Reviewing Saturday’s House Floor Oil Production Tax Debate

IPANM (March 15, 2025) – The much discussed HB 548 Oil & Gas Equalization Tax Act tax increase has now morphed into a $150-million industry-only tax to pay for the $75-million HB14 (Amended Version) on the House side and a “spending-initiative-to-be-named-later” on the Senate side.

On Saturday afternoon, a spirited 3-hour debate (the House tax bill begins at 1:53:50) pitted Republican, basin-based legislators (Reps. Mark Murphy, Mark Duncan, Rod Montoya, & Jon Henry) opposing the latest version of the money grab vs. “tax-oil & gas-only” Democrat committee leaders (House Appropriations Chair Nathan Small & House Tax Chair Derrick Lente) who claim that not only is the additional tax money a good thing for industry, but that it is “owed” to the state because of industry’s success. Democrats creatively called the nomenclature of their actions as “Tax Justice” for the people of New Mexico against the oil & gas industry and “their billion dollar profits.”

At no time during the three-hour debate did Democrat defenders of the tax bill mention the potential damage the increase tax-hike will have independent operators. Republicans vehemently argued this point and others regarding the negative impacts. During the debate, Rep. Mark Murphy introduced HB403 Oil & Gas Fund Distribution & Uses as an amendment to fix the funding mechanisms of reclamation fund. Currently, only 2/17ths of the money already paid directly by industry is going into the Oil Reclamation Fund. The amendment would have corrected that oversight, but was voted down by Democrats during the debate.

The final bill HB14 tax increase was approved after a three-hour debate on the House side on a vote of 40-27 with the majority party Democrats pushing through the tax hike over all opposing House Republicans, joined by moderate House Democrat Joseph Sanchez.

SESSION – Oil Production Tax Morphs Into $150 Equitable Income Bill