Current through Register Vol. 35, No. 18, September 24, 2024
A.
General. Whenever the division determines that a person violated
or is violating the Oil and Gas Act or a provision of any rule, order, permit
or authorization issued pursuant to the Oil and Gas Act, the division may seek
a sanction by:
(1) issuing a temporary
cessation order if it determines that the alleged violation is causing or will
cause an imminent danger to public health or safety or a significant imminent
environmental harm. The temporary cessation order shall remain in place until
the earlier of when the division determines that the alleged violation is
abated or 30 days, unless a hearing is held before the division and a new order
is issued;
(2) issuing a notice of
violation; or
(3) commencing a
civil action in district court.
B.
Sanctions. The division may
seek one or more of the following sanctions:
(1) a civil penalty;
(2) modification, suspension, cancellation or
termination of a permit or authorization;
(3) plugging and abandonment of a
well;
(4) remediation and
restoration of a well location and associated facilities, including the removal
of surface and subsurface equipment and other materials;
(5) remediation and restoration of a location
affected by a spill or release;
(6)
forfeiture of financial assurance;
(7) shutting in a well or wells;
and
(8) any other remedy authorized
by law.
C.
Notice
of violation.
(1) A notice of violation
issued by the division shall state with reasonable specificity:
(a) the identity of the alleged
violator;
(b) the nature and
factual and legal basis of the alleged violation, including the provision of
the Oil and Gas Act or rule, order, permit or authorization allegedly
violated;
(c) whether compliance is
required immediately or within a specified time period;
(d) the sanction(s) available for the alleged
violation, the sanction(s) proposed by the division, and a statement that the
division will take into consideration the violators good faith efforts to
comply with the applicable requirements;
(e) the availability of a process for
informal review and resolution of the alleged violation, and the procedure to
initiate the informal review process, including the contact information of the
appropriate division employee;
(f)
a statement that if the notice of violation is not informally resolved within
30 days of service, the division will hold a hearing, but that the hearing
shall not prohibit the parties from negotiating and settling the notice of
violation at any time; and
(g) the
date of the hearing, which shall be no later than 90 days after the date of the
notice of violation.
(2)
The division shall serve the notice of violation on the alleged violator by
certified mail, and may provide the notice of violation by electronic mail if
possible.
(3) If during the
informal review the division and the alleged violator agree to resolve the
alleged violation, they shall incorporate their agreement into a stipulated
final order signed by both parties. The stipulated final order shall state that
the alleged violator admits the division's jurisdiction to file the notice of
violation, consents to the specified relief, including the civil penalty, if
any, and waives the alleged violator's right of review by the
commission.
(4) If the division and
the alleged violator fail to enter a stipulated final order within 30 days of
service, the division shall hold a hearing at the division's principal
office.
D.
Civil
penalties. A civil penalty assessed by the division shall account for
the seriousness of the violation, good faith efforts to comply with the
applicable requirement, history of noncompliance under the Oil and Gas Act and
other relevant factors. The civil penalty assessed by the division shall not
exceed $2,500 per day of noncompliance for each alleged violation, unless the
alleged violation presents a risk either to the health or safety of the public
or of causing significant environmental harm, or unless the noncompliance
continues beyond the time specified in the notice of violation or stipulated
final order, whereupon the civil penalty may not exceed $10,000 per day of
noncompliance for each alleged violation, provided that the civil penalty
assessed by the division for an alleged violation shall not exceed
$200,000.
E.
Adjudicatory
procedures. These adjudicatory procedures shall apply to hearings on
temporary cessation orders and notices of violation before the division, and
the provisions of 19.15.4 NMAC shall not apply.
(1)
General provisions.
(a)
Designation of parties. The
parties shall be the division and the person served with a notice of violation
or order, referred to herein as "respondent".
(b)
Representation. Respondent
may appear and participate in a hearing either pro se or through counsel,
provided that a collective entity, including a corporation, partnership,
unincorporated association, political subdivision or governmental agency shall
appear only through counsel or a duly authorized officer or member.
(c)
Rule applicability. In the
absence of a specific provision in this section, the hearing examiner may apply
the New Mexico rules of civil procedure and evidence.
(d)
Computation of time. In
computing any period of time under 19.15.5.10 NMAC the day of the event from
which the designated period begins to run shall not be included, and the last
day of the computed period shall be included, unless it is a Saturday, Sunday
or legal state holiday, in which case the time is extended until the next day
which is not a Saturday, Sunday or legal state holiday. Whenever a party must
act within a prescribed period after service, and service is by first class
mail only, three days is added to the prescribed period.
(e)
Extensions of time. The
hearing examiner may grant an extension of time to file a document or continue
a hearing upon timely motion upon consent of the parties, or for good cause
shown after consideration of prejudice to the other party and undue delay to
the hearing.
(f)
Filing of
documents. A party shall file the original of each document and serve a
copy on the other party, accompanied by a certificate of service identifying
the method and address used to complete service.
(g)
Service of documents. A
party shall serve each document on the other party or its counsel, as
applicable, by personal service or first class mail, or by electronic mail if
the parties agree.
(h)
Form
of documents. Unless otherwise ordered, all documents, except exhibits,
shall be on 8 1/2 x 11-inch white paper, shall contain the caption of the
notice of violation or temporary cessation order on the first page and shall be
signed by the party or its counsel, as applicable.
(2)
Pre-hearing procedures.
(a)
Docketing. At the expiration
of the 30 day period for informal resolution of a notice of violation, when a
party appeals a final order under Subsection E of 19.15.5.10 NMAC, or when the
division gives notice that it intends to extend a temporary cessation order,
the division shall docket the notice of violation or order for hearing,
identify the factual basis for the alleged violation and proposed sanction(s),
and serve a notice of docketing on respondent.
(b)
Answer. No later than 10
days after service of the notice of docketing, respondent shall file an answer
stating its objection, if any, and the factual and legal basis for such
objection, to each alleged violation and proposed sanction in the notice of
violation or order.
(c)
Hearing examiner. The hearing examiner shall have the authority to
take all measures necessary to conduct a fair, impartial and efficient
adjudication of issues, and to maintain order and avoid undue delay, including
the authority to conduct pre-hearing conferences and hearings, rule on
procedural and evidentiary motions, govern the examination of witnesses and the
admission of evidence, issue orders and prepare a recommended decision. After
the division issues the notice of violation, the hearing examiner shall not
discuss ex parte the merits of the proceeding with the division or the
respondent.
(d)
Pre-hearing
conference. The hearing examiner may hold a pre-hearing conference to
narrow the issues, eliminate or resolve preliminary matters and encourage
settlement, and may issue a pre-hearing order on procedural and evidentiary
matters, including a schedule for the filing of motions and testimony,
stipulations regarding alleged violations and requested relief, including
proposed civil penalties or elements thereof, and any other matter necessary
for the efficient conduct of the hearing.
(e)
Pre-hearing statements. No
later than seven calendar days before the hearing, a party who intends to
present evidence at the hearing shall file and serve a statement that contains
the following information:
(i) the name,
address, employment and qualifications, including education and work history,
of each witness;
(ii) a statement
identifying the opinions and factual assertions supporting each witness'
testimony;
(iii) the exhibits and
other evidence to be presented by each witness; and
(iv) procedural matters that are to be
resolved prior to the hearing.
(f)
Enforcement. The hearing
examiner may enforce the requirements of 19.15.5.10 NMAC by any appropriate
means, including the exclusion of testimony, exhibits and other
evidence.
(g)
Motions.
(i)
General. All motions, except
motions made orally during the hearing, shall be in writing, specify the
grounds for the motion, state the relief sought, indicate whether the motion is
opposed or unopposed and be served on the other party.
(ii)
Unopposed motions. An
unopposed motion shall state that concurrence of the other party was obtained
and shall be accompanied by a proposed order approved by the parties.
(iii)
Opposed motions. An
opposed motion shall state either that concurrence was sought and not obtained,
or the reason that concurrence was not sought.
(iv)
Response. No later than 10
days after service of an opposed motion, the opposing party may file a
response. Failure to file a response shall be deemed a waiver of any objection
to the granting of the motion.
(v)
Reply. No later than 10 days after service of a response to an
opposed motion, the moving party may file a reply.
(vi)
Decision. The hearing
examiner shall decide all motions without a hearing, unless otherwise ordered
by the hearing examiner sua sponte or upon written request of a
party.
(h)
Shortening Deadlines. On the written request of the alleged
violator showing good cause, the hearing examiner may shorten the deadlines
specified in Paragraph (2) of Subsection E of 19.15.10 NMAC to conduct the
hearing on the division's application for a temporary cessation order as
expeditiously as possible. If the division opposes the request to shorten
deadlines, the procedures for opposed motions set forth in Subparagraph (g) of
Paragraph (2) of Subsection G of 19.15.5.10 NMAC shall not apply and the
hearing examiner shall decide the request, with or without hearing, as quickly
as practicable.
(3)
Hearing procedures.
(a)
General. The hearing examiner shall admit all evidence, unless he
or she determines that the evidence is irrelevant, immaterial, unduly
repetitious or otherwise unreliable or of little probative value. Evidence
relating to settlement that would be excluded by the New Mexico Rules of
Evidence is not admissible.
(b)
Witness examination. Witnesses shall be examined orally and under
oath or affirmation, provided that the parties may stipulate to the admission
of the testimony of a witness, or part thereof. Parties shall have the right to
cross-examine a witness, provided that the hearing examiner may limit
cross-examination that is unduly repetitious, harassing or beyond the scope of
the direct testimony.
(c)
Exhibits. A party shall label each exhibit used during the hearing
or offered into evidence with a designation identifying the party, the witness
using or offering the exhibit and a serial number.
(d)
Burden of persuasion. The
division has the burden of going forward with the evidence and of proving by a
preponderance of the evidence the facts relied upon to show the alleged
violation occurred and that the proposed civil penalty is appropriate.
Following the establishment of a prima facie case, respondent shall have the
burden of going forward with any adverse evidence or defense to the
allegations.
(4)
Post-hearing procedures.
(a)
Transcript. The hearing shall be transcribed verbatim. Respondent
may order a copy of the transcript from the reporter at its own
expense.
(b)
Recommended
decision. The hearing examiner shall prepare a recommended decision for
review by the director.
(c)
Final order. The director shall file a final order addressing the
material issues of fact and law and may assess a sanction for each alleged
violation, which shall be served on the division and the respondent.
F.
Commission
review. No later than 30 days after the director serves the final order,
a party may file a notice of appeal with the commission and shall serve the
notice of appeal on the other party. The commission shall schedule a hearing on
the appeal and notify the parties of the date and time of the hearing. The
commission shall conduct a de novo review, provided however, that the parties
may stipulate to the issues to be heard and to the admission of all or part of
the record before the division. The commission shall conduct the hearing in
accordance with the adjudicatory procedures in Paragraph (1), Subparagraphs (c)
through (g) of Paragraph (2), Paragraph (3) and Subparagraph (a) of Paragraph
(4) of Subsection E of 19.15.5.10 NMAC.
G.
Rehearings. A party may file
an application for rehearing with the commission pursuant to Section
70-2-25 NMSA
1978.
H.
Payment of civil
penalty. Respondent shall pay the full amount of the civil penalty
assessed in the final order (i) no later than 30 days after the director serves
the final order, or (ii) if respondent files a notice of appeal to the
commission or the district court pursuant to Section
70-2-25 NMSA
1978, no later than 30 days after the commission or the district court files a
final order or the appeal is withdrawn.
I.
Resolution after commencement of
hearing. If the parties agree to resolve a notice of violation at any
time after the commencement of a hearing, they shall file a stipulated final
order signed by both parties. The stipulated final order shall state that
respondent admits the division's jurisdiction to file the notice of violation,
consents to the specified relief, including the civil penalty, if any, and
waives respondent's right of review by the commission or the court, as
applicable.
J.
Publication. On or about October 1 of each year, the division
shall publish a list identifying the temporary cessation orders and notices of
violation issued during the preceding year, along with the civil penalty paid,
if any.
K.
Reservation. Nothing in 19.15.5.10 NMAC precludes the division
from bringing any other action and seeking any relief allowed by the Oil and
Gas Act.
