Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR McQueen
/Ortez
LAST UPDATED
ORIGINAL DATE 2/13/2025
SHORT TITLE Water Law Violation Penalty
BILL
NUMBER House Bill 348
ANALYST Davidson
REVENUE*
(dollars in thousands)
Type FY25 FY26 FY27 FY28 FY29
Recurring or
Nonrecurring
Fund
Affected
Penalty
$80.0 to
$100.0
$80.0 to
$100.0
$80.0 to
$100.0
$80.0 to
$100.0
Recurring General Fund
Parentheses ( ) indicate revenue decreases.
*Amounts reflect most recent analysis of this legislation.
Duplicates Senate Bill 210
Sources of Information
LFC Files
Agency Analysis Received From
Office of the State Engineer (OSE)
SUMMARY
Synopsis of House Bill 348
House Bill 348 (HB348) amends several sections within Chapter 72 NMSA 1978, increasing the
penalties for certain water law violations to $2,000 per day, allowing the Office of the State
Engineer (OSE) to increase the maximum penalty to account for inflation in future years, and
amending statute to state repayment in water, not in fines, would be preferred.
This bill does not contain an effective date and, as a result, would go into effect 90 days after the
Legislature adjourns if enacted, or June 20, 2025.
FISCAL IMPLICATIONS
OSE did not provide an estimate as to how the increasing of penalties from $100 per day to
$2,000 per day would increase revenue; however, OSE did note that increasing the penalty may
actually deter violations. OSE processes roughly 40 to 50 enforcement actions a year. Using
these numbers, LFC analysis estimates revenue has the potential to increase from $4 to $5
thousand in civil penalties a year to $80 to $100 thousand a year. However, this is dependent on
a violation lasting a day. OSE analysis notes some violations can last weeks, months, and
possibly longer. LFC analysis does not account for this variability. House Bill 348 – Page 2
SIGNIFICANT ISSUES
OSE notes the maximum penalty for a water law violation was set in 1907 at $100 per day and
has not been changed since. OSE also notes moving the date of accrual to the date of notice of
violation is issued, in conjunction with increasing the penalty to $2,000 a day, could make
violations cost prohibitive to would be violators.
Analysis from OSE notes in most enforcement cases the agency seeks payback of water rather
than money. This is typically done through compelling the enforced-on party to reduce future
diversions by the quantity of water which was previously over-or illegally taken or diverted.
OSE has found this practice is a successful deterrent against future diversions or breakings of
water law.
However, OSE notes:
Not all violations of the Water Code can be remedied through the payback of water.
Some violations are not over diversions at all; instead, they may be violations of metering
or reporting requirements, or failure to comply with all regulations in the drilling of a
well. Additionally, some violators of the Water Code may not have valid rights to satisfy
a payback requirement. Therefore, monetary penalties are necessary to remedy these
types of violations.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
House Bill 348 duplicates Senate Bill 210.
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