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2024 Legislative Session Update
The New Mexico Legislature began its 2024 session on January 15, and it feels like we’ve been in a full sprint ever since. This session is limited to budgetary legislative proposals, any issues specially messaged by Governor Lujan Grisham, and legislation that was vetoed by the governor during the last session of the legislature in 2023. However, while the topics are limited, since the governor gave her State of the State address on opening day our industry has had a full plate. While there are a few budget-connected pieces of legislation we are following, it has been other proposals, included in the special message of the governor, which have taken most of our time and efforts in the first few weeks. Fortunately, Wednesday, January 31, is the last day bills can be filed for this session, so we will soon know all the proposed measures we’ll be contending with over the final few weeks.
In this section of The Standard, we provide a review of what has occurred so far during the first two weeks of the session:
Most bills of interest to our industry run through the House Energy and Natural Resources Committee (HENRC), and at this stage of the session that committee has seen most of our focus.
On Saturday, January 20, HENRC convened its first meeting of the session. This kickoff meeting lasted six and a half hours while hearing two bills. HB 41, the Clean Fuels bill, was debated for over four hours but was finally passed out on a party-line vote 7-4. The bill then moved to House Judiciary (HJC), where a committee substitute was voted out Do Pass. HB 41 is now scheduled to be heard on the House floor on January 30. The second bill heard on January 20 in HENRC was HB 48, the Royalty Rate Increase on State Lands bill. This bill was moved out of HENRC on another 7-4 party-line vote as well. The bill then moved on to House Commerce and Economic Development (HCEDC) where it was heard on January 29. The bill was passed out of HCEDC on a 6-5 vote, nearly along party lines. Its next stop will be the House floor.
For those that don’t follow the action in the New Mexico Legislature very often, unlike in Texas, bills in New Mexico often get referred to multiple committees in each chamber. Unless a bill is voted out of all committees in which it is heard with a “Do Pass” recommendation it is near impossible for that bill to make it back to the chamber floor for a final vote.
As to the meat at the center of the plate, the highest priority bill at this point in the session for the industry is HB 133, which proposed changes to the Oil and Gas Act. HB 133 had its hearing in HENRC on Thursday, January 25. However, while that was the first scheduled hearing on the Oil & Gas Act changes, it was not the first actual legislative conversation on HB 133.
From its introduction, HB 133 drew the attention and concern of not just those in the oil and gas industry, but those in the legislature who understand the industry’s importance to the state’s budget. On the first Friday of the session, members of Senate Finance (SFC), including Chairman George Munoz, grilled New Mexico Energy, Mineral and Natural Resources Department (EMNRD) Deputy Secretary Dylan Fuge over the impacts of the first proposed version of HB 133. Particular attention was directed at the setback provisions in the proposal, which have since been removed. While the bill wasn’t even on the committee agenda – instead Secretary Fuge was supposed to be pitching the requested EMNRD budget – the worrisome impacts of HB 133 on the entire state budget brought the proposed bill front and center.
Over the first weekend of the session, after the fated SFC hearing, a committee substitute (CS) for HB 133 was circulated with PBPA and other stakeholders as this CS HB 133 would be the bill presented in committee. For those who watched the SFC hearing live (or the archived hearing now available), it was hard not to believe the CS was a direct result of the treatment HB 133 received in SFC.
The CS HB 133 presented in HENRC on Thursday, January 25, while still opposed by PBPA, along with NMOGA and IPANM, did include dramatic improvements in comparison to the originally proposed HB 133. The CS HB 133 presentation, public comment, and debate from committee members lasted nearly four hours. While valid concerns were voiced by the trades, operators, and members of the committee from both the Republican and Democratic parties in opposition to the bill, ultimately CS HB 133 was voted Do Pass on a 6-5 vote. The vote was nearly partisan except for Rep. Cynthia Borrego (D-Bernalillo), who voted against the motion to pass, joining the four Republican committee members. The bill moved on to HJC where it was originally scheduled to be heard on January 29. The bill was not brought up on the 29th, however, but has now appeared on the agenda for the January 31 HJC hearing. With a full House floor schedule and several bills in front of it on the HJC agenda, it is possible the bill still does not get heard until Friday, February 2, but we shall see.
While the vote in HENRC moved the bill on to HJC, discussions have continued between industry, agency representatives, and other stakeholders on critical provisions in the bill, including the need for a tiered approach to financial assurances being statutory instead of being determined by agency rulemaking, a hard cap on civil penalties, and codifying the 98% gas capture rule already in place.
There are plenty of other bills being tracked by PBPA, and for more information on HB 133 or any other bills of interest being followed, please reach out to us. For a full list of PBPA-tracked legislation, please join our New Mexico Legislative Committee.
Please reach out to Stephen Robertson ([email protected]) for more information.
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