November 14, 2013 – City of Santa Fe v. Gary Tomada, No. 32,407

IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number:_______________
Filing Date: 	November 14, 2013
NO. 32,407
THE CITY OF SANTA FE,
Plaintiff-Appellee,
v.
GARY TOMADA, Director of the Alcohol
and Gaming Division of the State of New
Mexico Regulation and Licensing Department,
and WESTERN REFINING SOUTHWEST, INC.,
Defendants-Appellants.
APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY
Raymond Z. Ortiz, District Judge
Geno Zamora, City Attorney
Mark L. Allen, Assistant City Attorney
Santa Fe, NM
for Appellee
Gary K. King, Attorney General
Andrea R. Buzzard, Assistant Attorney General
Santa Fe, NM
for Appellant Gary Tomada

Montgomery & Andrews, P.A.
Suzanne C. Odom
Seth C. McMillan
Andrew S. Montgomery
Santa Fe, NM
for Appellant Western Refining Southwest, Inc.

OPINION
BUSTAMANTE, Judge.
{1} 	The issue in this case involves the proper way to measure the distance between
a school and a “licensed premise” in which liquor is sold. The Director of the Alcohol
and Gaming Division approved the transfer of a liquor license applying the Division’s
longstanding regulation and method of measurement. The district court disagreed,
holding that the regulation conflicted with the Liquor Control Act’s method of
measurement. Determining that the Director’s interpretation of the Liquor Control
Act is correct, we reverse.
BACKGROUND
{2} 	Western Refining Southwest, Inc. (Western) applied to the Alcohol and Gaming
Division (the Division) of the State of New Mexico Regulation and Licensing
Department to transfer a liquor license from one location to 5741 Airport Road, Santa
Fe, New Mexico. The property at 5741 Airport Road is located at the northeast corner
of the intersection of Airport Road, a heavily commercialized, four-lane arterial
thoroughfare, and South Meadows Road, a two-lane road. 	Three structures are
situated on that property: (1) a restaurant closest to the intersection; (2) a Giant gas
station canopy set part-way back from the intersection; and (3) a Giant convenience
store comprising the licensed premises, set back farthest from the intersection.

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{3} 	At the southwest corner of the intersection, on the far side of Airport Road and
South Meadows Road, is a tract containing the buildings and grounds of an
elementary school and a Head Start facility. The straight-line distance from the Giant
convenience store to the north boundary of the school grounds is 377.53 feet. The
straight-line distance from the south boundary of the real property on which the Giant
convenience store is situated to the north boundary of the school grounds is 155.05
feet.
{4} 	After a public hearing, the Division found that Western was “not prohibited
from receiving or holding a liquor license, . . . had submitted all information required
by the Liquor Control Act [(the Act)], and . . . was qualified to hold or receive a liquor
license.” See NMSA 1978, §§ 60-3A-1 to -12 (1981, as amended through 2012) (the
Liquor Control Act). Pursuant to NMSA 1978, Section 60-6B-4(A) (1981) of the Act,
the Division forwarded the application to the City of Santa Fe (the City). Following
a public hearing, the City denied the transfer based on its conclusions that the
proposed site was within 300 feet of a school—which is prohibited by NMSA 1978,
Section 60-6B-10 (1997)—and as such posed a threat to public health and safety.
{5} 	Western requested that the Division approve the transfer in spite of denial by
the City. Relying on Southland Corp. v. Manzagol, 1994-NMSC-099, 118 N.M. 423,
882 P.2d 14, the Division Director approved the transfer request. The Director found

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that, contrary to the City’s finding, (i) Western’s proposed location was not less than
300 feet from a school when the distance was measured using the Division’s
longstanding regulation specifying how the distance between a liquor establishment
and a school should be measured, and (ii) there was not substantial evidence to
support the City’s finding that the transfer posed a threat to public health and safety.
See 15.10.32.8 NMAC (12/31/01); Southland Corp., 1994-NMSC-099, ¶ 1 (“[T]he
[d]irector [of the division] may approve a transfer of a license despite municipal
disapproval.”). The City timely appealed to the district court.
{6} 	The district court reversed the approval of the transfer. 	The district court
concluded that (i) the language of Section 60-6B-10 of the Act unambiguously
required measurement from the property line of the school to the property line of the
lot on which the licensed premises were located, and (ii) the regulation promulgated
by the Division was unlawful because it described a different measurement method.
Specifically, the district court held the Division’s regulation “constitutes executive
creation of substantive law” and therefore violated the constitutional principle of
separation of powers. See N.M. Const. art. III, § 1. The Division, with Western as
intervenor, timely petitioned for a writ of certiorari to this Court, which was granted.
See Rule 12-505 NMRA.
DISCUSSION

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{7} 	We begin by reviewing the governing statute and the associated regulation.
Section 60-6B-10 states:
No license shall be issued by the director for the sale of alcoholic
beverages at a licensed premises . . . that is within three hundred feet of
any church or school. . . . For the purposes of this section, all
measurements taken in order to determine the location of licensed
premises in relation to churches or schools shall be the straight line
distance from the property line of the licensed premises to the property
line of the church or school.
The 	accompanying 	regulation, 	promulgated 	by 	the 	Division, 	describes 	the
measurement requirements differently.
All measurements for the purpose of determining the location of
a licensed premises in relation to churches [or] schools . . . shall be the
shortest direct line measurement between the actual limits of the real
property of the church [or] school . . . in which there is regularly
conducted church services [or] educational functions . . . , and the
licensed premises where alcoholic beverages are proposed to be sold.
15.10.32.8 NMAC. Whereas the statute references the “property line” of the school
or church and the “property line” of the licensed premises, the regulation makes no
mention of “property lines” and instead focuses on the “actual limits” of the property
where certain activities occur.
{8} 	Our task on appeal is to determine whether the Division’s regulation—and the
Director’s application of it—accurately reflects the Legislature’s intent in passing
Section 60-6B-10. If so, then the Director’s approval of Western’s application based
on its calculation of the distance to the school was appropriate.

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{9} 	All of the parties cite to Regents of University of New Mexico v. Hughes in
support of their positions. 1992-NMSC-049, 114 N.M. 304, 838 P.2d 458. Hughes
is one of few appellate decisions construing Section 60-6B-10 and, thus, we examine
it in some detail. We begin by outlining the facts and holdings of that case, then turn
to how those holdings apply here.
{10} 	In Hughes, the Regents of the University of New Mexico objected to transfer
of a liquor license to a location across a street from a “service center building” and
associated parking lot owned by the University. 	1992-NMSC-049, ¶¶ 2-3. 	The
division approved the transfer, the Regents appealed, and the district court reversed
the appeal. 	Id. ¶ 2. 	There was no dispute that the building and parking lot were
within 300 feet of the proposed licensed premises, nor was there a dispute about
whether the University was a school. Id. ¶¶ 3, 27. Rather, the question was whether
“it follows inexorably that a proposed licensed premises within 300 feet of any part
of the University, regardless of the use to which that part is put, is ipso facto within
300 feet of a school as contemplated by the statute.” Id. ¶ 27.
{11} 	Our Supreme Court framed the issue in Hughes as “whether the word ‘school’
in Section 60-6B-10 . . . is to be given a functional or a literal interpretation.” Hughes,
1992-NMSC-049, ¶ 1. 	“By ‘functional’, [the Court] mean[t] an interpretation
focusing on the purposes for which property owned by a school is used, as opposed

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to a ‘literal’ interpretation focusing only on the fact that the property is owned by a
school.” 	Id. 	The Court concluded that because Section 60-6B-10 referred to “the
boundary of the property nearest the licensed premises,” it “call[ed] for, or at least
permit[ted], an inquiry into the nature of the property so bounded—i.e., to what use
is that property being put; is it used for school . . . purposes or for some other purpose
having no relation to the object of the statute?” 	Hughes, 1992-NMSC-049, ¶ 27
(emphasis omitted).
{12} 	Noting that the Act did not define “school,” the Court turned to a regulation
interpreting the Act, which stated at that time that
[a]ll measurements for the purpose of determining the location of
designated premises in relation to . . . schools . . . shall be direct line
measurements between the actual limits of the real property of the . . .
school . . . in which there is regularly conducted . . . educational
functions . . .; and the building in which the liquor is proposed to be sold.
Id. ¶ 30 (emphasis added) (omissions in original) (citing ABC Regulation No. 6B-
10.(A), the predecessor regulation to what is now 15.10.32.8 NMAC). Emphasizing
that the agency’s interpretation was presumed to be correct and entitled to deference,
the Court decided that a test based on the function of the portion of the University’s
property within 300 feet of the licensed premises should prevail over a literal
interpretation of the statute that would require measurement from the boundary of the
property owned by the University. Hughes, 1992-NMSC-049, ¶ 30; Lantz v. Santa

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Fe Extraterritorial Zoning Auth., 2004-NMCA-090, ¶ 7, 136 N.M. 74, 94 P.3d 817
(“[W]e give persuasive weight to long-standing administrative constructions of
statutes by the agency charged with administering them.” (internal quotation marks
and citation omitted)). 	The Court concluded that this functional analysis was
consistent with the purpose of the statute, which is to “protect the area occupied by a
church or school, including its yards and grounds, from the inimical milieu commonly
associated with establishments selling alcoholic beverages.” Hughes, 1992-NMSC-
049, ¶ 33; see N.M. Att’y Gen. Op. 74-18 (1974). And, having determined that the
service center building and parking lot were not used for instructional purposes, the
Court observed that there was “no need to protect the workers and others who may use
the . . . service center and associated parking lot from the ‘inimical milieu’ ” of the
licensed premises across the street. Hughes, 1992-NMSC-049, ¶¶ 34, 36. The Court
remanded to the district court with instructions to affirm the division’s grant of the
transfer. Id. ¶ 37.
{13} 	Though the Court rejected use of the term “property line” in the statute to
“inexorably” mean the boundary of the lot owned by the school, it emphasized that
its holding did not mean that “only the building or other structure used for educational
purposes falls within the definition of ‘school’” and stated that adjacent land,
including parking lots, might be considered a “school” if it is used for instructional

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purposes. 	Id. ¶¶ 27, 35. 	Rather, under its holding the term “property line” in the
statute means the boundary line around the property on which school activities
occur—which may or may not coincide with the boundary around the property owned
by the school.
{14} 	We are, of course, fully aware that this case presents a different factual scenario
from Hughes. Here, the parties agree that the appropriate starting measurement point
for the school is its property line. This reflects on apparent acknowledgment of all
parties that the entire parcel of land on which the school and Head Start program are
situated is used for school purposes. The question contested by the parties is whether
Hughes has anything to say about whether the Division’s decision to measure from
the edge of the licensed premises rather than from the edge of the parcel of land on
which it sits is appropriate under the statute. We conclude that Hughes provides a
useful guide for analysis.
{15} 	First, Hughes answers the City’s statutory construction argument. 	The City
recognizes that the term “property line” is not defined in the statute. See § 60-6B-10.
Nonetheless, the City urges us to give the term its “ordinary meaning” as it argues it
is commonly understood, i.e., “the legal boundary of a parcel of land.” 	It is clear,
however, that the Hughes Court rejected this interpretation of “property line.” Hughes
said that the nature of the use of the property was a relevant consideration in

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determining the proper starting point for measurement under the statute. 	1992-
NMSC-049, ¶¶ 28, 35. We adhere, as we must, to that interpretation of the statutory
language pertaining to the property line of a school.
{16} 	The same term—“property line”—is used in the statute when describing the
starting point of measurement from a “licensed premises.” 	Absent a compelling
reason to do so, it would be illogical and inconsistent to interpret “property line” to
mean one thing when applied to schools or churches in one part of a sentence but
another when applied to licensed premises later in the same sentence. See Ramirez v.
IBP Prepared Foods, 2001-NMCA-036, ¶ 16, 130 N.M. 559, 28 P.3d 1100 (stating,
“[i]n interpreting a statute, we look to the statute as a whole, [and] . . . attempt to
achieve internal consistency”), superseded by statute on other grounds as stated in
Baca v. Los Lunas Cmty. Programs, 2011-NMCA-008, 149 N.M. 198, 246 P.3d 1070.
Consequently, we conclude that the term “property line” as it relates to a licensed
premises is subject to functional analysis analogous to that in Hughes. See generally
N.M. Att’y Gen. Op. 74-18.
{17} 	The analysis of function as it relates to licensed premises is necessarily
somewhat different, however, because while the statute does not define “school,” it
does define “licensed premises.” See Section 60-3A-3(M). “[L]icensed premises” are
“the contiguous areas or areas connected by indoor passageways of a structure and the

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outside dining, recreation and lounge areas of the structure . . . that are under the direct
control of the licensee and from which the licensee is authorized to sell, serve or allow
the consumption of alcoholic beverages under the provisions of its license[.]” 	Id.
Thus the sale, service, or consumption of alcohol is limited to those areas, including
outdoor areas, permitted by license. 	See id.; cf. N.M. Att’y Gen. Op. 87-10 (1987)
(stating that separate licenses are required for two separate structures where there was
no way to get from one to the other without going outside and that a license permits
sales or services “within a distinct, designated area”). The licensed premises may or
may not be contiguous with the property owned by the licensee—or, in the case of
leased licensed premises, with the boundary of ownership of the property on which
the licensed premises sit. Cf. Texas Nat’l Theatres, Inc. v. City of Albuquerque, 1982-
NMSC-004, ¶¶ 13-14, 97 N.M. 282, 639 P.2d 569 (concluding that a zoning
enforcement officer’s measurement of the distance between the “lot line” of the
property on which an adult entertainment facility was situated and the “nearest
residential lot line” was reasonable where other provisions in the Comprehensive City
Zoning Code “indicate[d] that the regulation applies to more than just the structure”
and that zoning applies to “the entire lot and not only for the structures on the lot”).
The statutory definition informs the functional analysis because “licensed premises”

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are, by definition, coextensive with the areas in which alcohol may be served or sold.
This is the way the Director interpreted and applied the functional test in his decision.
{18} 	The City’s argument that, “[i]f the [Hughes] Court recognized that a parking lot
used by students meets the test of school property, then a parking lot used by
customers purchasing alcohol is likewise part of the licensed premises,” ignores the
fact that “licensed premises” is a defined term and that the license itself defines the
areas in which alcohol may be sold, served, or consumed. 	If the license does not
permit sales or service of alcohol in the parking lot, the parking lot cannot be part of
the licensed premises. On the other hand, assuming for the sake of argument that sale
or service of alcohol in the parking lot was permitted under the license, then that area
would be part of the “licensed premises” and would have to be accounted for when
measuring the distance to the nearest school or church.
{19} 	The City directs us to footnote nine in Hughes, in which the Court mused that
“[t]he part of the regulation prescribing that distances shall be measured to ‘the
building in which the liquor is proposed to be sold’ is probably invalid as conflicting
with the statutory requirement that the measurement begin at ‘the property line of the
licensed premises.’ ” Hughes, 1992-NMSC-049, ¶ 30 n.9. Although it recognizes that
the footnote is “undeniably dict[um] because the Court decided the issue on other
grounds,” the City argues that the footnote “elucidates the obvious[, i.e., that t]he

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regulation conflicts with the statute and is[,] therefore[,] invalid.” We agree that the
footnote is dictum and that the Court did not rely on the regulation; accordingly, we
give it little weight in our analysis. See id. (“[Whether the regulation conflicts with
the statute] is irrelevant for purposes of this case[.]”); see also State v. Johnson, 2001-
NMSC-001, ¶ 16, 130 N.M. 6, 15 P.3d 1233 (stating that although dicta is not
binding, “the Court of Appeals should give [dicta] adequate deference and not
disregard it summarily”). Furthermore, footnote nine refers to the regulation in effect
in 1992, not the regulation in effect at times relevant to this case.
{20} 	More importantly, we determine that the present regulation does not conflict
with the statute. Regulation 15.10.32.8 of the Administrative Code was promulgated
in 1997 and, unlike the regulation to which the Hughes Court referred, does not refer
to a “building” as a reference point in the determination of the distance between a
school or church and a licensed premises. 	Instead, it refers only to the licensed
premises, a term defined by statute. 	See § 60-3A-3(M). 	The present regulation
defines the measurement requirement as between the outer boundary of the portions
of school or church property actually used for instructional or religious purposes and
the outer boundary of the premises designated by the license.
All measurements . . . shall be . . . between the actual limits of [1] the
real property of the . . . school . . . in which there is regularly conducted
. . . educational functions . . . and [2] the licensed premises where
alcoholic beverages are proposed to be sold.

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15.10.32.8 NMAC (emphasis added). The regulation is, therefore, consistent with the
functional test set out in Hughes and hence the Court’s construction of the statute. See
1992-NMSC-049, ¶ 35 (stating that its holding does not require measurement only
from buildings used for instruction and that, rather, any land so used should be
included in determining the outer boundary of a “school” for purposes of the statute).
{21} 	Since, under Hughes, the determinative factor for the starting point for
measurement at the school or church end is the use of the school’s or church’s
property, we conclude that, similarly, the determinative factor here is the use of the
property at the other end of the measurement. 	Consistent with Hughes and the
statute’s definition of “licensed premises,” we hold that the phrase “property line of
the licensed premises” in Section 60-6B-10 refers to the outer boundary of the
licensed premises themselves, i.e., the premises actually used to sell, serve, or
consume alcohol.
{22} 	We note finally that the history of the statute and regulation indicates that the
Division’s interpretation is not contrary to the Legislature’s intent. 	Despite the
changes to the regulation in 1997, the Division’s method of measurement under
15.10.32.8 NMAC has been substantially the same for over thirty-five years. Hughes
was decided, and the functional test adopted, in 1992. 	1992-NMSC-049. 	Yet the
Legislature has not reacted to the Division’s methods or the Hughes holding. Even

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though the statute has been amended twice since 1981, neither amendment modified
the method of measurement. Compare 1981 N.M. Laws, ch. 39, § 45, with 1986 N.M.
Laws, ch. 29, § 1, and 1997 N.M. Laws, ch. 223, § 1. 	We conclude that the
Legislature, being aware of relevant law on the issue, considers the Division’s
regulation and the functional test to be consistent with the statute. See El Paso Elec.
Co. v. N.M. Pub. Regulation Comm’n, 2010-NMSC-048, ¶ 14, 149 N.M. 174, 246
P.3d 	443 	(“We 	assume 	the 	Legislature 	is 	aware 	of 	existing 	law, 	including
administrative regulations, which have the force of law.” (citation omitted)); State v.
Cleve, 1999-NMSC-017, ¶ 14, 127 N.M. 240, 980 P.2d 23 (concluding that case law
was consistent with Legislative intent where, even though the statute was amended
after the decision that interpreted it, the amendment made only “stylistic changes” and
did not address the Court’s interpretation); Alexander v. Anderson, 1999-NMCA-021,
¶ 17, 126 N.M. 632, 973 P.2d 884 (concluding that the fact that the Legislature did not
amend a statute for fifteen years meant that it “accepted [a regulation interpreting the
statute] as valid and consistent with the [statute]”).
CONCLUSION
{23} 	The district court erred in reversing the Director’s approval of Western’s
application to transfer of a liquor license to 5741 Airport Road, Santa Fe, New
Mexico. We remand for entry of an order affirming the Director’s decision.

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{24} 	IT IS SO ORDERED.
MICHAEL D. BUSTAMANTE, Judge
WE CONCUR:
LINDA M. VANZI, Judge
J. MILES HANISEE, Judge