Independent Petroleum Association of New Mexico

New Mexico Legislative Status Report

The following bills that may be of interest to our members have been
introduced in the Second Regular Session of New Mexico's 45th Legislature,
which bills will be monitored during the Session, and I will continue to be
alert for any other developments that might specifically affect our
industry:

HB 165--Tribal Capital Improvements Tax Credit:
Introduced by Representative Ben Lujan, Dem., Dist. 46 (Santa Fe). Would
provide that one liable for the oil and gas severance tax, conservation tax
or emergency school tax on production from Indian tribal land will have a
credit each month equal to the lesser of the tax that is exclusively
dedicated to fund capital improvement projects on the tribal land (but not
commercial buildings) imposed on such production by the Indian tribe, or 2%
of the taxable value of such production. The burden of showing entitlement
to this credit would be on the taxpayer, who must furnish proof of payment
of the tribal tax. This bill was assigned to the House Energy & Natural
Resources and Taxation & Revenue Committees. On Friday, January 25, a
hearing was held before the former, where it was temporarily tabled until
Monday, January 28, at 8:30 a.m., to allow industry and the Jicarilla Apache
Tribe to try to agree on its language.

HJM 17--Coordinated Oil & Gas Permitting Process:
Introduced by Representative Patricia A. Lundstrom, Dem., Dist. 5
(McKinley).  Would request that the Department of Environment, the Oil
Conservation Division and the federal Bureau of Land Management cooperate in
the development of a coordinated permit process for oil and gas activities.
This joint memorial was assigned to the House Energy & Natural Resources and
Business & Industry Committees, and a hearing before the former will be held
on Monday, January 28, at 8:30 a.m.

SB 16--Lea and Carlsbad Conservation District Study:
Introduced by Senator Carroll H. Leavell, Rep. Dist. 41 (Eddy & Lea). Would
appropriate $500,000 to New Mexico State University for Fiscal Year 2003 for
a study by the Lea and Carlsbad Soil and Water Conservation Districts of
issues related to the use of water produced by oil and gas exploration from
"deep underground." This bill was found germane by the Senate Committees
Committee and, on Thursday, January 24, a hearing was held before the Senate
Conservation Committee, where it received a "Do Pass" and was sent to the
Senate Finance Committee.

I will continue to keep you posted concerning any changes or additional
issues.

Tom Nance
IPANM Executive Director
January 27, 2002