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

SPONSOR Wallace

DATE TYPED 2/7/05

HB 311

SHORT TITLE Surface Mining Act Appeal Provisions

SB

ANALYST Aguilar

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to HB-306

SOURCES OF INFORMATION

LFC Files

Responses Received From

Energy, Mineral and Natural Resources Department (EMNRD)

SUMMARY FOR THE LEGISLATIVE FINANCE COMMITTEE

Synopsis of Bill

House Bill 311 provides two amendments to the Surface Mining Act.

1.

HB311 eliminates one level of appeal of a permitting action taken by the Mining and

Minerals Division (MMD). Currently, a permit decision would have 3 administrative

hearings before it could be appealed to district court. HB311 eliminates the third hearing,

which is the record review appeal hearing before the Coal Surface Mining Commission,

thereby allowing a person to appeal the MMD director decision directly to the district

court.

2.

HB311 also deletes the exemption for state agencies from the attorneys’ fees provision.

A party is allowed to seek reimbursement for its legal costs and attorney fees in an action

under the Act. However, the Mining and Minerals Division Director and the Coal Sur-

face Mining Commission are currently exempted from any assessment of costs or fees.

HB311 eliminates the exemption. The federal Office of Surface Mining has requested

that the Coal Act eliminate this exemption since there is no such exemption in the federal

House Bill 311 -- Page 2

law. The New Mexico Coal Act must remain no less stringent than the federal law.

Significant Issues:

The Energy, Minerals and Natural Resources Department explains the removal of one level of

administrative hearings will streamline the appeal process but still maintain opportunities for all

permitting issues to be heard. All permitting actions will be subject to public notice and an op-

portunity for a public hearing. After the public comment period, the agency will make a permit

decision. That decision can be appealed to the Director of the Mining and Minerals Division

who will hold a de novo public hearing where the public and the permittee can present evidence

and testimony on the issues. Under HB 311, the appeal of the Director’s decision to the Coal

Surface Mining Commission, which would conduct a review of the record from the Director’s

hearing, will be eliminated. HB 311 provides that the Director’s decision can be appealed di-

rectly to the district court.

EMNRD notes there appears no other law in New Mexico that requires three levels of adminis-

trative hearings before an appeal can go to district court. The current process has resulted in a

very long and costly appeal process that can frustrate both the public and the mine operators.

MMD consulted with the coal mining industry, the Coal Surface Mining Commission and envi-

ronmental interests in the drafting of these proposed changes.

Eliminating the exemption for state agencies from the attorneys’ fee provision in the Surface

Mining Act is necessary for the State to maintain its authority over coal mines. To regulate coal

mines in New Mexico, the State must maintain a coal regulatory law that is consistent with the

requirements of the federal Surface Mining Control and Reclamation Act (SMCRA) and ap-

proved by the U.S. Department of the Interior. The U.S. Department of the Interior has notified

the State that the exemption from the attorney fee provision, Section 69-25A-29 NMSA 1978,

are not consistent with federal law and must be removed. If this provision in the Coal Act is not

changed, the U.S. Department of the Interior could withdraw its approval of New Mexico’s pro-

gram and instead enforce the federal law in New Mexico.

PERFORMANCE IMPLICATIONS

FISCAL IMPLICATIONS

There are no predictable fiscal implications from the passage of this Act. While eliminating one

level of administrative appeal could save money, appeals under the Surface Mining Act are rare

and unpredictable. On the other hand, allowing the state to be liable for attorneys’ fees creates a

potential liability. But again, the attorneys’ fees provision has only been invoked once in the 25

years of the Act and the Court denied the request in that case.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

House Bill 311 relates to HB 306 which also amends the Surface Mining Act by amending the

sunset provisions for the Act and the Coal Surface Mining Commission. These bills do not con-

flict or overlap.

PA/sb