SANTA FE, N.M. (KRQE) – As the saying goes, “water is for fighting.” And in a state with deep agricultural roots, water is always a contentious topic in New Mexico politics. Now, the debate is heating up over a bill clarifying water lease rules.

Across the state, pretty much every drop of water is owned and accounted for. So what happens when a newcomer, such as a construction project, needs water? State law allows water rights to owners to lease their water. But a bill under consideration at the Roundhouse would tighten the rules on such leases.

In essence, House Bill 121 would put an end to the Office of the State Engineer’s past practice of granting “preliminary approvals” of water leases, according to an analysis by the Legislative Finance Committee (LFC). For a while, the State Engineer has been preliminarily approving water leases before conducting full hearings, where rights owners can protest the lease, according to the LFC. The idea is that if a hearing ultimately denies the lease, the preliminary lease simply pays back the water, no harm, no foul.

This “preliminary approval” process has been used to meet the water demands of the oil and gas industry, the LFC notes. It’s also been used for construction projects and as a way to meet stream flow minimums under the Endangered Species Act.

Fighting over “preliminary approvals”

Naturally, New Mexicans are divided on the bill that would end the “preliminary approval” loophole. “A major problem with granting “preliminary approval” of a water lease application before the protestants [or rights owners] are granted a hearing is that the use of water commences immediately,” the New Mexico Acequia Association said in their analysis of the bill. “If eventually, the protestants prevail in their protest, then the water that was used by the applicant can never be repaid.”

And, of course, the co-sponsor of the bill agrees that the “preliminary approval” process is an issue: “That is a practice that is nowhere to be found in statute. It is the full just the creation of the Engineers Office, and what it allows the state engineers to do is it, in our opinion, creates a situation where the engineers in fact, violating the due process of water rights holders,” Rep. Christine Chandler (D-Los Alamos) said in a House Energy, Environment and Natural Resources Committee.

Rep. Candy Spence Ezzell (R-Roswell) saw the issue differently. “Whenever we have farmers that are fixing to lose their crops because they have run out of water . . . it will probably now take a hearing that can take up to 60 days for them to be able to do a temporary transfer [of water rights],” she said during a House Agriculture, Acequias and Water Resources Committee.

“I am really, really bothered by that, whenever we have farmers out there that are faced with constraints like this, and they’re looking at losing their crops not being able to pay back the bank loan or FSA loan,” Ezzell explained. “Whenever they can’t pay their suppliers and whenever they can’t pay their bills, there’s a problem.”

Is the State Engineer authorized to do “preliminary approvals?”

The fact is the State Engineer has been granting “preliminary approvals.” According to Rep. Chandler, they’ve been doing it since about 2015. But does state law allow them to?

The state’s Attorney General says no. “There is no explicit or clearly implicit authority for the State Engineer to issue a preliminary approval or authorization of an application to lease water under New Mexico’s Water-Use Leasing Act or related statutes,” the opinion of Attorney General Raúl Torrez says.

Nat Chakeres, the General Counsel at the State Engineer’s office noted that there’s some debate over the legality: “We can talk about sort of the legal nitty-gritty of our interpretation of the water use Leasing Act versus other interpretations,” Chakeres said in a House Energy, Environment and Natural Resources Committee meeting. “I’m not going to do that right here and right now, but what I wanted to say is we do recognize, very strongly, the need to protect exists all existing water rights owners.”

The legal debate has already been argued, to some extent, in court. During one 2019 case, a New Mexico District Court judge ruled that the State Engineer couldn’t grant a “preliminary approval.” The State Engineer then appealed that decision to the New Mexico Supreme Court, then voluntarily dismissed the appeal.

So, there’s some question about legality, but are “preliminary approvals” hurting anyone?

“I haven’t seen any allegation, even, that somebody has been prevented from using their water right as a result of a temporary lease of water that was preliminarily approved,” Chakeres from the State Engineer’s office says. And some people say the “preliminary approvals” are even helpful for boosting the state’s economy.

“What the Leasing Act really allows people to do is economic development,” says Liz Taylor, a water lawyer who represents the San Juan Water Commission and energy companies. Taylor spoke in opposition to House Bill 121 and repeated the idea that no one has been hurt by “preliminary approvals.”

But supporters of the bill say stopping “preliminary approvals” is necessary for protecting New Mexico’s water. In coming years, “the Rio Grande basin can expect to 25% less precipitation,” says Angelina Lopez-Brody, who spoke in favor of the bill. “I stand with this bill because it will help us steward our precious water.”

And supporters say the bill will help keep water rights fair. “Our 35,000 members stand in support of HB 121 to ensure fairness and due process in the way the Office of the State Engineer grants approval of non-emergency water lease applications,” Camilla Feibelman, the director of the Rio Grande Chapter of the Sierra Club, said.