As we roll into the last week of the New Mexico Legislative Session, the biggest concern is the budget. There are many closed door discussions occurring, but the talk is that the State will be over $300 million short in meeting its obligations for FY 16 which ends June 30th. The shortfall for next fiscal year FY 17 is expected to be close to $1B, which means that funds need to come from somewhere. There is talk of a $0.10 gas tax which could come up with $500 million and a full sweep of all Board/Commission reserves for an additional $180 million. While there may be talk about raiding the Permanent Fund which as to today is valued at over 16 billion, the Enabling Act of 1912 prohibits the use of these funds for anything other than education, and any increased distribution would require a change to the NM Constitution. Further, an Act of Congress may be necessary to expend any funds other than those already designated to the original 22 beneficiaries.

I have worked closely with NMOGA and Secretary Martin on SB 8, HB 112, Carlsbad Brine Well Remediation, to establish a five person committee that will be responsible for overseeing the remediation of that problem – including finding funding. IPANM had suggested several amendments, all of which were adopted, to clarify that the Committee only has authority to work on this problem for a ten year period and that NMOCD will remain the main regulatory and enforcing authority over this project.

On Wednesday morning, I testified as the expert witness on HM 81 which asks the Congressional delegation to get more involved and informed about the impacts of the ONRR unbundling issues. The bill passed committee and will be heard on the House Floor this weekend. HM 82, asking for Congressional support addressing concerns over Onshore Orders #3, #4 and #5 also came up in committee and were held due to a lack of votes. I expect it will sail out of committee tomorrow and will be heard either Saturday or Sunday on the House Floor.

In terms of tax breaks for industry, Representative Strickler’s HB 107 to amend the severance tax rate for gas from stripper wells and for oil stripper wells, has been held in House Ways and Means Committee – if any money is found. I have spoken to the sponsor, Chairman Jason Harper and members Townsend, Scott, Gallegos and Montoya who are all very supportive of this issue but there just isn’t any money. Thank you to IPANM members Mullins and McMinn for their excellent testimony on the bill. In terms of helping industry, we still have friends here in Santa Fe. I will be sending another email shortly regarding an upcoming industry meeting.

Thank you.
Karin