) so as to create no impairment of water rights, other
than what is required to enforce priorities; and
(3) so as to create no increased depletions.
The State Engineer promulgated the AWRM regulations in response to the enactment of
Section 72-2-9.1. The Middle Rio Grande Conservancy District and Appellees Tri-State
Generation and Transmission Association, Inc. and New Mexico Mining Association
immediately challenged the new regulations. Following extensive briefing and oral
argument, the district court struck down portions of the AWRM regulations. The district
court concluded in pertinent part:
[T]his Court reverses the State Engineer’s Order No. 154, adopting the
Active Water Resource Management regulations in violation of his statutory
authority and the New Mexico and U.S. Constitutions, to the following
extent:
(1) 19 NMAC 25.13.27’s list of the hierarchy of evidence for
administrable water rights violates N.M. Const. art. III, § 1, other
than A. a partial final decree or final decree; B. a subfile order in an
adjudication; C. an offer of judgment confirmed by the court in a
water rights adjudication; and E. a license issued by the State
Engineer.
The State Engineer appeals.
{3} The AWRM regulations are designed to enable the State Engineer to administer
water right priorities by curtailing “junior” water rights, or rights established later in time,
when water shortages threaten senior appropriators. See 19.25.13.6 NMAC (12/30/2004),
19.25.13.24 NMAC (12/30/2004), 19.25.13.27 NMAC. The regulations (1) direct the State
Engineer to determine the elements of water rights, including priority, in the course of
administrative proceedings, and to set an “administration date” delineating which water
4
rights are “out-of-priority” and must cease diversion; and (2) define enforcement
mechanisms that enable water masters to curtail the use of “out-of-priority” water rights.
19.25.13.7(C)(3)(c) NMAC (12/30/2004); 19.25.13.16 NMAC (12/30/2004); 19.25.13.17
NMAC (12/30/2004); 19.25.13.27 NMAC; 19.25.13.29 NMAC (12/30/2004). The
regulations further outline a procedure for publication of the list of water rights and
associated priorities, informal presentation of evidence by claimants to the State Engineer,
formal hearings on objections, and ultimately appeals. 19.25.13.27, 19.25.13.30 NMAC.
{4} Administrative Code 19.25.13.27 describes the process the State Engineer must
follow when determining priority.
The water master district manager for each water master district will define
each administrable water right by its elements as set forth in Subsections A
through G below. In all instances where the [S]tate [E]ngineer makes
determinations of priority based on best available evidence as set forth in
Subsections A through G below, he shall publish a list of his determination
of the water rights in the water master district for review and provide
opportunity to affected water right owners to informally present evidence.
The [S]tate [E]ngineer shall hear objections to the water master district
manager’s determination of an administrable water right in accordance with
[NMSA 1978, Section 72-2-16 (1973)]. Filing of an objection to the water
master district manager’s determination of an administrable water right will
not stay the [S]tate [E]ngineer’s administration based upon that
determination, pending resolution of the objection. Appeals from decisions
of the [S]tate [E]ngineer shall be in accordance with [NMSA 1978, Section
72-7-1 (1971)]. The water master district manager for each water master
district will define each administrable water right by its elements as set forth
in:
A. a partial final decree or a final decree entered by an
adjudication court of competent jurisdiction, subject to any [S]tate [E]ngineer
permit issued subsequent to entry of said adjudication decree; or, if no decree
has been entered, then;
B. a subfile order entered by an adjudication court of competent
jurisdiction; or, if no subfile order has been entered, then;
C. an offer of judgment signed by the defendant in a water rights
adjudication; or, if no offer of judgment has been signed, then;
D. a hydrographic survey conducted and filed in accordance with
[NMSA 1978, Section 72-4-17 (1965) or NMSA 1978, Section 72-4-16
(1919)]; or, if no hydrographic survey has been filed, then;
5
E. a license issued by the [S]tate [E]ngineer; or, if no license has
been issued, then[;]
F. a permit issued by the [S]tate [E]ngineer, accompanied by
proof of actual beneficial use; and
G. a determination made by the [S]tate [E]ngineer based on the
best available evidence, consisting of, where available, any filings with the
office of the [S]tate [E]ngineer, field or documentary evidence of beneficial
use associated with the right including historical aerial photography,
diversions records of historical diversions, historical studies containing
evidence regarding water use, and data regarding irrigation and water
delivery system requirements.
Id. Administrative Code 19.25.13.30 outlines the procedures by which objections may be
heard and appeals undertaken with respect to priority administration:
Owners of administrable water rights are encouraged to resolve objections
to the [S]tate [E]ngineer’s determination of an administration date informally
with the [S]tate [E]ngineer’s district office. If such informal negotiations
fail, the [S]tate [E]ngineer shall hear objections to his determination of an
administration date in accordance with Section 72-2-16 NMSA. Filing of an
objection to an administration date will not stay the [S]tate [E]ngineer’s
administration by administration date, pending resolution of the objection.
Appeals from decisions of the [S]tate [E]ngineer shall be in accordance with
Section 72-7-1[.]
STANDARD OF REVIEW
{5} The issues on appeal concern the extent of the authority that the Legislature
delegated to the State Engineer, as well as the constitutional validity of 19.25.13.27 NMAC
in light of separation of powers concerns. Because these issues present questions of law, we
apply the standard of de novo review. See N.M. Indus. Energy Consumers v. N.M. Pub.
Regulation Comm’n, 2007-NMSC-053, ¶ 19, 142 N.M. 533, 168 P.3d 105 (“Statutory
interpretation is an issue of law, which we review de novo.”); N.M. Bd. of Veterinary Med.
v. Riegger, 2007-NMSC-044, ¶ 27, 142 N.M. 248, 164 P.3d 947 (“We review questions of
constitutional law and constitutional rights . . . de novo.”).
SEPARATION OF POWERS
{6} In making their separation of powers arguments, the parties debate at length whether
the determination of the elements of water rights is fundamentally a judicial function, such
that the Legislature would be barred from any delegation to the State Engineer in this realm.
However, we do not consider this issue to be determinative. The New Mexico Constitution
6
contains nothing to indicate that determination of the elements of water rights is consigned
exclusively to the judicial branch; it merely provides for de novo review. See N.M. Const.
art. XVI, § 5 (providing for de novo review in appeals from rulings of state executive
officers or bodies in matters pertaining to water rights). Nor do basic principles of
separation of powers prohibit administrative agencies from engaging in the processes of
making factual and legal determinations respecting the rights of individuals. See Wylie
Corp. v. Mowrer, 104 N.M. 751, 752-53, 726 P.2d 1381, 1382-83 (1986) (upholding the
creation of an administrative agency to address individual rights and striking down prior
authority prohibiting administrative agencies from engaging in activities nominally
denominated “judicial” or “quasi-judicial” in nature); see also AA Oilfield Serv., Inc. v. N.M.
State Corp. Comm’n, 118 N.M. 273, 279, 881 P.2d 18, 24 (1994) (“This Court has
recognized that administrative agencies . . . may exercise ‘quasi-judicial’ powers.”). Rather,
the separation of powers issue that concerns us is the nature and reach of the legislative
authority which the State Engineer argues permits him to adopt the AWRM regulations at
issue in this case.
Scope of Authority Delegated to the State Engineer by the Legislature
{7} As we have stated, we must determine whether the State Engineer acted within the
scope of authority granted by the Legislature. “Agencies are created by statute[s] and
limited to the power and authority expressly granted or necessarily implied by those
statutes.” Qwest Corp. v. N.M. Pub. Regulation Comm’n, 2006-NMSC-042, ¶ 20, 140 N.M.
440, 143 P.3d 478. If an agency acts beyond its legislative authority, it infringes upon the
Legislature’s role in violation of the separation of powers principles of Article III, Section
1 of the New Mexico Constitution. State ex rel. Sandel v. N.M. Pub. Util. Comm’n, 1999-
NMSC-019, ¶¶ 11, 30, 127 N.M. 272, 980 P.2d 55 (holding that the Public Utility
Commission’s deregulation of part of the electric power industry was inconsistent with its
statutory authority and thus intruded on the province of the Legislature in violation of Article
III, Section 1 of the New Mexico Constitution). Accordingly, we look to the enabling
statutes to determine the scope of authority the Legislature granted the State Engineer.
{8} NMSA 1978, Section 72-2-1 (1982) is the principal enabling provision that
establishes the office of the State Engineer and specifies that the State Engineer “has general
supervision of waters of the state and of the measurement, appropriation, distribution thereof
and such other duties as required.” NMSA 1978, Section 72-2-9 (1907) further specifies that
the State Engineer may supervise “the apportionment of water in this state according to the
licenses issued by him and his predecessors and the adjudications of the courts.” NMSA
1978, Section 72-2-8 (1967) grants the State Engineer the ability to adopt regulations
implementing and enforcing laws in the Water Code.
{9} Other statutory provisions grant the State Engineer the power to grant permits and
licenses. See NMSA 1978, §§ 72-5-1 (1941), 72-5-6 (1985), 72-5-13 (1907). Generally, all
prospective water users must apply to the State Engineer to appropriate water, and the State
Engineer is required to determine whether unappropriated water is available. Sections 72-5-
7
1, -6. But see NMSA 1978, § 72-12-1.1, -1.2, -1.3 (2003) (creating exception for permits
for domestic use wells, livestock wells and temporary uses). The State Engineer must
further evaluate applications to ensure that the proposed use will not impair existing rights,
is not contrary to conservation of water within the state, and is not detrimental to the public
welfare. Section 72-5-6; NMSA 1978, § 72-5-7 (1985). The State Engineer also has the
authority to grant water right applications subject to conditions to avoid detriment to existing
rights or the public welfare. Section 72-5-6.
{10} The statutes further grant the State Engineer authority over established water rights.
Claimants seeking to transfer the purpose or place of use of their water rights are required
to seek formal approval from the State Engineer, who must evaluate the application to
determine whether the change will impair existing rights. See NMSA 1978, §§ 72-5-23, -
24; 72-12-7 (1985). The State Engineer may also initiate forfeiture proceedings based upon
an independent determination of nonuse. NMSA 1978, § 72-5-28 (1997) (amended 2002).
{11} As demonstrated by these statutory provisions, the Water Code provides the State
Engineer with some authority to administer the appropriation and uses of water within the
state. To be sure, this statutory authority enables the State Engineer to determine certain
elements of water rights as part of this supervision. See, e.g., 19.26.2.7(EE) NMAC
(1/31/2005) (defining in the rules and regulations governing the appropriation and use of
surface waters “[w]ater right” as the “legal right to appropriate water for a specific beneficial
use” and stating that the “elements of a water right generally include owner, point of
diversion, place of use, purpose of use, priority date, amount of water, periods of use, and
any other element necessary to describe the right”).
{12} Additionally, permits and licenses by necessity identify usage elements. See, e.g.,
NMSA 1978, §§ 72-5-18 (1969) (amended 2007), 72-12-3(E) (2001); 72-5-1, -6, -7, -13.
They also incorporate a priority date. See NMSA 1978, § 72-5-3 (1941). The licensing,
permitting, transfer, and forfeiture statutes also, as we have stated, require the State Engineer
to evaluate factors such as beneficial use, availability of unappropriated water, and
impairment of existing rights.
{13} In order to evaluate beneficial use, the State Engineer must assess the quantity, place
of use, and purpose to which water has actually been applied. See State ex rel. Martinez v.
McDermett, 120 N.M. 327, 330, 901 P.2d 745, 748 (Ct. App. 1995) (“Beneficial use has
been defined as the use of such water as may be necessary for some useful and beneficial
purpose in connection with the land from which it is taken. The concept requires actual use
for some purpose that is socially accepted as beneficial.” (internal quotation marks and
citation omitted)). In order to evaluate the availability of unappropriated water, the State
Engineer must assess both the total amount of water available within a stream system and
all prior appropriations to determine whether there is any residual amount. See Templeton
v. Pecos Valley Artesian Conservancy Dist., 65 N.M. 59, 69, 332 P.2d 465, 471 (1958)
(observing with respect to permit issuance that “the State Engineer has to consider all prior
appropriations to determine whether or not there are any unappropriated waters”). In order
8
to evaluate impairment of existing rights, the State Engineer must assess whether the
contemplated action will have an adverse effect on any prior appropriation. See Montgomery
v. Lomos Altos, Inc., 2007-NMSC-002, ¶ 31, 141 N.M. 21, 150 P.3d 971 (filed 2006) (“For
the impairment analysis, the State Engineer must either include the total amount of water
rights . . . or formally extinguish them.”). Evaluating available water, prior appropriations,
and any adverse effect of contemplated actions necessarily requires the State Engineer to
consider the relationship of the rights of individual water users.
{14} Finally, in the context of the State Engineer’s supervision of the uses of water, the
State Engineer may deny an application or impose conditions when granting it in order to
protect existing uses, including junior rights. See City of Roswell v. Berry, 80 N.M. 110,
112, 452 P.2d 179, 181 (1969); see also City of Albuquerque v. Reynolds, 71 N.M. 428, 439,
379 P.2d 73, 81 (1962) (reiterating the State Engineer’s “power and duty to . . . deny the
applications in toto if necessary to protect existing rights”). Under the doctrine recognized
in Templeton that a senior surface appropriator may access underground waters that were the
source of the surface water supply before being intercepted by junior users, our Supreme
Court noted that the new point of diversion could not impair the rights of these other users.
65 N.M. at 67-68, 332 P.2d at 470-71; see Herrington v. State ex rel. Office of State Eng’r,
2006-NMSC-014, ¶ 11, 139 N.M. 368, 133 P.3d 258 (“Although the New Mexico prior
appropriation doctrine theoretically does not allow for sharing of water shortages, the
Templeton doctrine permits both the aggrieved senior surface appropriator and the junior to
divert their full share of water.” (footnote omitted)).
Legislative Authority to Promulgate the Regulations
{15} The State Engineer contends that this historical administration of the appropriation
and uses of water is consistent with the priority administration contained in the AWRM
regulations. He specifically argues that the Legislature has merely re-directed his power in
Section 72-2-9.1, such that although his exercise of the power under the AWRM regulations
may be different in application, it is not different in kind. We agree only in a limited way.
{16} “The primary purpose of statutory construction is to discern and give effect to the
intent of the [L]egislature.” Medina v. Berg Constr., Inc., 1996-NMCA-087, ¶ 26, 122 N.M.
350, 924 P.2d 1362. “We do so by first looking to the statute’s plain language and giving
effect to the plain meaning of the words therein.” Cook v. Anding, 2008-NMSC-035, ¶ 7,
144 N.M. 400, 188 P.3d 1151. We also examine “the history of the statute and the object
and purpose the Legislature sought to accomplish.” Maes v. Audubon Indem. Ins. Group,
2007-NMSC-046, ¶ 11, 142 N.M. 235, 164 P.3d 934. We will not construe a statute in a
manner that will render the statute’s application absurd or unreasonable or will lead to
injustice or contradiction. Id.
{17} We begin our analysis of the legislative intent of Section 72-2-9.1 by looking at the
Legislature’s language. See Cook, 2008-NMSC-035, ¶ 7. Section 72-2-9.1(B) requires the
State Engineer to adopt rules for priority administration. The legislative language does not
9
specify the scope of such rules. In Section 72-2-9.1(A), the Legislature recognizes the urgent
need for water administration and specifically states that the State Engineer “has authority
to administer water allocations in accordance with the water right priorities recorded with
or declared or otherwise available to the [S]tate [E]ngineer.” This statement purports to
recite the authority of the State Engineer; it does not grant additional authority. From the
plain language of this statement, we infer that the Legislature believed that the State
Engineer already had the necessary authority to adopt rules to administer water right
priorities in accordance with the Legislature’s intent in enacting Section 72-2-9.1 and that,
as a result, the Legislature did not need to expand upon the State Engineer’s authority in
order to accomplish its purpose.
{18} As established above, the Legislature has granted the State Engineer the authority to
determine the elements of water rights pertaining to appropriation and use in connection with
licenses, permits, transfers, and forfeiture. Further, Section 72-2-9 authorizes the State
Engineer to supervise “the apportionment of water in this [S]tate according to the licenses
issued by him and his predecessors and the adjudications of the courts.” The AWRM
regulations direct the State Engineer to determine priorities of water rights for the purpose
of curtailing certain rights in the event of a shortage relying not only upon the adjudications
of the courts and licenses issued by him, but also upon other evidence available to him, such
as subfile orders entered by an adjudication court, offers of judgment, permits issued by the
State Engineer, or evidence resulting from a hydrographic survey. 19.25.13.27 NMAC.
None of the statutory provisions discussed above, nor any published decision addressing
them, suggests that the State Engineer has authority to engage in an inter se process or to
determine priorities for the purpose of curtailing rights from evidence other than adjudication
decrees or licenses.1
{19} Historically, the Water Code has provided for the determination of priorities through
a comprehensive system of adjudication in the courts and through licenses. The adjudication
process entails the “determination of all rights to the use” of waters within a specified stream
system, NMSA 1978, § 72-4-15 (1907), through the joinder of all parties in a single action,
Section 72-4-17, culminating in the filing of a decree establishing the “priority, amount,
purpose, periods and place of use” of the water rights of each party, NMSA 1978, § 72-4-19
(1907). Licenses are issued in the final stage of the water right permitting process, which
involves an initial application to the State Engineer, publication of the application, a protest
period, evaluation by the State Engineer, an administrative hearing, and an appeals process
to the courts. See 72-5-1, NMSA 1978, §§ 72-5-4 (1907) (amended 2001), -5 (1985), -6,
-13, -31 (1909); §§ 72-2-16, 72-7-1, 72-12-3.
1
Because it is not before us, we do not address or express any opinion as to whether
or how our opinion may affect domestic well rights.
10
{20} Although the Legislature expressed its frustration with the speed with which
adjudications proceed, and required the State Engineer to adopt rules, the Legislature did not
broaden the State Engineer’s authority regarding priority administration beyond its existing
scope, as described in Section 72-2-9. As a result, the State Engineer’s authority to adopt
regulations remains limited to the State Engineer’s existing authority. Cf. Sandel, 1999-
NMSC-019, ¶ 30 (holding that the New Mexico Public Utility Commission’s deregulation
of part of the electric power industry was inconsistent with its existing authority and
therefore improperly infringed upon the Legislature’s authority).
{21} With regard to the State Engineer’s authority to engage in priority administration, the
parties have relied heavily on language in State ex rel. Reynolds v. Pecos Valley Artesian
Conservancy District (PVACD), 99 N.M. 699, 663 P.2d 358 (1983). In that case, our
Supreme Court authorized the district court in the course of a formal adjudication to modify
the usual adjudication procedure to allow an inter se process to proceed concurrently with
the ongoing determination of individual water rights. Id. at 700-01, 663 P.2d at 359-60. The
purpose of the expedited procedure was to enable priority administration, and the Court
approved the procedure because due process was properly afforded. Id. at 701, 663 P.2d at
360. The Court nevertheless stressed that “there can be no administration of junior rights
as against senior rights until the parties have had an opportunity to contest priorities inter
se.” Id.; see State ex rel. Reynolds v. Sharp, 66 N.M. 192, 196-97, 344 P.2d 943, 945-46
(1959) (stating that although no decree declaring the elements of water rights can be entered
until after a “hearing to determine the relative rights of the parties, one toward the other,”
the court could bind an owner of water rights before the determination of priorities if there
is “substantial compliance with the requirements of the adjudication statutes”). We
acknowledge that our Supreme Court’s statements in PVACD addressed the question of an
expedited inter se process in the context of a formal adjudication proceeding and were not
directed to the specific issue that is before us in this appeal. 99 N.M. at 700-01, 663 P.2d
at 359-60. We read them, however, as emphasizing the essential nature of a priority
determination as among owners of water rights before the curtailment of rights.
{22} The Legislature also granted the State Engineer the authority to administer rights
based upon licenses, and the licensing process likewise incorporates essential elements of
due process. See, e.g., § 72-5-13. Prior to issuance of a license, a permit application is
published and protests to the application are reviewed by the State Engineer. Sections 72-5-
4, -5, -6; 72-12-3. Although licenses are not commensurate with adjudication decrees, and
license rights are still subject to adjudication—see NMSA 1978, §§ 72-4-13 (1982), -
15—licenses and post inter se adjudication decrees can be distinguished from the other
forms of evidence enumerated in 19.25.13.27 NMAC. Both result from a process that
incorporated procedures to allow parties to object and to be afforded the opportunity for a
full hearing prior to administration. This process is consistent with the intent expressed in
the original water code of 1907. Although water masters were given the responsibility of
apportioning water in the state, that responsibility could only be exercised after water rights
had been fully determined. See 1907 N.M. Laws, ch. 49, § 14 (current version at NMSA
1978, Section 72-3-2 (1907) (amended 2007)) (“The water master shall have immediate
11
charge of the apportionment of waters in his district under the general supervision of the
territorial engineer, and he shall so appropriate, regulate and control the waters of the district
as will prevent waste.”); 1907 N.M. Laws, ch. 49, § 58 (“No water master shall be appointed
under this act, until the prior rights to the use of water have been determined in one or more
stream systems in this Territory under the provisions of this act.”) (emphasis added)
(repealed by 1941 N.M. Laws, ch. 126, § 28).
{23} In contrast, the other forms of evidence enumerated in the regulations, including
subfile orders and offers of judgment issued prior to inter se proceedings, hydrographic
surveys, and permits, have not been subject to general review and objection by others.
Although the regulations do provide for an objection and appeals process, this process
appears limited to the owner of the administrable water right, and “[f]iling of an objection
to an administration date will not stay the [S]tate [E]ngineer’s administration by
administration date.” 19.25.13.30 NMAC; see 19.25.13.27 NMAC (“Filing of an objection
to the water master district manager’s determination of an administrable water right will not
stay the [S]tate [E]ngineer’s administration based upon that determination[.]”).
{24} The State Engineer argues that PVACD is not relevant to our analysis because at the
time PVACD was decided, the Legislature had not directed the State Engineer to perform
interim priority administration as it has done in Section 72-2-9.1. We agree and note that
this argument underscores the point that prior to the enactment of Section 72-2-9.1, the State
Engineer did not have the statutory authority to act in the manner set forth in the AWRM
regulations.
{25} The State Engineer additionally points to certain language contained in State ex rel.
Office of State Eng’r v. Lewis, 2007-NMCA-008, 141 N.M. 1, 150 P.3d 375 (filed 2006), as
authority for the promulgation of the challenged regulations. Specifically, in Lewis, this
Court noted that “the water resource management approach” is consistent with the
adjudicatory authority of the courts. Id. ¶ 57. But the type of administrative activity
contemplated by the regulations at issue in this case is entirely distinct from the court-
approved negotiated settlement approach addressed in Lewis. The State Engineer focuses
on a statement in Lewis and argues that Section 72-2-9.1 is designed “for the State Engineer
to address in certain specified ways the urgent need for water administration outside of the
adjudication process.” Lewis, 2007-NMCA-008, ¶ 58. However, this statement says nothing
about the State Engineer’s authority to determine priorities. And, as a whole, Lewis confirms
the courts’ broad authority to resolve water right disputes through the adjudicatory process,
rather than any pre-Section 72-2-9.1 authority on the part of the State Engineer to determine
priorities. We are unpersuaded that Lewis establishes any precedent for the State Engineer’s
position.
{26} We thus reach the conclusion that, based upon the statutory language and the
historical authority of the State Engineer, the Legislature did not intend Section 72-2-9.1 to
provide the State Engineer with the additional power of determining water right priorities
as among water rights owners and to curtail water usage based upon such administrative
12
determinations. See El Paso & R. I. Ry. Co. v. Dist. Court of Fifth Judicial Dist., 36 N.M.
94, 101, 8 P.2d 1064, 1068 (1931) (“This [C]ourt has always recognized that the jurisdiction
of the [S]tate [E]ngineer to control and administer appropriation and use is no broader than
as expressed in or necessarily to be inferred from the statute.”). By enacting Section 72-2-
9.1, the Legislature indicated its desire that priority administration not be left entirely to the
State Engineer’s discretion under Section 72-2-8; and it required the State Engineer to take
action to address priority administration. However, Section 72-2-9.1 did not expressly
authorize the State Engineer to make such determinations beyond adjudication decrees and
licenses necessary to carry out the AWRM regulations.
{27} Read in isolation, Section 72-2-1 might seem to include this authority. However,
when read in the context of the Water Code, and in particular with Section 72-2-9, it does
not. Section 72-2-1 states the State Engineer’s general supervisory authority; section 72-2-9
is specific as to the authority addressed by the Legislature in Section 72-2-9.1 and restricts
the State Engineer’s general supervisory authority to apportion the waters of the state to
licenses and court adjudications. If we were to give effect to Section 72-2-1 at the expense
of Section 72-2-9, we would not be reading the two sections harmoniously and would render
Section 72-2-9 meaningless. See State v. Wilson, 2010-NMCA-018, ¶ 9, 147 N.M. 706, 228
P.3d 490 (filed 2009) (“[S]tatute[s] must be read as a whole, construing each section so as
to produce a harmonious whole.”), cert. denied, 2010-NMCERT-001, 147 N.M. 673, 227
P.3d 1055; City of Deming v. Deming Firefighters Local 4521, 2007-NMCA-069, ¶ 23, 141
N.M. 686, 160 P.3d 595 (“We . . . do not give effect to legislative intent by reading a statute
in a way that would render it meaningless.”). As a result, we disagree with the State
Engineer’s argument that Section 72-2-1 has always given his office the broad longstanding
authority to apportion waters in this state beyond the limitation of licenses and court
adjudications identified in Section 72-2-9.
{28} Based upon the scope of the task involved, the existing adjudication statutes, and
case law limiting the State Engineer’s authority to administer priorities until after
adjudication, had the Legislature wished to grant the State Engineer such authority for
determining priorities, it would have done so in direct, clear, and certain terms, rather than
merely directing the State Engineer to adopt regulations consistent with the State Engineer’s
existing authority. See City of Roswell v. Smith, 2006-NMCA-040, ¶ 12, 139 N.M. 381, 133
P.3d 271 (stating that if the Legislature had wished to include additional language in a
statute, it could have done so); see also In re Petition of PNM Gas Servs., 2000-NMSC-012,
¶ 73, 129 N.M. 1, 1 P.3d 383 (presuming that the Legislature is aware of existing law,
including agency rules); Sims v. Sims, 1996-NMSC-078, ¶ 24, 122 N.M. 618, 930 P.2d 153
(presuming that the Legislature is well informed about existing common law when they
enacted a statute).
{29} This gap between the Legislature’s grant of authority to the State Engineer and the
State Engineer’s adoption of the AWRM regulations presents a separation of powers
problem under Article III, Section 1 of the New Mexico Constitution. An administrative
agency infringes upon the separate powers of the Legislature if it exceeds its statutory
13
authority and case law when adopting regulations. Sandel, 1999-NMSC-019, ¶ 12. The
district court specifically referenced this problem in connection with “the hierarchy of
evidence for determining priorities” in 19.25.13.27 NMAC. According to the district court,
this AWRM regulation was flawed to the extent that it allowed the State Engineer to
consider forms of evidence beyond those already allowed under existing statutes. Thus, the
district court concluded that the State Engineer had the statutory authority to consider
decrees, subfile orders, and offers of judgment of a water right adjudication court, as well
as the State Engineer’s issued licenses, as contemplated by 19.25.13.27(A), (B), (C), (E)
NMAC.
{30} We clarify that the State Engineer has the statutory authority to consider adjudication
decrees and its own licenses, but not subfile orders or offers of judgment filed in an
adjudication. Nor does the State Engineer have the authority to consider hydrographic
surveys or permits as contemplated by 19.13.25.27(D) and (F) (NMAC). Because the
Legislature did not expand upon the State Engineer’s authority when enacting Section 72-2-
9.1, the State Engineer exceeded his authority by promulgating 19.25.13.27 NMAC,
permitting him to determine priorities using other forms of evidence for the purpose of
curtailment of rights.
{31} We again emphasize that our holding does not mean that the Legislature does not
have the authority to grant the State Engineer the ability to promulgate regulations such as
those at issue. The Legislature created the existing system in which priority administration
as contemplated by the AWRM regulations follows the opportunity for inter se contest. The
Legislature may change the system. Because the Legislature did not expand upon the State
Engineer’s existing authority, the State Engineer infringed upon the Legislature’s
prerogative by making such a unilateral change by administrative regulations.
{32} In the foregoing analysis, we have inferred from the Legislature’s language that it
intended the State Engineer to adopt rules for priority administration based on the State
Engineer’s existing authority to administer water allocations, and we have concluded that
paragraphs (B), (C), (D), and (F) of 19.25.13.27 NMAC exceed that existing authority. We
now consider whether the Legislature’s mistaken expression of the State Engineer’s historic
authority can overcome the effect of its specific language.
{33} The issue centers on the legislative statement in Section 72-2-9.1(A) that “the [S]tate
[E]ngineer has authority to administer water allocations in accordance with the water right
priorities recorded with or declared or otherwise available to the [S]tate [E]ngineer.” We
note that this statement is not one of fact, but rather, is a conclusion as to the state of the law
regarding the State Engineer’s authority. See Ryan v. Gonzales, 114 N.M. 346, 348, 838
P.2d 963, 965 (1992) (stating that the Supreme Court will accord strong deference to
legislative findings but must nevertheless rule on issues of constitutionality). As we have
discussed, this statement is the premise for the State Engineer’s adoption of 19.25.13.27
NMAC. Yet, as we have concluded, this language does not correctly express the existing
law.
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{34} As a consequence, we perceive a statutory flaw that undercuts the validity of
19.25.13.27 NMAC. If the Legislature intended that the State Engineer expedite priority
administration by adopting rules such as those set forth in 19.25.13.27 NMAC because it
believed that it had already conveyed such authority to the State Engineer, or that the State
Engineer otherwise had such authority under existing law, it acted on a faulty premise. The
Legislature’s mistaken recitation of such authority does not grant the authority. See Whitney
v. California, 274 U.S. 357, 374 (1927) (“[W]here a statute is valid only in case certain
conditions exist, the enactment of the statute cannot alone establish the facts which are
essential to its validity.” (Brandeis, J., concurring)), overruled on other grounds by
Brandenburg v. Ohio, 395 U.S. 444, 449 (1969) (per curiam).
{35} Therefore, even if the Legislature had intended that the State Engineer adopt a
regulation such as 19.25.13.27 NMAC, the Legislature did not provide the statutory
framework for the State Engineer to do so, and the regulation unconstitutionally exceeds the
State Engineer’s authority. The authority of an administrative body to enact regulations
extends not only to the powers expressly provided by the Legislature, but also to those that
can be fairly implied from such powers, Redman v. Bd. of Regents of N.M. Sch. for Visually
Handicapped, 102 N.M. 234, 237, 693 P.2d 1266, 1269 (Ct. App. 1984). But in this case,
the Legislature had not previously even impliedly extended the authority reflected in
19.25.13.27 NMAC. We cannot stretch this mistaken legislative assumption into the
establishment of an implied grant of power.
DUE PROCESS
{36} The district court held that portions of the AWRM regulations violate due process
protections, premised essentially on principles of procedural due process, focusing on notice,
the presentation of evidence, and judicial review. In light of our holding that the Legislature
has not granted the State Engineer the authority necessary to administer priorities derived
from evidence other than post-inter se adjudication decrees and licenses, we consider it
speculative to address issues of due process when the regulations not only have not yet been
applied but also, based on our holding, will not be applied in their current form.
CONCLUSION
{37} For the foregoing reasons, we conclude that the State Engineer’s regulation
contemplating the determination and enforcement of priorities, specifically 19.25.13.27 (B),
(C), (D), and (F) NMAC, exceeds the scope of authority delegated by the Legislature and
offends principles of separation of powers. We affirm the district court’s limitation of
19.25.13.27 NMAC to court adjudication decrees and licenses issued by the State Engineer.
We reverse the district court’s conclusion that subfile orders and offers of judgment filed in
adjudication cases may be considered in the application of 19.25.13.27 NMAC .
{38} IT IS SO ORDERED.
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______________________________________
MICHAEL D. BUSTAMANTE, Judge
WE CONCUR:
______________________________________
CYNTHIA A. FRY, Chief Judge
______________________________________
TIMOTHY L. GARCIA, Judge
Topic Index for Tri-State Generation v. D’Antonio, Docket No. 27,802
AL ADMINISTRATIVE LAW AND PROCEDURE
AL-AA Administrative Appeal
AL-AL Administrative Law, General
AL-DP Delegation of Powers
AL-DU Due Process
AL-JR Judicial Review
AL-LI Legislative Intent
AL-SR Standard of Review
AE APPEAL AND ERROR
AE-SR Standard of Review
CT CONSTITUTIONAL LAW
CT-DP Due Process
CT-SP Separation of Powers
GV GOVERNMENT
GV-SE State Engineer
NR NATURAL RESOURCES
NR-WL Water Law
ST STATUTES
ST-IP Interpretation
ST-LI Legislative Intent
ST-RC Rules of Construction
16