New Mexico Mining Ass'n v. New Mexico Mining Com'n

Decision Date28 August 1996
Docket NumberNo. 16927,16927
Citation1996 NMCA 98,122 N.M. 332,924 P.2d 741
PartiesNEW MEXICO MINING ASSOCIATION, Plaintiff-Appellant, v. NEW MEXICO MINING COMMISSION, Defendant-Appellee.
CourtCourt of Appeals of New Mexico
OPINION

DONNELLY, Judge.

¶1 In this case we examine the authority of a state entity, the New Mexico Mining Commission (Commission), to adopt a rule imposing a surcharge on certain fees promulgated by it in order to partially reimburse the Department of Game and Fish (DG & F) for assistance in implementing the State Mining Act. We hold that the rule and fees in question come within the ambit of the Commission's statutory authority and that the proposed fund transfers are valid. We therefore affirm.

FACTS

¶2 On September 5, 1995, the Commission scheduled a public hearing on proposed amendments to the fee schedule imposed by the Commission pursuant to the New Mexico Mining Act (Mining Act), NMSA 1978, Sections 69-36-1 to -20 (Repl.Pamp.1993). The New Mexico Mining Association (Association) appeared at the public hearing and opposed the adoption of certain fee provisions contained in the proposed rules. The amendments to the rule considered at the public hearing were adopted by the Commission following an earlier court challenge by the Association which resulted in a determination that portions of the application and permit fees previously adopted by the Commission were illegal. See Old Abe Co. v. New Mexico Mining Comm'n, 121 N.M. 83, 908 P.2d 776 (Ct.App.) (invalidating those portions of the rules adopted by the Commission that did not specify determinate fees), cert. denied, 120 N.M. 828, 907 P.2d 1009 (1995).

¶3 Following the hearing on the proposed revised rules, the Commission met again on October 27, 1995, and adopted additional amendments, including a new version of Rule 205. The amendments, including Rule 205, were approved by the Commission and filed with the State Records Center pursuant to the State Rules Act, NMSA 1978, Sections 14-4-1 to -11 (Repl.Pamp.1995), on December 1, 1995. 1 In addition to adopting Rule 205, the Commission also entered into a joint powers agreement with the DG & F, whereby the DG & F agreed to provide personnel and technical expertise in order to assist the Commission in carrying out certain aspects of the Mining Act.

¶4 On December 4, 1995, the Association appealed the adoption of Rule 205 to this Court in accordance with the provisions of Section 69-36-16.

VALIDITY OF APPEAL

¶5 We first examine a threshold issue involving the validity of the Association's appeal. The Commission argues that the appeal is procedurally flawed and that this Court is without jurisdiction to review the matters asserted herein because the notice of appeal filed by the Association on December 4, 1995, refers to an earlier version of Rule 205, which was filed with the State Records Center on November 2, 1995, and not the revised version of the rule adopted by the Commission on November 29, 1995, and filed with the State Records Center on December 1, 1995.

¶6. Comparison of the language of Rule 205 filed on November 2, 1995, with that filed on December 1, 1995, indicates that both versions of the rule provided for the imposition of a surcharge upon application fees or annual fees promulgated by the Commission pursuant to its statutory authority under the Mining Act. Although the Commission correctly notes that following the filing of the rule, the language of the rule underwent partial revision following a public hearing conducted pursuant to Section 69-36-8, both the earlier and later versions of the rule provide for the imposition of a surcharge upon application fees and annual fees for the purpose of compensating the DG & F for its costs in implementing the Mining Act. Because the basis of the Association's appeal involves the question of whether the Commission possesses the legal authority to assess a surcharge in order to obtain funds to reimburse another state agency for technical assistance, and the modified language of the revised rule does not alter or render moot the underlying issue of the Commission's authority to adopt such rule or to apply the monies derived therefrom, we conclude that the Association's appeal withstands the Commission's challenge. See In re Sanders, 108 N.M. 434, 436, 773 P.2d 1241, 1243 (Ct.App.1989) (court may review issue asserted on appeal if issue sought to be raised is capable of repetition and involves question of public importance).

¶7 Under the record before us, it is clear that the December 4, 1995, appeal by the Association was timely filed following the Commission's initial adoption and filing of the original version of Rule 205 on November 2, 1995, and the November 29, 1995, subsequent revision of the rule. Thus, under the circumstances existing here, we conclude that the Association's appeal survives the technical challenges raised by the Commission. 2 See Trujillo v. Serrano, 117 N.M. 273, 277, 871 P.2d 369, 373 (1994) (court will construe rules relating to appeals liberally to permit cases to be determined on merits where it can be done without causing injustice).

STANDARD OF REVIEW

¶8 The appellate standard of review applicable to the issues raised by the Association is set forth in the Mining Act. Section 69-36-16(F) states: "Upon appeal the court shall set aside the regulation, order or other action only if it is found to be: (1) arbitrary, capricious or an abuse of discretion; (2) not supported by substantial evidence in the record; or (3) otherwise not in accordance with law." See also Old Abe Co., 121 N.M. at 88, 908 P.2d at 781. A party challenging a rule adopted by an administrative agency has the burden of establishing the invalidity of the rule or proposed regulation. Tenneco Oil Co. v. New Mexico Water Quality Control Comm'n, 107 N.M. 469, 473, 760 P.2d 161, 165 (Ct.App.1987), cert. denied sub nom. Navajo Ref. Co. v. New Mexico Water Quality Control Comm'n, 106 N.M. 714, 749 P.2d 99 (1988).

RULE-MAKING AUTHORITY

¶9 We next examine the Commission's statutory rule-making authority enacted by the Legislature.

¶10 The Association challenges the authority of the Commission to adopt Rule 205 because it contends that the Mining Act does not expressly authorize the Commission to adopt a rule imposing a fee for the purpose of helping to defray the cost of the DG & F's expenses in assisting the Commission to implement the Mining Act.

¶11 The final version of Rule 205, as adopted by the Commission and filed with the State Records Center on December 1, 1995, states:

Surcharge for Department of Game and Fish Activities

A. To compensate the Department of Game and Fish for its costs required to implement its involvement in implementing the Act, a percentage surcharge shall be added in the same percentage to each of the above application and annual fees. This surcharge shall be 4.5 percent of fees collected in FY 96 to be used in FY 97.

B. Payment. On a quarterly basis, the Director shall reimburse the Department of Game and Fish, only from this surcharge, for its reasonably necessary costs incurred under the Department['s] involvement with implementation of the Act.

¶12 Section 69-36-7(M) of the Mining Act provides in applicable part that the Commission is authorized to "establish by regulation a schedule of annual administrative and permit fees, which shall equal ... the estimated costs of [the] administration, implementation, enforcement, investigation and permitting pursuant to the ... Mining Act." (Emphasis added.) This provision discloses a legislative intent that the Commission, in adopting regulatory mining application fees and annual fees pursuant to Section 69-36-7(M) of the Mining Act, transfer the cost of processing and implementing certain application and permit fees to the parties seeking the issuance and approval of those mining activities. In enacting this section, the legislature expressly directed that the Commission fix the amount of fees promulgated by it at a level which equals the estimated actual expense of investigating, reviewing, and enforcing certain applications or permits issued pursuant to the Mining Act so that this portion of the Commission's responsibilities under the Act would be largely self-supporting. Id. Here, it is clear that the incidence of the fees in question falls upon the parties who seek to carry out mining activities within New Mexico.

¶13 By express legislative provision, Section 69-36-19(A) creates the state Mining Act Fund and directs that "[a]ll money received by the state from permit applicants, permit holders [or other sources] shall be ... deposited in the fund." Pursuant to this statutory power, the Secretary of the Energy, Minerals and Natural Resources Department (Secretary) is authorized to expend monies from such fund "to carry out the purposes of the ... Mining Act." Id. The Mining Act also provides that the director of the Mining and Minerals Division of the Energy, Minerals and Natural Resources Department (Department) is authorized to enter into agreements with both federal and state agencies for coordinating the review and issuance of "all necessary permits to conduct ... mining operations and exploration in New Mexico." Section 69-36-9(B). The director of the Mining and Minerals Division is also invested with the authority pursuant to a joint powers agreement to contract with the DG & F for assistance in carrying out these same duties. See NMSA 1978, §§ 11-1-1 to -7 (Repl.Pamp.1994); see also § 11-1-5(C) (authorizing public agencies or entities to enter into contracts under the Joint Powers Agreements Act to carry out "the common power specified in the agreement").

¶14 In adopting the Mining Act the legislature declared that the...

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