Opinion ID: 728159
Heading Depth: 3
Heading Rank: 3

Heading: Severability of the Proceeds Definition

Text: 68 Although the district court considered only the proceeds definition, the court apparently invalidated Rule 1.059 in its entirety. The Commissioner now argues that even if the proceeds definition is invalid--which we hold it is--the district court erred in not considering whether the remaining portions of the Rule could be preserved under the Rule's severability clause. This clause provides that [i]f any part or application of this rule is held invalid, the remainder or its application to other situations or persons shall not be affected. Rule 1.059(G). 14 69 Severability of a state regulation is a question of state law. National Solid Wastes Management Ass'n v. Killian, 918 F.2d 671, 679 n. 8 (7th Cir.1990), aff'd, 505 U.S. 88, 112 S.Ct. 2374, 120 L.Ed.2d 73 (1992); cf. Panhandle Eastern Pipeline Co. v. Oklahoma ex rel. Comm'rs of Land Office, 83 F.3d 1219, 1229 (10th Cir.1996) (addressing a statute, not a regulation). Under New Mexico law, the valid portion of a partially invalid statute can continue in force if the following three criteria are satisfied: 70 (1) the invalid part must be separable from the other portions without impairing the force and effect of the remaining parts; (2) the legislative purpose expressed in the valid portion can be given force and effect without the invalid part; and (3) when considering the entire act, it cannot be said that the legislature would not have passed the remaining part if it had known that the objectionable part was invalid. 71 Giant Indus. Ariz., Inc. v. Taxation & Revenue Dep't, 110 N.M. 442, 796 P.2d 1138, 1140 (App.1990) (citing Bradbury & Stamm Constr. Co. v. Bureau of Revenue, 70 N.M. 226, 372 P.2d 808 (1962)). The existence of a severability clause raises a presumption that the legislating body would have enacted the remaining portions of a statute even without the invalidated sections. Chapman v. Luna, 101 N.M. 59, 678 P.2d 687, 693 (1984), aff'd after remand, 102 N.M. 768, 701 P.2d 367, cert. denied, 474 U.S. 947, 106 S.Ct. 345, 88 L.Ed.2d 292 (1985). Although these rules of construction are designed to test the severability of a statute, we see no reason why a similar inquiry should not also govern the severability of a regulation. See Marez v. State Taxation & Revenue Dep't., 119 N.M. 598, 893 P.2d 494, 497 (App.1995) (noting the commonplace technique of legislative drafting to provide for survival of non-affected provisions if portions of a statute or regulation are found to be invalid) (emphasis added). 72 In light of Rule 1.059's severability provision, we hold that the district court's failure to consider the independent validity of the other portions of Rule 1.059 was erroneous. Because severability is a legal question, Panhandle Eastern Pipeline Co., 83 F.3d at 1229-31, a reviewing court may conduct a severability analysis on appeal without resort to remand. However, the district court here never even considered the predicate question whether the other provisions of the Rule were valid. Compare Leavitt v. Jane L., 518 U.S. 137, ----, 116 S.Ct. 2068, 2069, 135 L.Ed.2d 443 (1996) (per curiam) (considering severability of statute where district court had invalidated one provision of the statute but held the remainder valid). Thus, in the absence of a more developed record on this question, it would be imprudent in this case to conduct a severability analysis for the first time on appeal. Accordingly, we vacate that portion of the district court's order invalidating Rule 1.059 in its entirety and we remand with instructions to consider: (1) whether the remaining portions of Rule 1.059 are valid; and (2) if so, whether the invalid proceeds definition is severable from the lawful portions of the Rule under New Mexico law.