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Protecting Resources for Land-Based People: The New Mexico Water-Transfer Conundrum

By David Benavides

The struggles of those in rural poverty in New Mexico are at once similar to and very different from those in rural and urban poverty elsewhere in America. Alongside the familiar realities of few employment opportunities, low wages, poor schools, lack of quality housing, and drug and alcohol addiction is a struggle to maintain ownership and control over land and water resources that determine whether many families will have enough food and income to make ends meet. New Mexico Legal Aid’s Land and Water Project works with two types of groups—mercedes and acequias—that are key in this increasingly significant struggle.

Water Rights in New Mexico

Protecting water rightsFor 300 years after Spanish settlement, Hispano communities survived in a noncash economy by placing the ownership and management of land and water under the community through two institutions, the merced and the acequia. The merced, or community land grant, contained the all-important common lands that surrounded the villages and were freely accessible to all land-grant residents. The common lands typically occupied a variety of elevation levels and ecological zones and, combined with the privately held cropland, supplied the array of range, farm, water, forest, and wildlife resources critical for the success of small-scale family farming and stock raising in a semiarid environment. The acequia is both the gravity-operated community irrigation ditch system and the governing entity charged with equitable distribution of irrigation water to community members.

Today few people in those predominately Hispano communities farm and raise livestock full-time. But low-income New Mexicans have continued to rely on their ability to produce food and income from their small plots of irrigated land and, in some cases, from what remains of the common lands of their community land grants. This resource base and the traditional skills that have been maintained form a tangible safety net in these communities.

The current threat to rural communities and acequias is not losing land and water to a bank or mortgage company. Rather, the danger lies in the threats to water and water rights in a desert state with a growing population. The state’s entire annual water supply is already fully allocated to those with senior water rights, such as the acequias and their members and the various tribes and pueblos. New amounts of water have been created by various reservoir projects and other water-extraction or water-importation schemes that have supplied municipalities and other large-scale users, but those sources are also now fully allocated. No surplus water is available to allocate to a new industrial project, a new housing development, or any other new commercial or municipal purpose. Those new projects can have water only to the extent that they obtain and transfer water rights, discontinuing the former use of the water to supply the new use of water, while theoretically keeping the hydrologic system whole.

The problem with simply moving water rights around in this way is that any large-volume water-rights transfer is almost certain to harm the area where the water was formerly used. Like a region with a healthy tax base, a southwestern community with a decent base of water rights, even if it is otherwise poor, possesses a key ingredient for its own survival and future economic activity. Acequias require member-labor and little in the way of cash to maintain and operate, although modest dues are typically assessed. In contrast, the loss of water rights can be a death knell for a region. Every community understands that water symbolizes community continuity and self-determination. The last thing a community with a high level of poverty needs is to lose a significant portion of its water rights. Every water right that is lost to a transfer means the removal of member-labor and dues for that acequia system. A series of transfers could quickly overburden the remaining parciantes (members) and threaten the very viability of the acequia.

More than anything, water transfers remind acequia communities that a foreign law has supplanted community management of land and water. Under Spanish and Mexican law, water rights belonged to the community and could not be severed from the land and the community and transferred away. That an individual can do so over the objection of the community repeats the bias in American law that favors individual rights over community needs and that resulted in the loss of common lands on many land grants. As a result, acequia communities are passionate about preventing the transfer of water rights and about maintaining the viability of their traditional systems.

New Mexico Legal Aid’s Support of Traditional Water Rights

Community WaterNew Mexico Legal Aid’s Land and Water Project, begun in the 1980s, initially focused on assisting acequias in stream-adjudication suits to gain legal recognition of their water rights. The New Mexico Acequia Association was formed in the 1990s under the brilliant leadership of Paula Garcia, unifying acequias and strategically acting on their behalf. Working as partners, New Mexico Legal Aid and the New Mexico Acequia Association took on many of the compelling issues that were frustrating acequias at the time.

We have worked most on the perennially thorny issue of water transfers out of acequia communities. Until 2003 the Office of the State Engineer had exclusive permitting jurisdiction over these water transfers through administrative proceedings that were open to objection and litigation by opponents of a proposed transfer. The laws relating to water transfers, and in fact the water laws generally, purported to protect the interests of longtime water-right holders such as acequia members, but in reality the laws were disturbingly malleable. The decisions by the Office of the State Engineer reflected a de facto policy in which transfers were market-driven and third-party effects were downplayed. Powerful political and economic forces have historically succeeded in shifting water rights to the faster-developing areas of the state, away from agriculture and poorer and more rural areas.

In the early 1990s our role was simply to represent acequias opposing specific proposed water transfers in state engineer administrative proceedings. We focused on the “public welfare,” one of the three statutory criteria under which every proposed water transfer was supposed to be evaluated (see N.M. Stat. Ann. §§ 72-5-23, 72-5-24 (2012)). Our strategy was to shape the definition of “public welfare” through a series of cases so that negative effects on acequias and acequia communities would weigh strongly against a proposed transfer. Our results were mixed, primarily because the Office of the State Engineer, in trying to duck the “public welfare” issue altogether, gave mixed messages over the course of several administrations as to what the “public welfare” meant. In some cases the Office of the State Engineer ruled that local governing bodies were in a better position than the state to evaluate the public welfare in a particular case (see, e.g., Findings and Order at 14, In the Matter of the Application of Intel Corporation to Appropriate the Underground Waters of the State of New Mexico in the Rio Grande Underground Water Basin, Application Nos. RG-57125, RG-57125-S, RG-57125-S-2 (N.M. Office of State Eng’r June 10, 1994)). Therefore our solution often was to get the local county commission to adopt a “public welfare resolution,” citing the negative effects of water transfers on acequia communities in the county. That approach saw some success, particularly in rural counties with large numbers of acequias, but ultimately the Office of the State Engineer’s treatment of “public welfare” was too inconsistent and ad hoc. We considered whether appeals were likely to reverse decisions based on such a subjective standard.

As alarming as the state’s unpredictable and often-negative treatment of the public-welfare standard, the only public notice of a proposed water transfer was by publication. Applicants seeking to transfer water were deliberately publishing their notices in the most obscure publication that met the statutory criteria, so as to minimize the chance that a timely objection would be filed. The Office of the State Engineer, which was beginning to have a large backlog of protested water transfers, supported this minimal notice. From its perspective, minimal public notice kept the lid on the number of lengthy contested transfer proceedings. The agency claimed that better notice was unnecessary and promised to do its duty and protect the public interest even if no one objected. The result of notice-by-publication, however, was transfer-by-stealth, that is, water transfers approved by the Office of the State Engineer out of acequia communities when the acequia was not aware of the proposed transfer until it was too late to object. This lackluster notice implicated constitutional notice and due process rights of the acequias and other water-right owners.

Our approach to the notice problem was Client Discussiontwofold. First, we remained alert for a good test case to challenge the constitutionality of the statutory published-notice provisions. The U.S. Supreme Court held that published notice is constitutionally inadequate where the identities and whereabouts of potentially affected persons are reasonably ascertainable (Mullane v. Central Hanover Bank and Trust Company, 339 U.S. 306 (1950)). Those persons are entitled to direct notice, either by service or by mailing. Second, we tried to add a requirement to the statute that notice be mailed to the nearest water-right owners and water distribution entities (such as acequias), creating an additional notice requirement more in line with Mullane. Acequia leaders helped pass such a bill in the state legislature in 1995 (see S.B. 149, 42d Leg., 1st Sess. (N.M. 1995)). However, the bill was promptly vetoed by Gov. Gary Johnson (S. Exec. Message No. 47, 42d Leg., 1st Sess. (N.M. April 5, 1995)). Acequia advocates continued through 2002 to work to pass such legislation but found little success because of opposition by the Office of the State Engineer. For more than a decade, as people sought to transfer water rights without adequate public notice, we worked to expose and challenge those practices:

  • New Mexico Legal Aid highlighted the Office of the State Engineer’s unlawful practice of concealing water transfers by calling them something else. A “dedication” permitted a new water right, on the condition that the applicant later would bring water rights that would be “retired” and “dedicated” to offset the effects of the new water right. The state engineer claimed that because a “dedication” was not a transfer, no notice was required as to which water rights were being “retired.” The state attorney general disagreed, and the state engineer had to discontinue the practice (Op. N.M. Att’y Gen. No. 94-07, revised (1994)).
  • Similarly the Office of the State Engineer was granting “emergency” transfer permits for changes in water use (e.g., from agriculture to a nonagricultural use), with public notice after the fact. However, the emergency transfer statute does not apply to changes in use. New Mexico Legal Aid appealed a case in which the Office of the State Engineer granted such an emergency transfer permit from an acequia. The applicant withdrew its application while the appeal was pending.
  • State law formerly allowed the condemnation of water rights—a blunt instrument by which governmental entities might acquire and transfer water rights as a matter of right without going through administrative approval. The Acequia Association collaborated with other water users to change the statute to prohibit municipal condemnation of acequia and other water rights.

As development pressures in the state increased, water transfers that had been understood to be illegal were suddenly being attempted. For decades in numerous public meetings, the Office of the State Engineer had assured acequia members that a veritable legal barrier disallowed water rights from being transferred from the Upper Rio Grande basin to the Middle Rio Grande basin. The barrier was supposed to be implied in the Rio Grande Compact, which set the rules for dividing the waters of the Rio Grande among three states and Mexico. This barrier was not only practical but also symbolic. The Upper Rio Grande valley contains the greatest concentration of acequias in the state; the Middle Rio Grande is home to three of New Mexico’s four largest cities (Albuquerque, Santa Fe, and Rio Rancho). The supposed barrier against transfers from one section of the river to another not only shielded the northern acequia water rights from acquisitions by those cities, but symbolically it shielded the acequia culture itself from piecemeal dissolution through a series of water transfers by some of the most powerful political and economic forces in the state.

We were surprised then in 1997 to see notice of a high-volume, high-stakes water transfer that would have transferred water rights from near the Colorado border to a proposed new water supply system for Santa Fe County—crossing that supposedly uncrossable barrier. New Mexico Legal Aid assisted pro bono counsel and immediately assisted a large number of acequias and acequia members in filing objections.

While the case was pending, the New Mexico Acequia Association and our program came to several understandings with the leadership of both the city and county of Santa Fe. Santa Fe’s unique tourist economy depends on the existence—if not the well-being—of the rural Hispano and pueblo communities in the Upper Rio Grande valley north of Santa Fe and the traditional cultural activities that take place in those communities. Once the city understood that the proposed county transfer could set a dangerous precedent, the city became an ally of the acequias in some respects. First, the city committed to a binding provision that the city and county would not seek permanent transfer of agricultural water rights from the Upper Rio Grande. The city and county then modified the location of their new joint water project and resolved the immediate threat and the adverse precedent it would have set. Second, borrowing a page from our previous “public welfare” strategy, the New Mexico Acequia Association, supported by the city, successfully lobbied for a legislative memorial resolving that “it is detrimental to the public welfare of the state of New Mexico” for the Office of the State Engineer to allow water rights to cross the boundary separating the Upper and Middle Rio Grande (H.J. Memorial 6, 45th Leg., 1st Sess. (N.M. 2001)). Third, both the Santa Fe City Council and the Santa Fe County Commission introduced “acequia self-determination” ordinances whereby the city or county would drop a proposed water-right transfer from an acequia if the acequia did not approve it.

A Statewide Change

Water workerPolitically Santa Fe was a good place to launch the idea that acequias should have decision-making authority over transfers. We envisioned a multiyear campaign to gain wider acceptance for this notion in other parts of the state. We were hardly prepared therefore for a meeting called by the state engineer in 2002 in which he asked if we would be interested in working with him to develop a statewide regulation to give any acequia in the state decision-making authority over transfers, as long as the acequia adopted that decision-making authority into its bylaws.

We were certainly interested but were confused by the state engineer’s willingness to share his authority over water transfers. We then realized that we and our clients can create this type of “luck” when we make clear to those in power that we will not go away. We had demonstrated that we would challenge every legal infraction that compromised the interests of the acequias, that we would protest every transfer that would negatively affect acequias even if it slowed the administrative hearing process, that acequias’ allies would go to the legislature until appropriate bills were passed, and that we would find good test cases and appeal any bad administrative decisions and violations of due process. The Office of the State Engineer realized it would save resources by not fighting with us at every turn and by allowing the acequias to make their own decisions over water rights in their communities.

In 2003 New Mexico enacted, with no opposition from the Office of the State Engineer, a new law giving acequias authority over water transfers (N.M. Stat. Ann. §§ 73-2-21(E), 73-3-4.1, 72-5-24.1 (2012)). The law authorizes each acequia to adopt it into its bylaws. Applications for transfer are then made to an acequia’s three-person elected acequia comisión. The comisionados must evaluate whether the proposed transfer will be “detrimental to the acequia or its members” and may deny the transfer if it finds such detriment. If an acequia denies a proposed transfer, the Office of the State Engineer is not allowed to consider that transfer; the acequia decision is final unless appealed to the district court under an arbitrary, capricious, or “not in accordance with law” standard of review.

With this one new law, the water-transfer problems that had plagued acequias became manageable. Applications to the Office of the State Engineer are still published, but transactions involving acequia water rights now come directly to the acequia first—not the Office of the State Engineer—through the acequia’s own application process. The same is true of emergency transfers and water leases; anything acequia-related that formerly went before the Office of the State Engineer now comes before the acequia comisión. In the event of a proposed transfer from an Upper Rio Grande basin acequia to the Middle basin, the affected acequia could decide how much weight to give to the legislative memorial or could raise its own concerns about the potential detriment of such a transfer. The task of shaping and defining the “public welfare” implications of water transfers in New Mexico has shifted from a reluctant state engineer to eager acequias. In reviewing whether a proposed transfer might be “detrimental,” acequia commissioners do not shy away from discussing any effects of the transfer on the viability of the acequia, on acequia culture, or on the resource base of the community—insightful commentaries that were never included in the state engineer’s written decisions.

Ongoing Work with Acequias

Riverscape New Mexico Legal Aid remains fully involved with acequias. The passage of the acequia transfer law opened a new chapter of activity for us and the New Mexico Acequia Association. Since 2004, we have attended numerous acequia meetings in which acequias have debated and voted to adopt the new powers into their bylaws.

We have likewise assisted acequias in handling dozens of water transfer applications under their new authority. Acequias’ meetings have never received attention in the press or outside the community, but now acequias are charged with making fairly high-stakes decisions that go beyond the traditional problem of water-supply allocation. Because an aggrieved party can appeal an acequia commission’s water-transfer decision, New Mexico Legal Aid routinely helps commissions conduct their proceedings and draft their decisions so as to withstand any challenge on appeal.

We represented an acequia commission in the first legal attack by a developer on the statute, and we won a favorable reversal in the New Mexico Court of Appeals on the proper standard of review of an acequia decision under the new law (Peña Blanca Partnership v. San José de Hernández Community Ditch, 202 P.3d 814 (N.M. Ct. App. 2009)). Acequia water transfer decisions have a more deferential standard of review than the state engineer’s decisions, which are reviewed de novo in the state district court. A developer whose transfer application was denied by the local acequia attacked the new statute’s deferential standard of review on equal protection grounds, arguing on appeal that those decisions should be reviewed de novo as well. The state district court agreed with the developer’s analysis, but the court of appeals, reversing the district court, held rational the legislature’s decision to confer a more deferential standard of review on an entity that better knew the local irrigation system and the probable effects of a proposed transfer. That case is on remand to the district court on issues of “takings” and due process. No other attacks on the statute have succeeded, but we expect to work with the New Mexico Acequia Association to implement and defend the transfer law for a long time to come.

David Benavides

David Benavides
Director, Land and Water Project
New Mexico Legal Aid
P.O. Box 5175
Santa Fe, NM 87502
505.982.9886 ext. 6

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