New Mexico Rules State Engineer Required to Closely Review Applications for Exempt Wells

Recently, a New Mexico court ruled that the State Engineer is required to review all new applications for exempt domestic wells.  Prior to the ruling, those drilling exempt wells were merely required to file for a “permit” that would be automatically approved by the State Engineer.  The recent ruling requires the State Engineer to review each new application to insure the proposed exempt domestic well will not deny water to any prior users in the same watershed. 

The decision settles a conflict between New Mexico’s traditional principal of prior appropriation of water and a law passed in the 1950s exempting domestic wells from permitting requirements, regardless of their affect on prior users in the watershed.  The Court concluded that those with senior priority rights should not be denied access to the water they hold rights to, even by exempt domestic users.   

Groups supporting the decision applauded it for “closing a loophole” in New Mexico water law.  Those who saw the ruling as a victory noted that increased exempt domestic well drilling was a threat to New Mexico’s water supplies.  Others groups focused on limiting growth in New Mexico’s complemented the decision for its recognition of New Mexico’s finite water resources.  Conversely, the decision will make bringing water to new developments that rely on exempt domestic wells troublesome for developers.            

In the 1950s, at the time the exemption for domestic wells was passed, only a small number of new exempt wells were drilled each year.  Today the State Engineer’s office issues between 7000 and 8000 new exempt well permits on an annual basis.  

The case was originally brought by New Mexico farmers Horace and Jo Bounds against the State Engineer for permitting exempt wells in their watershed when the Bounds were denied a full historic allotment of water under their water rights.  The Court’s ruling did not prohibit exempt wells or revoke any permits already issued.  In the Boundses’ case, the decision did not free up any water in their watershed.   

The new requirement will do little to change wells already permitted, it will dramatically increase the State Engineer’s workload, creating a need for an increase in the State Engineer’s staff.  The State Engineer has not yet indicated whether the decision will be appealed.  He did remark that he agreed with the decision, despite being on the losing side.  He further noted that prior to the decision there were ongoing attempts to get the New Mexico legislature to fix the problem in light of the old exempt domestic well law’s likely unconstitutionality.