Tri-State Generation & Transmission Ass'n v. D'AntonioTri-State Generation & Transmission Ass'n v. D'Antonio
{1} We are presented in this case with a challenge to the validity of
BACKGROUND
{2} In 2003, the Legislature enacted
A. The [LJegislature recognizes that the adjudication process is slow, the need for water administration is urgent, compliance with interstate compacts is imperative and the [Sjtate [E]ngineer has authority to administer water allocations in accordance with the water right priorities recorded with or declared or otherwise available to the [Sjtate [EJngineer.
B. The [Sjtate [Ejngineer 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
[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) NMAC 19.25.13.27’s list of the hierarchy of evidence for administrable water rights violatesN.M. Const, art. Ill, § 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 priоrities by curtailing “junior” water rights, or rights established later in time, when water shortages threaten senior appropriators. See
{4} Administrative Code 19.25.13.27 describes the process the State Engineer must follow when determining priority.
A. a partial final decree or a final decree entered by an adjudication court of competent jurisdiction, subject to any [SJtate [EJngineer permit issued subsequent to entry of said adjudicatiоn 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) orNMSA 1978, Section 72-4-16 (1919)]; or, if no hydro-graphic survey has been filed, then;
E. a license issued by the [SJtate [EJngineer; or, if no license has been issued, then[;J
F. a permit issued by the [SJtate [EJngineer, accompanied by proof of actual beneficial use; and
G. a determination made by the [SJtate [EJngineer based on the best available evidence, consisting of, whеre available, any filings with the office of the [SJtate [EJngineer, 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 [SJtate [EJngineer’s determination of an administration date informally with the [SJtate [EJngineer’s district office. If such informal negotiations fail, the [SJtate [EJngineer shall hear objections to his determination of an administration date in accordance withSection 72-2-16 NMSA . Filing of an objection to an administration date will not stay the [SJtate [EJngineer’s administration by administration date, pending resolution of the objection. Appeals from decisions of the [SJtate [EJngineer shall be in accordance with Section 72-7- ![•]
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
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 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
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,
{8}
{9} Other statutory provisions grant the State Engineer the power to grant permits and licenses. See
{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 thе change will impair existing rights. See
{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.,
{13} In order to evaluate beneficial use, the State Engineer must assess the quantity, place of use, and purpоse to which water has actually been applied. See State ex rel. Martinez v. McDermett,
{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,
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
{16} “The primary purpose of statutory construction is to discern and give effect to the intent of the [Legislature.” Medina v. Berg Constr., Inc.,
{17} We begin our analysis of the legislative intent of
{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,
{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
{21} With regard to the State Engineer’s authority to engage in priority administratiоn, the parties have relied heavily on language in State ex rel. Reynolds v. Pecos Valley Artesian Conservancy District (PVACD),
{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.
{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, hydro-graphic 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 “[fjiling of an objection to an administration date will not stay the [Sítate [E]ngineer’s administration by administration date.”
{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
{25} The State Engineer additionally points to certain language contained in State ex rel. Office of State Eng’r v. Lewis,
{26} We thus reach the conclusion that, based upon the statutory language and the historical authority of the State Engineer, thе Legislature did not intend
{27} Read in isolation,
{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,
{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 authority and case law when adopting regulations. Sandel,
{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 adjudiсation. Nor does the State Engineer have the authority to consider hydro-graphic 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
{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
{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
{33} The issue centers on the legislative statement in
{34} As a consequence, we perceive a statutory flaw that undercuts the validity of
{35} Therefore, even if the Legislature had intended that the State Engineer adopt a regulation such as
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-mfer 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 cоnclude that the State Engineer’s regulation contemplating the determination and enforcement of priorities, specifically
{38} IT IS SO ORDERED.
Notes
. 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.