NEW MEXICO
LEGISLATIVE STATUS REPORT

			 The following bills that may be of interest to our
members have been introduced in the Second Regular Session of New Mexico's
45th Legislature, which bills will be monitored during the Session, as I
will continue to watch for any other developments that might specifically
affect our industry:

			HB 165-Tribal Capital Improvements Tax Credit:
Introduced by Representative Ben Lujan, Dem., Dist. 46 (Santa Fe). Would
provide that one liable for the oil and gas severance tax, conservation tax
or emergency school tax on production from Indian tribal land will have a
credit each month equal to the lesser of the tax that is exclusively
dedicated to fund capital improvement projects on the tribal land (but not
commercial buildings) imposed on such production by the Indian tribe, or 2%
of the taxable value of such production. The burden of showing entitlement
to this credit would be on the taxpayer, who must furnish proof of payment
of the tribal tax. This bill received a "Do Pass" in the House Energy &
Natural Resources Committee and was sent to the House Taxation & Revenue
Committee, where a hearing will be held on Monday, February 4, at 1:30 PM.

			HB 230-"Indian Country" Defined: Introduced by
Representative Leo C. Watchman, Jr., Dem., Dist. 9 (McKinley & San Juan).
Would broadly define "Indian country" under the New Mexico statutes. This
bill was referred to the House Rules & Order of Business Committee, where a
hearing will be held on Saturday, February 2, at 1:30 PM.

			HB 309-San Juan Oil and Gas Field Training Program:
Introduced by Representative Nick Tinnin, Rep., Dist. 1 (San Juan). Would
appropriate $300,000 to San Juan College for Fiscal Year 2003 and subsequent
years for an oil and gas field training program at the college that includes
certification and training for well, pipeline and drilling technicians and
field workers. This bill was referred to the House Business & Industry and
Appropriations & Finance Committees.

			HB 388-Tax Credit For Produced Water: Introduced by
Representative Robert W. Burpo, Rep., Dist. 23 (Bernalillo). Would provide
that a taxpayer who produces water from a depth of 3,000 feet or more below
the surface in the course of drilling for oil and gas may take an income tax
credit of $1,000 per acre-foot of produced water (not to exceed $400,000 per
year) if the taxpayer discharges the water into the Pecos River in
compliance with the New Mexico Water Quality Act, and subject to other
conditions. This bill was referred to the House Business & Industry and
Taxation & Revenue Committees.

			HB 423-Additional Natural Gas Pipeline Systems
Study: Introduced by Representative Donald L Whitaker, Dem., Dist. 61 (Lea).
This bill is identical to SB 369 and was referred to the House Energy &
Natural Resources and Appropriations & Finance Committees. 

			SB  16-Lea and Carlsbad Conservation District Study:
Introduced by Senator Carroll H. Leavell, Rep., Dist. 41 (Eddy & Lea). Would
appropriate $500,000 to New Mexico State University for Fiscal Year 2003 for
a study by the Lea and Carlsbad Soil and Water Conservation Districts of
issues related to the use of water produced by oil and gas exploration from
"deep underground." This bill was found germane by the Senate Committees'
Committee , received a "Do Pass" in the Senate Conservation Committee, and
was sent to the Senate Finance Committee,  where it was temporarily tabled.

			SB 283-Tribal Capital Improvements Tax Credit:
Introduced by Senator Leonard Tsosie, Dem., Dist 37 (Dona Ana, Otero &
Sierra). This bill is identical to HB 165, was found germane by the Senate
Committees' Committee, and was sent to the Senate Indian & Cultural Affairs,
Conservation and Finance Committees.

			SB 345-Well Workover Projects: Introduced by Senator
Leonard Lee Rawson, Rep., Dist. 37 (Dona Ana, Otero & Sierra). Would amend
the Natural Gas and Crude Oil Production Incentive Act to expand the
definition of "well workover project" to include the installation by the
operator of workover equipment that is intended to substantially increase
the life of the well and that has been approved and certified by the OCD,
which approval shall be granted if the OCD determines that the equipment
will substantially reduce operating costs, thereby increasing the life of
the well and its recoverable reserves. This bill was found germane by the
Senate Committees' Committee and sent to the Senate Conservation and Finance
Committees.

			SB 369-Additional Natural Gas Pipeline Systems
Study: Also introduced by Senator Leavell. Would require the Legislative
Council to assign an Interim Committee to study the economic feasibility and
the costs and benefits of financing, constructing and operating a natural
gas pipeline to transport New Mexico natural gas to additional markets. This
bill was found germane by the Senate Committees' Committee and sent to the
Senate Conservation and Finance Committee. 

			HJM 17-Coordinated Oil & Gas Permitting Process:
Introduced by Representative Patricia A. Lundstrom, Dem., Dist. 5
(McKinley). Would request that the Department of Environment, the Oil
Conservation Division and the federal Bureau of Land Management cooperate in
the development of a coordinated permit process for oil and gas activities.
This bill received a "Do Pass" in the House Energy & Natural Resources
Committee and was sent to the House Business & Industry Committee.

			I will continue to keep you posted concerning any
changes or additional issues.

		 Tom Nance
		February 1, 2002