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SENATE BILL 178
57
TH LEGISLATURE
-
STATE
OF
NEW
MEXICO
-
FIRST SESSION
,
2025
INTRODUCED BY
Harold Pope
AN ACT
RELATING TO WATER; AMENDING AND ENACTING SECTIONS OF THE
PRODUCED WATER ACT; AMENDING THE WATER QUALITY ACT; AMENDING
THE TAX ADMINISTRATION ACT; RESTRICTING THE USE OF PRODUCED
WATER OFF THE OILFIELD FOR RESEARCH PURPOSES ONLY; IMPOSING A
FIVE-CENT ($.05) PRODUCED WATER FEE ON BARRELS OF PRODUCED
WATER FROM OIL OR GAS WELLS; CREATING THE PLUGGING AND
REMEDIATING ABANDONED WELLS FUND; DEPOSITING MONEY COLLECTED
FROM THE PRODUCED WATER FEE INTO THE PLUGGING AND REMEDIATING
ABANDONED WELLS FUND; MAKING AN APPROPRIATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. A new section of the Produced Water Act is
enacted to read:
"[NEW MATERIAL] FEES--PRODUCED WATER FEE--IMPOSITION AND
ADMINISTRATION--PLUGGING AND REMEDIATING ABANDONED WELLS
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FUND--CREATION.--
A. There is imposed on the working interest owners
of an oil or gas well in New Mexico a fee of five cents ($.05)
per barrel of produced water from the oil or gas well, except
for produced water that is:
(1) used for enhanced or secondary oil;
(2) recycled or reused at a well or facility
that is permitted by the oil conservation division of the
energy, minerals and natural resources department; or
(3) for a use regulated by the water quality
control commission pursuant to the Water Quality Act and for
which a permit from the department of environment is required.
B. The fee imposed by this section may be referred
to as the "produced water fee".
C. The "plugging and remediating abandoned wells
fund" is created as a nonreverting fund in the state treasury.
Money in the fund shall be administered by the oil conservation
division to plug abandoned wells and remediate well sites.
Money in the fund is appropriated to the division for plugging
and remediating abandoned wells pursuant to rules promulgated
by the division.
D. The produced water fee shall be collected by the
taxation and revenue department in a manner prescribed by that
department. All money collected by the taxation and revenue
department from the produced water fee shall be deposited in
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the plugging and remediating abandoned wells fund.
E. The produced water fee shall be paid to the
taxation and revenue department on or before the twenty-fifth
day of the month following the month in which the water is
produced.
F. The oil conservation division shall promulgate
rules to require reporting and accounting of each barrel of
produced water for purposes of this section.
G. The taxation and revenue department shall
administer and enforce the collection of the produced water
fee, and the Tax Administration Act applies to the
administration and enforcement of the fee."
SECTION 2. Section 70-13-1 NMSA 1978 (being Laws 2019,
Chapter 197, Section 1) is amended to read:
"70-13-1. SHORT TITLE.--[Sections 1 through 5 of this
act] Chapter 70, Article 13 NMSA 1978 may be cited as the
"Produced Water Act"."
SECTION 3. Section 74-6-4 NMSA 1978 (being Laws 1967,
Chapter 190, Section 4, as amended) is amended to read:
"74-6-4. DUTIES AND POWERS OF COMMISSION.--The
commission:
A. may accept and supervise the administration of
loans and grants from the federal government and from other
sources, public or private, which loans and grants shall not be
expended for other than the purposes for which provided;
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B. shall adopt a comprehensive water quality
management program and develop a continuing planning process;
C. shall not adopt or promulgate a standard or
regulation that exceeds a grant of rulemaking authority listed
in the statutory section of the Water Quality Act authorizing
the standard or regulation;
D. shall adopt water quality standards for surface
and ground waters of the state based on credible scientific
data and other evidence appropriate under the Water Quality
Act. The standards shall include narrative standards and, as
appropriate, the designated uses of the waters and the water
quality criteria necessary to protect such uses. The standards
shall at a minimum protect the public health or welfare,
enhance the quality of water and serve the purposes of the
Water Quality Act. In making standards, the commission shall
give weight it deems appropriate to all facts and
circumstances, including the use and value of the water for
water supplies, propagation of fish and wildlife, recreational
purposes and agricultural, industrial and other purposes;
E. shall adopt, promulgate and publish regulations
to prevent or abate water pollution in the state or in any
specific geographic area, aquifer or watershed of the state or
in any part thereof, or for any class of waters, and to govern
the disposal of septage and sludge and the use of sludge for
various beneficial purposes. The regulations governing the
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disposal of septage and sludge may include the use of tracking
and permitting systems or other reasonable means necessary to
assure that septage and sludge are designated for disposal in,
and arrive at, disposal facilities, other than facilities on
the premises where the septage and sludge is generated, for
which a permit or other authorization has been issued pursuant
to the federal act or the Water Quality Act. Regulations may
specify a standard of performance for new sources that reflects
the greatest reduction in the concentration of water
contaminants that the commission determines to be achievable
through application of the best available demonstrated control
technology, processes, operating methods or other alternatives,
including where practicable a standard permitting no discharge
of pollutants. In making regulations, the commission shall
give weight it deems appropriate to all relevant facts and
circumstances, including:
(1) the character and degree of injury to or
interference with health, welfare, environment and property;
(2) the public interest, including the social
and economic value of the sources of water contaminants;
(3) the technical practicability and economic
reasonableness of reducing or eliminating water contaminants
from the sources involved and previous experience with
equipment and methods available to control the water
contaminants involved;
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(4) the successive uses, including domestic,
commercial, industrial, pastoral, agricultural, wildlife and
recreational uses;
(5) feasibility of a user or a subsequent user
treating the water before a subsequent use;
(6) property rights and accustomed uses; and
(7) federal water quality requirements;
F. shall assign responsibility for administering
its regulations to constituent agencies so as to assure
adequate coverage and prevent duplication of effort. To this
end, the commission may make such classification of waters and
sources of water contaminants as will facilitate the assignment
of administrative responsibilities to constituent agencies.
The commission shall also hear and decide disputes between
constituent agencies as to jurisdiction concerning any matters
within the purpose of the Water Quality Act. In assigning
responsibilities to constituent agencies, the commission shall
give priority to the primary interests of the constituent
agencies. The department of environment shall provide
technical services, including certification of permits pursuant
to the federal act, and shall maintain a repository of the
scientific data required by the Water Quality Act;
G. may enter into or authorize constituent agencies
to enter into agreements with the federal government or other
state governments for purposes consistent with the Water
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Quality Act and receive and allocate to constituent agencies
funds made available to the commission;
H. may grant an individual variance from any
regulation of the commission whenever it is found that
compliance with the regulation will impose an unreasonable
burden upon any lawful business, occupation or activity. The
commission may only grant a variance conditioned upon a person
effecting a particular abatement of water pollution within a
reasonable period of time. Any variance shall be granted for
the period of time specified by the commission. The commission
shall adopt regulations specifying the procedure under which
variances may be sought, which regulations shall provide for
the holding of a public hearing before any variance may be
granted;
I. may adopt regulations to require the filing with
it or a constituent agency of proposed plans and specifications
for the construction and operation of new sewer systems,
treatment works or sewerage systems or extensions,
modifications of or additions to new or existing sewer systems,
treatment works or sewerage systems. Filing with and approval
by the federal housing administration of plans for an extension
to an existing or construction of a new sewerage system
intended to serve a subdivision solely residential in nature
shall be deemed compliance with all provisions of this
subsection;
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J. may adopt regulations requiring notice to it or
a constituent agency of intent to introduce or allow the
introduction of water contaminants into waters of the state;
K. shall specify in regulations the measures to be
taken to prevent water pollution and to monitor water quality.
The commission may adopt regulations for particular industries.
The commission shall adopt regulations for the dairy industry
and the copper industry. The commission shall consider, in
addition to the factors listed in Subsection E of this section,
the best available scientific information. The regulations may
include variations in requirements based on site-specific
factors, such as depth and distance to ground water and
geological and hydrological conditions. The constituent agency
shall establish an advisory committee composed of persons with
knowledge and expertise particular to the industry category and
other interested stakeholders to advise the constituent agency
on appropriate regulations to be proposed for adoption by the
commission. The regulations shall be developed and adopted in
accordance with a schedule approved by the commission. The
schedule shall incorporate an opportunity for public input and
stakeholder negotiations;
L. may adopt regulations establishing pretreatment
standards that prohibit or control the introduction into
publicly owned sewerage systems of water contaminants that are
not susceptible to treatment by the treatment works or that
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would interfere with the operation of the treatment works;
M. shall not require a permit respecting the use of
water in irrigated agriculture, except in the case of the
employment of a specific practice in connection with such
irrigation that documentation or actual case history has shown
to be hazardous to public health or the environment or for the
use of produced water;
N. shall not require a permit for applying less
than two hundred fifty gallons per day of private residential
gray water originating from a residence for the resident's
household gardening, composting or landscape irrigation if:
(1) a constructed gray water distribution
system provides for overflow into the sewer system or on-site
wastewater treatment and disposal system;
(2) a gray water storage tank is covered to
restrict access and to eliminate habitat for mosquitos or other
vectors;
(3) a gray water system is sited outside of a
floodway;
(4) gray water is vertically separated at
least five feet above the ground water table;
(5) gray water pressure piping is clearly
identified as a nonpotable water conduit;
(6) gray water is used on the site where it is
generated and does not run off the property lines;
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(7) gray water is applied in a manner that
minimizes the potential for contact with people or domestic
pets;
(8) ponding is prohibited, application of gray
water is managed to minimize standing water on the surface and
to ensure that the hydraulic capacity of the soil is not
exceeded;
(9) gray water is not sprayed;
(10) gray water is not discharged to a
watercourse; and
(11) gray water use within municipalities or
counties complies with all applicable municipal or county
ordinances enacted pursuant to Chapter 3, Article 53 NMSA 1978;
O. shall coordinate application procedures and
funding cycles for loans and grants from the federal government
and from other sources, public or private, with the local
government division of the department of finance and
administration pursuant to the New Mexico Community Assistance
Act;
P. shall adopt [regulations ] rules to be
administered by the department of environment for the
[discharge, handling, transport, storage, recycling or
treatment for the disposition of treated produced water,
including disposition in road construction maintenance, roadway
ice or dust control or other construction, or in the
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application of treated produced water to land, for activities
unrelated to the exploration, drilling, production, treatment
or refinement of oil or gas ] use of produced water permitted by
the department. Produced water shall be used for research
purposes only, and permits for use shall not allow the:
(1) discharge of produced water; or
(2) use of produced water for agriculture,
irrigation, potable water supplies, aquifer recharge,
industrial processes, environmental restoration, road
construction maintenance, roadway ice or dust control or other
construction; and
Q. may adopt regulations to be administered by the
department of environment for surface water discharges."
SECTION 4. Section 7-1-2 NMSA 1978 (being Laws 1965,
Chapter 248, Section 2, as amended) is amended to read:
"7-1-2. APPLICABILITY.--The Tax Administration Act
applies to and governs:
A. the administration and enforcement of the
following taxes or tax acts as they now exist or may hereafter
be amended:
(1) Income Tax Act;
(2) Withholding Tax Act;
(3) Oil and Gas Proceeds and Pass-Through
Entity Withholding Tax Act;
(4) Gross Receipts and Compensating Tax Act,
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Interstate Telecommunications Gross Receipts Tax Act and Leased
Vehicle Gross Receipts Tax Act;
(5) Liquor Excise Tax Act;
(6) Local Liquor Excise Tax Act;
(7) any municipal local option gross receipts
tax or municipal compensating tax;
(8) any county local option gross receipts tax
or county compensating tax;
(9) Special Fuels Supplier Tax Act;
(10) Gasoline Tax Act;
(11) petroleum products loading fee, which fee
shall be considered a tax for the purpose of the Tax
Administration Act;
(12) Alternative Fuel Tax Act;
(13) Cigarette Tax Act;
(14) Estate Tax Act;
(15) Railroad Car Company Tax Act;
(16) Investment Credit Act, rural job tax
credit, Laboratory Partnership with Small Business Tax Credit
Act, Technology Jobs and Research and Development Tax Credit
Act, Film Production Tax Credit Act, Affordable Housing Tax
Credit Act and high-wage jobs tax credit;
(17) Corporate Income and Franchise Tax Act;
(18) Uniform Division of Income for Tax
Purposes Act;
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(19) Multistate Tax Compact;
(20) Tobacco Products Tax Act;
(21) the telecommunications relay service
surcharge imposed by Section 63-9F-11 NMSA 1978, which
surcharge shall be considered a tax for the purposes of the Tax
Administration Act;
(22) the Insurance Premium Tax Act;
(23) the Health Care Quality Surcharge Act;
(24) the Cannabis Tax Act; and
(25) the Health Care Delivery and Access Act;
B. the administration and enforcement of the
following taxes, surtaxes, advanced payments or tax acts as
they now exist or may hereafter be amended:
(1) Resources Excise Tax Act;
(2) Severance Tax Act;
(3) any severance surtax;
(4) Oil and Gas Severance Tax Act;
(5) Oil and Gas Conservation Tax Act;
(6) Oil and Gas Emergency School Tax Act;
(7) Oil and Gas Ad Valorem Production Tax Act;
(8) Natural Gas Processors Tax Act;
(9) Oil and Gas Production Equipment Ad
Valorem Tax Act;
(10) Copper Production Ad Valorem Tax Act;
(11) any advance payment required to be made
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by any act specified in this subsection, which advance payment
shall be considered a tax for the purposes of the Tax
Administration Act;
(12) Enhanced Oil Recovery Act;
(13) Natural Gas and Crude Oil Production
Incentive Act; and
(14) intergovernmental production tax credit
and intergovernmental production equipment tax credit;
C. the administration and enforcement of the
following taxes, surcharges, fees or acts as they now exist or
may hereafter be amended:
(1) Weight Distance Tax Act;
(2) the workers' compensation fee authorized
by Section 52-5-19 NMSA 1978, which fee shall be considered a
tax for purposes of the Tax Administration Act;
(3) Uniform Unclaimed Property Act (1995);
(4) 911 emergency surcharge and the network
and database surcharge, which surcharges shall be considered
taxes for purposes of the Tax Administration Act;
(5) the solid waste assessment fee authorized
by the Solid Waste Act, which fee shall be considered a tax for
purposes of the Tax Administration Act;
(6) the water conservation fee imposed by
Section 74-1-13 NMSA 1978, which fee shall be considered a tax
for the purposes of the Tax Administration Act; [and ]
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(7) the gaming tax imposed pursuant to the
Gaming Control Act; and
(8) the produced water fee; and
D. the administration and enforcement of all other
laws, with respect to which the department is charged with
responsibilities pursuant to the Tax Administration Act, but
only to the extent that the other laws do not conflict with the
Tax Administration Act."
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