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HOUSE BILL 259
57
TH LEGISLATURE
-
STATE
OF
NEW
MEXICO
-
FIRST SESSION
,
2025
INTRODUCED BY
Matthew McQueen and Kristina Ortez
AN ACT
RELATING TO NATURAL RESOURCES; INCREASING CIVIL PENALTIES
ASSESSED FOR VIOLATIONS OF THE OIL AND GAS ACT; INCREASING
CERTAIN APPLICATION FEES IN THE OIL AND GAS ACT AND ADJUSTING
THEM FOR INFLATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 70-2-31 NMSA 1978 (being Laws 1981,
Chapter 362, Section 1, as amended) is amended to read:
"70-2-31. VIOLATIONS OF THE OIL AND GAS ACT--PENALTIES.--
A. Whenever the division determines that a person
violated or is violating the Oil and Gas Act or any provision
of any rule, order, permit or authorization issued pursuant to
that act, the division may seek compliance and civil penalties
by:
(1) issuing a notice of violation;
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(2) commencing a civil action in district
court for appropriate relief, including injunctive relief; or
(3) issuing a temporary cessation order if the
division determines that the violation is causing or will cause
an imminent danger to public health or safety or a significant
imminent environmental harm. The cessation order will remain
in effect until the earlier of when the violation is abated or
thirty days unless a hearing is held before the division and a
new order is issued.
B. A notice of violation issued pursuant to
Paragraph (1) of Subsection A of this section shall:
(1) state with reasonable specificity the
nature of the violation; [shall ]
(2) require compliance immediately or within a
specified time period; [shall ]
(3) provide notice of the availability of an
informal review and the date of a hearing before the division;
and [shall]
(4) provide notice of potential sanctions,
including assessing a penalty, suspending, canceling or
terminating a permit or authorization, shutting in a well and
plugging and abandonment of a well and forfeiting financial
assurance pursuant to Section 70-2-14 NMSA 1978.
C. If the notice of violation is not resolved
informally within thirty days after service of the notice, the
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division shall hold a hearing and determine whether the
violation should be upheld and whether any sanctions, including
civil penalties, shall be assessed. In assessing a penalty
authorized by this section, the division shall take into
account the seriousness of the violation, any good faith
efforts to comply with the applicable requirements, any history
of noncompliance under the Oil and Gas Act and other relevant
factors. When a decision is rendered by the division after a
hearing, any party of record adversely affected shall have the
right to have the matter heard de novo before the commission
pursuant to Section 70-2-13 NMSA 1978.
D. Any civil penalty assessed by a court or by the
division or commission pursuant to this section may not exceed
[two thousand five hundred dollars ($2,500) ] ten thousand
dollars ($10,000) per day of noncompliance for each violation
unless the violation presents a risk either to the health or
safety of the public or of causing significant environmental
harm, or unless the noncompliance continues beyond a time
specified in the notice of violation or order issued by the
division, commission or court, whereupon the civil penalty may
not exceed [ten thousand dollars ($10,000) ] twenty-five
thousand dollars ($25,000) per day of noncompliance for each
violation. No penalty assessed by the division or commission
after a hearing may exceed [two hundred thousand dollars
($200,000)] three million six hundred fifty thousand dollars
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($3,650,000); provided that such limitation does not apply to
penalties assessed by a court.
E. The commission shall make rules, pursuant to
Section 70-2-12.2 NMSA 1978, providing procedures for the
issuance of notices of violations, the assessment of penalties
and the conduct of informal proceedings and hearings pursuant
to this section.
F. It is unlawful, subject to a criminal penalty of
a fine of not more than five thousand dollars ($5,000) or
imprisonment for a term not exceeding three years or both such
fine and imprisonment, for any person to knowingly and
willfully:
(1) violate any provision of the Oil and Gas
Act or any rule, regulation or order of the commission or the
division issued pursuant to that act; or
(2) do any of the following for the purpose of
evading or violating the Oil and Gas Act or any rule,
regulation or order of the commission or the division issued
pursuant to that act:
(a) make any false entry or statement in
a report required by the Oil and Gas Act or by any rule,
regulation or order of the commission or division issued
pursuant to that act;
(b) make or cause to be made any false
entry in any record, account or memorandum required by the Oil
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and Gas Act or by any rule, regulation or order of the
commission or division issued pursuant to that act;
(c) omit or cause to be omitted from any
such record, account or memorandum full, true and correct
entries; or
(d) remove from this state or destroy,
mutilate, alter or falsify any such record, account or
memorandum.
G. For the purposes of Subsection F of this
section, each day of violation shall constitute a separate
offense.
H. Any person who knowingly and willfully procures,
counsels, aids or abets the commission of any act described in
Subsection A or F of this section shall be subject to the same
penalties as are prescribed in Subsection D or F of this
section."
SECTION 2. Section 70-2-39 NMSA 1978 (being Laws 2019,
Chapter 260, Section 1) is amended to read:
"70-2-39. FEES--[APPROPRIATION ] FEE ADJUSTMENTS--OIL
CONSERVATION DIVISION SYSTEMS AND HEARINGS FUND .--
A. The following fees, as adjusted for inflation
pursuant to Subsection B of this section , are required to be
paid to the [oil conservation ] division [of the energy,
minerals and natural resources department ] with each
application for:
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(1) [with each application for ] a non-federal
and non-Indian permit to drill, deepen, plug back or reenter a
well, the applicant shall submit to the division a
nonrefundable fee of [five hundred dollars ($500) ] one thousand
five hundred dollars ($1,500) ;
(2) [with each individual application for ]
administrative approval of a non-standard location, downhole
commingle, surface commingle, off-lease measurement, release
notification and corrective action, change of operator,
application for modification to surface waste management
facility, request for the creation of a new pool, proposed
alternative method permit or closure plan application or
authorization to move produced water, the applicant shall
submit to the division a nonrefundable fee of [one hundred
fifty dollars ($150)] four hundred fifty dollars ($450) ;
(3) [with each application for ] a fluid
injection well permit, the applicant shall submit to the
division a nonrefundable fee of [five hundred dollars ($500) ]
one thousand five hundred dollars ($1,500) per well;
(4) [with each application for ] a permit for a
commercial surface waste management facility, landfill or
landfarm, the applicant shall submit to the division a
nonrefundable fee of ten thousand dollars ($10,000) per
facility;
(5) [with each application for ] an
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administrative hearing, re-hearing or de novo hearing before
the division or commission, the applicant shall submit to the
division a nonrefundable fee of [five hundred dollars ($500) ]
one thousand five hundred dollars ($1,500) per application; and
(6) [with each application for ] a continuance
of an administrative hearing, re-hearing or de novo hearing
before the division or commission, the applicant shall submit
to the division a nonrefundable fee of [one hundred fifty
dollars ($150)] four hundred fifty dollars ($450) per
application.
B. On January 1, 2027 and on January 1 of each
successive year, the division may adjust for inflation the fees
required in Subsection A of this section by multiplying the fee
as of January 1, 2026 by a fraction, the numerator of which is
the consumer price index ending in September of the prior year
and the denominator of which is the consumer price index ending
in September 2025; provided that the fees shall not be adjusted
below the minimum amounts provided in Subsection A of this
section as a result of a decrease in the consumer price index.
By November 1, 2026 and by November 1 of each successive year,
the division shall post on its website the fees required in
Subsection A of this section for the subsequent year.
[B.] C. An application for an administrative
hearing, re-hearing or de novo hearing before the [oil
conservation] division or commission will be considered to be
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materially amended if the amendment is made for a purpose other
than to correct:
(1) typographical errors; or
(2) clerical errors.
[C.] D. The "oil conservation division systems and
hearings fund" is created in the state treasury as a
nonreverting fund. All funds received by the [oil
conservation] division from fees imposed pursuant to Subsection
A of this section shall be delivered to the state treasurer and
deposited in the fund. Disbursements from the fund shall be
made upon warrants drawn by the secretary of finance and
administration pursuant to vouchers signed by the secretary of
energy, minerals and natural resources or the secretary's
authorized representative. Money in the fund is subject to
appropriation by the legislature to the division to develop and
modernize the division's online application processing system,
online case management system, online data reporting and
visualization systems and online case file system and for other
technological and equipment upgrades necessary to support the
efficient and transparent implementation and enforcement of the
Oil and Gas Act, including hiring necessary information
technology personnel, and for hearing administration costs.
Any unexpended or unencumbered balance remaining in the fund at
the end of a fiscal year shall not revert to the general fund.
[Money in the fund in fiscal year 2020 may be expended by the
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division for the purposes of the fund. ]
E. As used in this section, "consumer price index"
means the average of the monthly consumer price indexes or its
successor indexes, not seasonally adjusted, for urban consumers
of the entire United States, as published by the United States
department of labor for the month ending September 30. "
SECTION 3. EFFECTIVE DATE.--The effective date of the
provisions of this act is July 1, 2025.
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