New Mexico 2025 Regular Session

New Mexico House Bill HB137 Compare Versions

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1-HENRC/HAAWC/HB 137/a
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28+HOUSE BILL 137
29+57TH LEGISLATURE - STATE OF NEW MEXICO - FIRST SESSION, 2025
30+INTRODUCED BY
31+Susan K. Herrera
2832 AN ACT
2933 RELATING TO WATER; ENACTING THE STRATEGIC WATER SUPPLY ACT;
3034 CREATING THE STRATEGIC WATER SUPPLY PROGRAM; AUTHORIZING THE
31-DEPARTMENT OF ENVIRONMENT AND THE OFFICE OF THE STATE
32-ENGINEER TO ENTER INTO CONTRACTS AND AWARD GRANTS FOR
33-PROJECTS INVOLVING BRACKISH WATER THAT ENHANCE THE STATE'S
34-FRESH WATER RESOURCES; CREATING THE STRATEGIC WATER SUPPLY
35+DEPARTMENT OF ENVIRONMENT, THE ENERGY, MINERALS AND NATURAL
36+RESOURCES DEPARTMENT AND THE OFFICE OF THE STATE ENGINEER TO
37+ENTER INTO CONTRACTS AND AWARD GRANTS FOR PROJECTS THAT REDUCE
38+THE STATE'S RELIANCE ON FRESH WATER RESOURCES OR EXPAND WATER
39+REUSE OPPORTUNITIES; CREATING THE STRATEGIC WATER SUPPLY
3540 PROGRAM FUND; PROVIDING REQUIREMENTS BEFORE A PERSON DRILLS
3641 WELLS OR RECOMPLETES EXISTING WELLS TO APPROPRIATE WATERS;
37-MAKING AN APPROPRIATION.
42+IMPOSING A FIVE-CENT ($.05) FEE ON BARRELS OF PRODUCED WATER
43+FROM OIL OR GAS WELLS AND DEPOSITING MONEY COLLECTED FROM THE
44+FEE INTO THE STRATEGIC WATER SUPPLY PROGRAM FUND; MAKING
45+APPROPRIATIONS.
3846 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
39-SECTION 1. SHORT TITLE.--Sections 1 through 4 of this
40-act may be cited as the "Strategic Water Supply Act".
41-SECTION 2. DEFINITIONS.--As used in the Strategic Water
42-Supply Act:
43-A. "brackish water" means water that is sourced
44-from an underground stream, channel, artesian basin,
45-reservoir or lake, having reasonably ascertainable
46-boundaries, that contains not less than one thousand parts
47-per million of dissolved solids and is not produced water;
48-B. "produced water" means a fluid that is an
49-incidental byproduct from drilling for or the production of
50-oil and gas;
51-C. "public entity" means a county, municipality, HENRC/HAAWC/HB 137/a
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74+SECTION 1. [NEW MATERIAL] SHORT TITLE.--Sections 1
75+through 5 of this act may be cited as the "Strategic Water
76+Supply Act".
77+SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the
78+Strategic Water Supply Act:
79+A. "brackish water" means water that:
80+(1) is sourced from an aquifer, the top of
81+which is at a depth of two thousand five hundred feet or more
82+below the surface of the ground;
83+(2) contains not less than one thousand parts
84+per million of dissolved solids; and
85+(3) is not produced water;
86+B. "produced water" means a fluid that is an
87+incidental byproduct from drilling for or the production of oil
88+and gas;
89+C. "public entity" means a county, municipality,
7890 political subdivision, state agency or state institution of
79-higher education; and
91+higher education;
8092 D. "treated brackish water" means brackish water
8193 that has undergone a process to remove or eliminate
8294 contaminants to meet applicable standards for water quality
8395 established pursuant to the Water Quality Act by the water
84-quality control commission.
85-SECTION 3. STRATEGIC WATER SUPPLY PROGRAM.--
86-A. The "strategic water supply program" is
87-created. Subject to the availability of funds and a project
88-that meets all eligibility requirements, the department of
89-environment and the office of the state engineer may each
90-enter into contracts or award grants for eligible projects
91-involving treated brackish water for the purposes of
92-enhancing the state's fresh water resources.
93-B. A contract entered into pursuant to this
94-section shall be in accordance with the Procurement Code,
95-except that the contract duration shall not exceed twenty
96-years in length, including extensions and renewals.
97-C. To be eligible for a strategic water supply
98-program contract, a project shall:
99-(1) comply with all applicable state,
100-federal, tribal and local governmental standards, permit
101-requirements and other provisions of law, including public
102-notice, public hearing processes and all other associated HENRC/HAAWC/HB 137/a
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96+quality control commission; and
97+E. "treated produced water" means produced water
98+that is reconditioned by mechanical or chemical processes into
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129-requirements related to public involvement, to protect
130-existing water rights, conservation of water within the
131-state, public welfare, public health and the environment;
132-(2) furnish financial assurance, other than
133-third party guarantees, to the department of environment in
134-accordance with rules promulgated by the water quality
135-control commission, running to the benefit of the state and
136-with any forfeitures deposited in the state treasury in the
137-strategic water supply program fund;
138-(3) clearly demonstrate how the project will
139-advance state, tribal or local government economic
140-development goals in accordance with the purposes of
141-enhancing the state's fresh water resources; and
142-(4) submit a specific, actionable and
143-measurable community benefits plan that includes a process
144-for community engagement and is designed to provide broadly
145-shared benefits to members of the public who are or may be
146-impacted by the strategic water supply program contract.
147-D. To be eligible for a strategic water supply
148-program grant, the grant recipient shall be a public entity
149-or federally recognized Indian nation, tribe or pueblo
150-located wholly or partially in New Mexico and the grant
151-project shall:
152-(1) be approved by the state engineer as
153-advancing the exploration, production or treatment of HENRC/HAAWC/HB 137/a
154-Page 4
127+a reusable form.
128+SECTION 3. [NEW MATERIAL] APPLICABILITY.--The strategic
129+water supply program applies only to produced water under the
130+jurisdiction of the water quality control commission and
131+brackish water.
132+SECTION 4. [NEW MATERIAL] STRATEGIC WATER SUPPLY
133+PROGRAM.--
134+A. The "strategic water supply program" is created.
135+Subject to the availability of funds and a project that meets
136+all eligibility requirements, the department of environment,
137+the energy, minerals and natural resources department and the
138+office of the state engineer may each enter into contracts or
139+award grants for eligible projects involving treated brackish
140+water or treated produced water for the purposes of reducing
141+the state's reliance on fresh water resources or expanding
142+water reuse opportunities.
143+B. A contract entered into pursuant to this section
144+shall be in accordance with the Procurement Code, except that
145+the contract duration shall not exceed twenty years in length,
146+including extensions and renewals.
147+C. To be eligible for a strategic water supply
148+program contract, a project shall:
149+(1) comply with all applicable state, tribal
150+and local governmental standards, permit requirements and other
151+provisions of law to protect public health and the environment;
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180-brackish water in New Mexico;
180+(2) furnish financial assurance, other than
181+third party guarantees, to the oil conservation division of the
182+energy, minerals and natural resources department for the life
183+of the project in accordance with rules of the division,
184+running to the benefit of the state and with any forfeitures
185+deposited in the state treasury in the strategic water supply
186+program fund;
187+(3) clearly demonstrate how the project will
188+advance state, tribal or local government economic development
189+goals in accordance with the purposes of reducing the state's
190+reliance on fresh water resources or expanding water reuse
191+opportunities; and
192+(4) submit a specific, actionable and
193+measurable community benefits plan that includes a process for
194+community engagement and is designed to provide broadly shared
195+benefits to members of the public who are or may be impacted by
196+the strategic water supply program contract.
197+D. To be eligible for a strategic water supply
198+program grant, a project shall:
199+(1) be approved by the state engineer as
200+advancing the exploration, production or treatment of brackish
201+water in New Mexico;
181202 (2) comply with applicable state, federal,
182-tribal and local governmental standards and permit
183-requirements and other provisions of law, including public
184-notice, public hearing processes and all other associated
185-requirements related to public involvement, to protect
186-existing water rights, conservation of water within the
187-state, public welfare, public health and the environment; and
188-(3) clearly demonstrate how the project will
189-advance state, tribal or local government economic
190-development goals in accordance with the purposes of
191-enhancing the state's fresh water resources.
192-E. The agency awarding a strategic water supply
193-contract shall publish the community benefits plan to the
194-agency's website.
195-F. When preparing a request for proposals pursuant
196-to Subsection C of this section or a grant solicitation
197-pursuant to Subsection D of this section, the agency shall:
198-(1) do so in accordance with the
199-State-Tribal Collaboration Act, where applicable; and
200-(2) consult with the secretary of economic
201-development.
202-G. The department of environment or the office of
203-the state engineer shall notify the state investment council
204-about new strategic water supply program contracts or grants HENRC/HAAWC/HB 137/a
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203+tribal and local governmental standards and permit requirements
204+and other provisions of law to protect public health and the
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231-and any opportunities for public input associated with the
232-strategic water supply program within two business days of
233-the date the agency publishes the new grant, contract or
234-public input opportunity to the general public.
235-H. When evaluating contract or grant proposals for
236-compliance with Subsection C or D of this section, the agency
237-shall evaluate how the projects in the proposal will limit
238-greenhouse gas emissions.
239-I. In connection with any strategic water supply
240-program contract or grant that is subject to the notice of
241-intention filing requirements pursuant to Section 72-12-26
242-NMSA 1978, the office of the state engineer shall provide an
243-opportunity for a federally recognized Indian nation, tribe
244-or pueblo located wholly or partially in New Mexico, a
245-person, a firm, a corporation or other entity to file an
246-objection or protest through a process consistent with the
247-provisions of Section 72-12-3 NMSA 1978 regarding a
248-determination by the state engineer made pursuant to Section
249-72-12-26 NMSA 1978.
250-SECTION 4. STRATEGIC WATER SUPPLY PROGRAM FUND.--
251-A. The "strategic water supply program fund" is
252-created as a nonreverting fund in the state treasury and
253-shall be administered by the department of environment. The
254-fund consists of distributions, appropriations, gifts,
255-grants, donations, income from investment of the fund and HENRC/HAAWC/HB 137/a
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233+environment;
234+(3) clearly demonstrate how the project will
235+advance state, tribal or local government economic development
236+goals in accordance with the purposes of reducing the state's
237+reliance on fresh water resources or expanding water reuse
238+opportunities; and
239+(4) be administered by or in partnership with
240+a public entity such that the public entity is the grant
241+recipient.
242+E. The agency awarding a strategic water supply
243+contract shall publish the community benefits plan to the
244+agency's website.
245+F. When evaluating grant or contract proposals for
246+compliance with Paragraph (3) of Subsection C or Paragraph (3)
247+of Subsection D of this section, the agency shall:
248+(1) do so in accordance with the State-Tribal
249+Collaboration Act, where applicable;
250+(2) consult with the secretary of economic
251+development; and
252+(3) evaluate how the projects in the proposals
253+will limit greenhouse gas emissions.
254+G. No contract shall be provided pursuant to the
255+provisions of the Strategic Water Supply Act for the production
256+of treated produced water except for treated produced water
257+uses that are in accordance with the Water Quality Act and
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282-fees collected pursuant to Section 70-13-6 NMSA 1978.
286+rules adopted by the water quality control commission.
287+SECTION 5. [NEW MATERIAL] STRATEGIC WATER SUPPLY PROGRAM
288+FUND.--
289+A. The "strategic water supply program fund" is
290+created in the state treasury and shall be administered by the
291+department of environment. The fund consists of distributions,
292+appropriations, gifts, grants, donations, income from
293+investment of the fund and fees collected pursuant to Section
294+70-13-6 NMSA 1978.
283295 B. Money in the fund is appropriated to the
284-department of environment and the office of the state
285-engineer for the purpose of administering the strategic water
286-supply program pursuant to Section 3 of the Strategic Water
287-Supply Act.
296+department of environment, the energy, minerals and natural
297+resources department and the office of the state engineer for
298+the purpose of administering the strategic water supply program
299+pursuant to Section 4 of the Strategic Water Supply Act and the
300+reporting and accounting of barrels of produced water pursuant
301+to Section 70-13-6 NMSA 1978.
288302 C. Expenditures from the fund shall be to the
289-department of environment or the office of the state engineer
290-by warrant of the secretary of finance and administration
291-pursuant to vouchers signed by both the secretary of
292-environment or the secretary's authorized representative and
293-the state engineer or the state engineer's authorized
294-representative.
295-SECTION 5. Section 72-12-26 NMSA 1978 (being Laws 1967,
296-Chapter 86, Section 2) is amended to read:
297-"72-12-26. NOTICE OF DRILLING--DEPTH AND LOCATION.--Any
298-person proposing to drill wells or recomplete existing wells
299-to appropriate waters referred to in Section 72-12-25 NMSA
300-1978 shall file a notice of intention to drill or recomplete
301-with the office of the state engineer in such form as the
302-state engineer shall prescribe and shall publish a notice, in
303-a newspaper of general circulation in the county in which the
304-proposed wells will be located once a week for three
305-consecutive weeks, stating the location and the proposed depth
306-of such wells, the purpose for which the water shall be used HENRC/HAAWC/HB 137/a
307-Page 7
303+department of environment, the energy, minerals and natural
304+resources department or the office of the state engineer by
305+warrant of the secretary of finance and administration pursuant
306+to vouchers signed by all of the following: the secretary of
307+environment or the secretary's authorized representative, the
308+secretary of energy, minerals and natural resources or the
309+secretary's authorized representative and the state engineer or
310+the state engineer's authorized representative.
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333-and an estimate of the volume of water to be used. The wells
334-shall not be drilled or recompleted prior to thirty days after
335-the last publication of the notice and until the state
336-engineer has determined that the use of water stated in the
337-notice will not impair existing water rights, be contrary to
338-the conservation of water within the state or be detrimental
339-to the public welfare of the state."
339+SECTION 6. Section 7-1-2 NMSA 1978 (being Laws 1965,
340+Chapter 248, Section 2, as amended) is amended to read:
341+"7-1-2. APPLICABILITY.--The Tax Administration Act
342+applies to and governs:
343+A. the administration and enforcement of the
344+following taxes or tax acts as they now exist or may hereafter
345+be amended:
346+(1) Income Tax Act;
347+(2) Withholding Tax Act;
348+(3) Oil and Gas Proceeds and Pass-Through
349+Entity Withholding Tax Act;
350+(4) Gross Receipts and Compensating Tax Act,
351+Interstate Telecommunications Gross Receipts Tax Act and Leased
352+Vehicle Gross Receipts Tax Act;
353+(5) Liquor Excise Tax Act;
354+(6) Local Liquor Excise Tax Act;
355+(7) any municipal local option gross receipts
356+tax or municipal compensating tax;
357+(8) any county local option gross receipts tax
358+or county compensating tax;
359+(9) Special Fuels Supplier Tax Act;
360+(10) Gasoline Tax Act;
361+(11) petroleum products loading fee, which fee
362+shall be considered a tax for the purpose of the Tax
363+Administration Act;
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392+(12) Alternative Fuel Tax Act;
393+(13) Cigarette Tax Act;
394+(14) Estate Tax Act;
395+(15) Railroad Car Company Tax Act;
396+(16) Investment Credit Act, rural job tax
397+credit, Laboratory Partnership with Small Business Tax Credit
398+Act, Technology Jobs and Research and Development Tax Credit
399+Act, Film Production Tax Credit Act, Affordable Housing Tax
400+Credit Act and high-wage jobs tax credit;
401+(17) Corporate Income and Franchise Tax Act;
402+(18) Uniform Division of Income for Tax
403+Purposes Act;
404+(19) Multistate Tax Compact;
405+(20) Tobacco Products Tax Act;
406+(21) the telecommunications relay service
407+surcharge imposed by Section 63-9F-11 NMSA 1978, which
408+surcharge shall be considered a tax for the purposes of the Tax
409+Administration Act;
410+(22) the Insurance Premium Tax Act;
411+(23) the Health Care Quality Surcharge Act;
412+(24) the Cannabis Tax Act; and
413+(25) the Health Care Delivery and Access Act;
414+B. the administration and enforcement of the
415+following taxes, surtaxes, advanced payments or tax acts as
416+they now exist or may hereafter be amended:
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445+(1) Resources Excise Tax Act;
446+(2) Severance Tax Act;
447+(3) any severance surtax;
448+(4) Oil and Gas Severance Tax Act;
449+(5) Oil and Gas Conservation Tax Act;
450+(6) Oil and Gas Emergency School Tax Act;
451+(7) Oil and Gas Ad Valorem Production Tax Act;
452+(8) Natural Gas Processors Tax Act;
453+(9) Oil and Gas Production Equipment Ad
454+Valorem Tax Act;
455+(10) Copper Production Ad Valorem Tax Act;
456+(11) any advance payment required to be made
457+by any act specified in this subsection, which advance payment
458+shall be considered a tax for the purposes of the Tax
459+Administration Act;
460+(12) Enhanced Oil Recovery Act;
461+(13) Natural Gas and Crude Oil Production
462+Incentive Act; and
463+(14) intergovernmental production tax credit
464+and intergovernmental production equipment tax credit;
465+C. the administration and enforcement of the
466+following taxes, surcharges, fees or acts as they now exist or
467+may hereafter be amended:
468+(1) Weight Distance Tax Act;
469+(2) the workers' compensation fee authorized
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498+by Section 52-5-19 NMSA 1978, which fee shall be considered a
499+tax for purposes of the Tax Administration Act;
500+(3) Uniform Unclaimed Property Act (1995);
501+(4) 911 emergency surcharge and the network
502+and database surcharge, which surcharges shall be considered
503+taxes for purposes of the Tax Administration Act;
504+(5) the solid waste assessment fee authorized
505+by the Solid Waste Act, which fee shall be considered a tax for
506+purposes of the Tax Administration Act;
507+(6) the water conservation fee imposed by
508+Section 74-1-13 NMSA 1978, which fee shall be considered a tax
509+for the purposes of the Tax Administration Act; [and ]
510+(7) the gaming tax imposed pursuant to the
511+Gaming Control Act; and
512+(8) the produced water fee imposed pursuant to
513+Section 70-13-6 NMSA 1978, which fee shall be considered a tax
514+for the purposes of the Tax Administration Act; and
515+D. the administration and enforcement of all other
516+laws, with respect to which the department is charged with
517+responsibilities pursuant to the Tax Administration Act, but
518+only to the extent that the other laws do not conflict with the
519+Tax Administration Act."
520+SECTION 7. Section 7-1-8.8 NMSA 1978 (being Laws 2019,
521+Chapter 87, Section 2, as amended) is amended to read:
522+"7-1-8.8. INFORMATION THAT MAY BE REVEALED TO OTHER STATE
523+.229178.3GLG
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551+AND LEGISLATIVE AGENCIES.--An employee of the department may
552+reveal confidential return information to the following
553+agencies; provided that a person who receives the information
554+on behalf of the agency shall be subject to the penalties in
555+Section 7-1-76 NMSA 1978 if the person fails to maintain the
556+confidentiality required:
557+A. a committee of the legislature for a valid
558+legislative purpose, return information concerning any tax or
559+fee imposed pursuant to the Cigarette Tax Act;
560+B. the attorney general, return information
561+acquired pursuant to the Cigarette Tax Act for purposes of
562+Section 6-4-13 NMSA 1978 and the master settlement agreement
563+defined in Section 6-4-12 NMSA 1978;
564+C. the commissioner of public lands, return
565+information for use in auditing that pertains to rentals,
566+royalties, fees and other payments due the state under land
567+sale, land lease or other land use contracts;
568+D. the secretary of health care authority or the
569+secretary's delegate under a written agreement with the
570+department:
571+(1) the last known address with date of all
572+names certified to the department as being absent parents of
573+children receiving public financial assistance, but only for
574+the purpose of enforcing the support liability of the absent
575+parents by the child support enforcement division or any
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604+successor organizational unit;
605+(2) return information needed for reports
606+required to be made to the federal government concerning the
607+use of federal funds for low-income working families;
608+(3) return information of low-income taxpayers
609+for the limited purpose of outreach to those taxpayers;
610+provided that the health care authority [department ] shall pay
611+the department for expenses incurred by the department to
612+derive the information requested by the health care authority
613+[department] if the information requested is not readily
614+available in reports for which the department's information
615+systems are programmed;
616+(4) return information required to administer
617+the Health Care Quality Surcharge Act and the Health Care
618+Delivery and Access Act; and
619+(5) return information in accordance with the
620+provisions of the Easy Enrollment Act;
621+E. the department of information technology, by
622+electronic media, a database updated quarterly that contains
623+the names, addresses, county of address and taxpayer
624+identification numbers of New Mexico personal income tax
625+filers, but only for the purpose of producing the random jury
626+list for the selection of petit or grand jurors for the state
627+courts pursuant to Section 38-5-3 NMSA 1978;
628+F. the state courts, the random jury lists produced
629+.229178.3GLG
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657+by the department of information technology under Subsection E
658+of this section;
659+G. the director of the New Mexico department of
660+agriculture or the director's authorized representative, upon
661+request of the director or representative, the names and
662+addresses of all gasoline or special fuel distributors,
663+wholesalers and retailers;
664+H. the public regulation commission, return
665+information with respect to the Corporate Income and Franchise
666+Tax Act required to enable the commission to carry out its
667+duties;
668+I. the state racing commission, return information
669+with respect to the state, municipal and county gross receipts
670+taxes paid by racetracks;
671+J. the gaming control board, tax returns of license
672+applicants and their affiliates as provided in Subsection E of
673+Section 60-2E-14 NMSA 1978;
674+K. the director of the workers' compensation
675+administration or to the director's representatives authorized
676+for this purpose, return information to facilitate the
677+identification of taxpayers that are delinquent or noncompliant
678+in payment of fees required by Section 52-1-9.1 or 52-5-19 NMSA
679+1978;
680+L. the secretary of workforce solutions or the
681+secretary's delegate, return information for use in enforcement
682+.229178.3GLG
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710+of unemployment insurance collections pursuant to the terms of
711+a written reciprocal agreement entered into by the department
712+with the secretary of workforce solutions for exchange of
713+information;
714+M. the New Mexico finance authority, information
715+with respect to the amount of municipal and county gross
716+receipts taxes collected by municipalities and counties
717+pursuant to any local option municipal or county gross receipts
718+taxes imposed, and information with respect to the amount of
719+governmental gross receipts taxes paid by every agency,
720+institution, instrumentality or political subdivision of the
721+state pursuant to Section 7-9-4.3 NMSA 1978;
722+N. the superintendent of insurance, return
723+information with respect to the premium tax and the health
724+insurance premium surtax;
725+O. the secretary of finance and administration or
726+the secretary's designee, return information concerning a
727+credit pursuant to the Film Production Tax Credit Act;
728+P. the secretary of economic development or the
729+secretary's designee, return information concerning a credit
730+pursuant to the Film Production Tax Credit Act;
731+Q. the secretary of public safety or the
732+secretary's designee, return information concerning the Weight
733+Distance Tax Act;
734+R. the secretary of transportation or the
735+.229178.3GLG
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763+secretary's designee, return information concerning the Weight
764+Distance Tax Act;
765+S. the secretary of energy, minerals and natural
766+resources or the secretary's designee, return information
767+concerning tax credits or deductions for which eligibility is
768+certified or otherwise determined by the secretary or the
769+secretary's designee and return information concerning the
770+produced water fee and to facilitate the identification of
771+taxpayers that are delinquent or noncompliant in payment of the
772+produced water fee pursuant to Section 70-13-6 NMSA 1978 ;
773+T. the secretary of environment or the secretary's
774+designee, return information concerning tax credits for which
775+eligibility is certified or otherwise determined by the
776+secretary or the secretary's designee; and
777+U. the secretary of state or the secretary's
778+designee, taxpayer information required to maintain voter
779+registration records and as otherwise provided in the Election
780+Code."
781+SECTION 8. Section 70-2-12 NMSA 1978 (being Laws 1978,
782+Chapter 71, Section 1, as amended) is amended to read:
783+"70-2-12. ENUMERATION OF POWERS.--
784+A. The oil conservation division of the energy,
785+minerals and natural resources department may:
786+(1) collect data;
787+(2) make investigations and inspections;
788+.229178.3GLG
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816+(3) examine properties, leases, papers, books
817+and records;
818+(4) examine, check, test and gauge oil and gas
819+wells, tanks, plants, refineries and all means and modes of
820+transportation and equipment;
821+(5) hold hearings;
822+(6) provide for the keeping of records and the
823+making of reports and for the checking of the accuracy of the
824+records and reports;
825+(7) limit and prorate production of crude
826+petroleum oil or natural gas or both as provided in the Oil and
827+Gas Act; and
828+(8) require either generally or in particular
829+areas certificates of clearance or tenders in connection with
830+the transportation of crude petroleum oil or natural gas or any
831+products of either or both oil and products or both natural gas
832+and products.
833+B. The oil conservation division may make rules and
834+orders for the purposes and with respect to the subject matter
835+stated in this subsection:
836+(1) to require dry or abandoned wells to be
837+plugged in a way so as to confine the crude petroleum oil,
838+natural gas or water in the strata in which it is found and to
839+prevent it from escaping into other strata; pursuant to Section
840+70-2-14 NMSA 1978, the division shall require financial
841+.229178.3GLG
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869+assurance conditioned for the performance of the rules;
870+(2) to prevent crude petroleum oil, natural
871+gas or water from escaping from strata in which it is found
872+into other strata;
873+(3) to require reports showing locations of
874+all oil or gas wells and for the filing of logs and drilling
875+records or reports;
876+(4) to prevent the drowning by water of any
877+stratum or part thereof capable of producing oil or gas or both
878+oil and gas in paying quantities and to prevent the premature
879+and irregular encroachment of water or any other kind of water
880+encroachment that reduces or tends to reduce the total ultimate
881+recovery of crude petroleum oil or gas or both oil and gas from
882+any pool;
883+(5) to prevent fires;
884+(6) to prevent "blow-ups" and "caving" in the
885+sense that the conditions indicated by such terms are generally
886+understood in the oil and gas business;
887+(7) to require wells to be drilled, operated
888+and produced in such manner as to prevent injury to neighboring
889+leases or properties;
890+(8) to identify the ownership of oil or gas
891+producing leases, properties, wells, tanks, refineries,
892+pipelines, plants, structures and all transportation equipment
893+and facilities;
894+.229178.3GLG
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922+(9) to require the operation of wells with
923+efficient gas-oil ratios and to fix such ratios;
924+(10) to fix the spacing of wells;
925+(11) to determine whether a particular well or
926+pool is a gas or oil well or a gas or oil pool, as the case may
927+be, and from time to time to classify and reclassify wells and
928+pools accordingly;
929+(12) to determine the limits of any pool
930+producing crude petroleum oil or natural gas or both and from
931+time to time redetermine the limits;
932+(13) to regulate the methods and devices
933+employed for storage in this state of oil or natural gas or any
934+product of either, including subsurface storage;
935+(14) to permit the injection of natural gas or
936+of any other substance into any pool in this state for the
937+purpose of repressuring, cycling, pressure maintenance,
938+secondary or any other enhanced recovery operations;
939+(15) to regulate the disposition, handling,
940+transport, storage, recycling, treatment and disposal of
941+produced water during, or for reuse in, the exploration,
942+drilling, production, treatment or refinement of oil or gas,
943+including disposal by injection pursuant to authority delegated
944+under the federal Safe Drinking Water Act, in a manner that
945+protects public health, the environment and fresh water
946+resources;
947+.229178.3GLG
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975+(16) to determine the limits of any area
976+containing commercial potash deposits and from time to time
977+redetermine the limits;
978+(17) to regulate and, where necessary,
979+prohibit drilling or producing operations for oil or gas within
980+any area containing commercial deposits of potash where the
981+operations would have the effect unduly to reduce the total
982+quantity of the commercial deposits of potash that may
983+reasonably be recovered in commercial quantities or where the
984+operations would interfere unduly with the orderly commercial
985+development of the potash deposits;
986+(18) to spend the oil and gas reclamation fund
987+and do all acts necessary and proper to plug dry and abandoned
988+oil and gas wells and to restore and remediate abandoned well
989+sites and associated production facilities in accordance with
990+the provisions of the Oil and Gas Act, the rules adopted under
991+that act and the Procurement Code, including disposing of
992+salvageable equipment and material removed from oil and gas
993+wells being plugged by the state;
994+(19) to make well price category
995+determinations pursuant to the provisions of the federal
996+Natural Gas Policy Act of 1978 or any successor act and, by
997+regulation, to adopt fees for such determinations, which fees
998+shall not exceed twenty-five dollars ($25.00) per filing. Such
999+fees shall be credited to the account of the oil conservation
1000+.229178.3GLG
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1028+division by the state treasurer and may be expended as
1029+authorized by the legislature;
1030+(20) to regulate the construction and
1031+operation of oil treating plants and to require the posting of
1032+bonds for the reclamation of treating plant sites after
1033+cessation of operations;
1034+(21) to regulate the disposition of
1035+nondomestic wastes resulting from the exploration, development,
1036+production or storage of crude oil or natural gas to protect
1037+public health and the environment; [and ]
1038+(22) to regulate the disposition of
1039+nondomestic wastes resulting from the oil field service
1040+industry, the transportation of crude oil or natural gas, the
1041+treatment of natural gas or the refinement of crude oil to
1042+protect public health and the environment, including
1043+administering the Water Quality Act as provided in Subsection E
1044+of Section 74-6-4 NMSA 1978; and
1045+(23) to require reporting and accounting of
1046+each barrel of produced water from an oil or gas well for the
1047+purpose of imposing the produced water barrel fee pursuant to
1048+Section 70-13-6 NMSA 1978 ."
1049+SECTION 9. Section 70-13-1 NMSA 1978 (being Laws 2019,
1050+Chapter 197, Section 1) is amended to read:
1051+"70-13-1. SHORT TITLE.--[Sections 1 through 5 of this
1052+act] Chapter 70, Article 13 NMSA 1978 may be cited as the
1053+.229178.3GLG
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1081+"Produced Water Act"."
1082+SECTION 10. A new section of the Produced Water Act,
1083+Section 70-13-6 NMSA 1978, is enacted to read:
1084+"70-13-6. [NEW MATERIAL ] FEES--REGULATION AND
1085+REPORTING.--
1086+A. Until January 1, 2036, there is imposed on the
1087+working interest owners of an oil or gas well in New Mexico a
1088+fee of five cents ($.05) per barrel of produced water from the
1089+oil or gas well, as reported to the taxation and revenue
1090+department by the oil conservation division of the energy,
1091+minerals and natural resources department, regardless of the
1092+ultimate destination of that produced water, except for
1093+produced water that is:
1094+(1) used for enhanced or secondary oil;
1095+(2) recycled or reused at a well or facility
1096+that is permitted by the oil conservation division of the
1097+energy, minerals and natural resources department; or
1098+(3) for a use regulated by the water quality
1099+control commission pursuant to the Water Quality Act and for
1100+which a permit from the department of environment is required.
1101+B. The fee imposed by this section may be referred
1102+to as the "produced water fee" and shall be imposed, collected
1103+and administered by the taxation and revenue department in
1104+accordance with the provisions of the Tax Administration Act.
1105+C. The owner or operator of an oil or gas well
1106+.229178.3GLG
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1134+shall report the monthly production volume of produced water on
1135+or before the fifteenth day of the second month following the
1136+month of the production in the electronic form and manner
1137+required by the oil conservation division of the energy,
1138+minerals and natural resources department. An owner or
1139+operator may apply to the oil conservation division for an
1140+exemption from the electronic filing requirement based upon a
1141+demonstration that such requirement would be an economic or
1142+other hardship. Within sixty days of receiving this report,
1143+the oil conservation division shall report the volume of
1144+produced water from oil and gas wells to the taxation and
1145+revenue department.
1146+ D. The produced water fee shall be paid to the
1147+taxation and revenue department within sixty days of the
1148+monthly volume report required pursuant to Subsection C of this
1149+section, and the department shall promulgate rules to provide
1150+for the required manner and form of collection of the produced
1151+water fee.
1152+E. All money received from the fees imposed
1153+pursuant to Subsection A of this section shall be delivered to
1154+the state treasurer and deposited in the strategic water supply
1155+program fund.
1156+F. The oil conservation division of the energy,
1157+minerals and natural resources department shall promulgate
1158+rules for mandatory reporting and accounting of produced water
1159+.229178.3GLG
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1187+from an oil or gas well."
1188+SECTION 11. Section 72-12-26 NMSA 1978 (being Laws 1967,
1189+Chapter 86, Section 2) is amended to read:
1190+"72-12-26. NOTICE OF DRILLING--DEPTH AND LOCATION .--Any
1191+person proposing to drill wells or recomplete existing wells to
1192+appropriate waters referred to in Section [1 of this act ]
1193+72-12-25 NMSA 1978 shall file a notice of intention to drill or
1194+recomplete with the office of the state engineer in such form
1195+as the state engineer shall prescribe and shall publish a
1196+notice, in a newspaper of general circulation in the county in
1197+which the proposed wells will be located once a week for three
1198+consecutive weeks, stating the location and the proposed depth
1199+of such wells, the purpose for which the water shall be used
1200+and an estimate of the volume of water to be used. [Said ] The
1201+wells shall not be drilled or recompleted prior to [10 ] ten
1202+days after the last publication of [such ] the notice and until
1203+the state engineer has determined that the use of water stated
1204+in the notice will not impair existing water rights, be
1205+contrary to the conservation of water within the state or be
1206+detrimental to the public welfare of the state ."
1207+SECTION 12. APPROPRIATIONS.--
1208+A. Seventy-five million dollars ($75,000,000) is
1209+appropriated from the general fund to the strategic water
1210+supply program fund for expenditure in fiscal year 2026 and
1211+subsequent fiscal years for the purposes of the fund. Any
1212+.229178.3GLG
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1240+unexpended or unencumbered balance remaining at the end of a
1241+fiscal year shall not revert to the general fund.
1242+B. Twenty-eight million seven hundred fifty
1243+thousand dollars ($28,750,000) is appropriated from the general
1244+fund to the board of regents of the New Mexico institute of
1245+mining and technology for expenditure in fiscal years 2026
1246+through 2028 for aquifer monitoring and improved ground water
1247+characterization. Any unexpended or unencumbered balance
1248+remaining at the end of fiscal year 2028 shall revert to the
1249+general fund.
1250+C. Four million dollars ($4,000,000) is
1251+appropriated from the general fund to the board of regents of
1252+New Mexico state university for expenditure in fiscal years
1253+2026 through 2028 for innovation, research, monitoring, support
1254+and development of technology associated with potential
1255+projects for a strategic water supply program grant or
1256+contract. Any unexpended or unencumbered balance remaining at
1257+the end of fiscal year 2028 shall revert to the general fund.
1258+- 24 -
1259+.229178.3GLG