2024 State Legislative Debrief: New Mexico

Mar 12, 2024

By Rachael Hamby

About the session

New Mexico’s state legislature alternates between 60-day sessions in odd years, during which any topics can be considered, and 30-day sessions in even years, during which only bills related to the state budget or topics on the governor’s legislative agenda may be considered. Of 658 bills that were introduced in the 2024 30-day session, 72 bills passed both chambers and 69 were signed into law. An additional 119 memorials and resolutions were introduced, of which 35 passed.

Wins for conservation funding

Land conservation in New Mexico scored a major victory with the appropriation of $300 million to the Conservation Legacy Permanent Fund, often referred to as the Land of Enchantment Legacy Fund. (This appropriation was originally introduced as SB 9 Conservation Legacy Fund, which passed out of the Senate Conservation committee but died in Senate Finance. However, the inclusion of this funding in HB 2, the state budget bill, means that the passage of SB 9 was not necessary to secure the appropriation for the Land of Enchantment Legacy Fund.) SJR 15 Conservation Legacy Fund, which would have enshrined the fund in the state constitution, did not advance out of committee. However, the major investment in the fund via the state budget reflects its popularity in the state and brings New Mexico’s state-level dedicated conservation funding closer to meeting the state’s conservation needs in the future.

In addition to state-level funding, New Mexico also passed bills to help the state access more federal funding. HB 177 New Mexico Match Fund, which passed both chambers and was signed by Governor Michelle Lujan Grisham, creates a new fund that can serve as a source of non-federal dollars that are often required as matching funds to secure federal grants. The bill originally included an appropriation of $100 million, which was removed before the bill’s passage. However, the creation of the fund acknowledges the need for New Mexico to take action to pursue available federal funding instead of leaving funding on the table because the state can’t come up with matching funds required to access federal funding.

SB 169 Land and Water Conservation Fund Changes prioritizes funding requests from Indian nations, Tribes and Pueblos, and from rural communities, for grants to provide non-federal matching funds for LWCF state and local assistance formula grants program and makes minor changes to the grant requirements. The bill originally included appropriation of $10 million, which was removed by the Senate Finance committee. The bill passed both chambers and was signed by Governor Lujan Grisham.

White Sands National Park, National Park Service

Anti-conservation bills fail to advance

In addition to these funding wins, the legislature also successfully shut down attempts to advance now-familiar anti-conservation ideas. SB 172 Forest Conservation Act and Timber would have removed the authority of the Forestry Division (within the Energy, Minerals and Natural Resources Department) to acquire land or interest in land by gift or by purchase. SB 173 Natural Heritage Conservation Act Changes would have removed the ability to use this program’s funds for conservation or agricultural easements, prevented the Energy, Minerals and Natural Resources Department from receiving conservation or agricultural easements by gift, and removed conservation entities (including nonprofits and land trusts) from the list of entities qualified to participate in the Natural Heritage Conservation program. SB 198 Game Commission Land and Water Acquisitions would have required that the State Game Commission obtain approval from the state legislature for any proposed land or water acquisition, as well as the approval of an acequia association, a land grant, and the board of county commissioners where the proposed land or water acquisition is located. Finally, HM 43 State Agency Rules Oversight Committee would have created an interim legislative committee to review rules proposed by state agencies. None of these bills received a hearing in any committee.

A geothermal energy facility in New Mexico, Bureau of Land Management

Wins for clean energy

HB 41 Clean Transportation Fuel Standards creates a clean transportation fuel standard program with a goal of annually decreasing the carbon intensity of transportation fuels used in the state, eventually reducing carbon intensity by at least 20 percent below 2018 levels by 2040 and 30 percent below 2018 levels by 2040. HB 41 passed both chambers and was signed into law, making New Mexico the fourth state in the country to enact these standards.

After a similar bill passed both chambers last session but was pocket vetoed (the term for a bill passed in the last three days of a legislative session but not signed by the governor and which therefore does not become law) by Governor Lujan Grisham, HB 91 Geothermal Resources Project Funds passed both chambers and was signed into law. The law creates a new geothermal project development fund that can make grants for cost/benefit studies of geothermal projects or for financing a geothermal development project. The law also creates the geothermal projects revolving loan fund to provide revolving loans to finance geothermal development projects. The original bill included appropriations of $10 million to the geothermal projects development fund and $15 million to the geothermal projects revolving loan fund; these appropriations were removed as the bill moved through committees, but HB 2, the state budget bill, included $2.5 million for the geothermal projects development fund and $2.5 million for the geothermal projects revolving loan fund. (A companion senate bill, SB 59 Geothermal Project Funding and Management, passed the Senate Conservation committee but did not advance out of Senate Finance.)

A pumpjack in New Mexico, Bureau of Land Management

Attempts at oil and gas reform

Several bills were introduced that would have made important reforms to New Mexico’s oil and gas laws. HB 30 Use of Water in Oil and Gas Operations would have prohibited the use of fresh water for oil and gas development and instead required the use of produced water, as well as required operators to submit annual water reports. HB 31 Oil and Gas Liquid Spills and Protections would have set new penalties for spills, leaks, and other releases of oil, produced water, or other liquid waste from oil and gas production — from $2,000 for less than five barrels, up to $25,000 for more than 25 barrels plus $2,000 for each barrel over 25 — and would have required the Oil Conservation Division to promulgate rules to regulate produced water, recycled produced water, and treated produced water. HB 32 Oil and Gas Children’s Health Protection Zones would have created new “children’s health protection zones” within one mile of the property line of a school; required the production of a protection zone inventory and map including existing oil and gas operations within the new zones; prohibited oil and gas operations within the zones (including phasing out existing operations by the end of 2027) unless the operator received a variance for specific reasons; required leak detection and response plans for operations within the zones; and increased water and air quality requirements within the zones. None of these bills was considered in any committee.

HB 48 Oil and Gas Future Royalty Rate would have increased the royalty rate for oil and gas removed from state lands. The current maximum rate is one fifth of the revenue from oil or gas produced. Had HB 48 passed, the new rate would have been one quarter of the revenue of the oil or gas produced for new leases issued on or after July 1, 2024. The State Land Office estimated that of land that would have been affected by the new royalty rate, only one percent is available for new leasing. Nevertheless, in addition to increasing New Mexico’s royalty rate of 20 percent to match that of neighboring Texas, which shares the Permian Basin with New Mexico, at 25 percent, HB 48 would have increased revenues going into the Land Grand Permanent Fund (from which distributions are made to state trust land beneficiaries, mainly schools) by between $50 million and $84 million. It would have also increased the market value of the fund by $1.5 billion to $2.5 billion, which would have increased the amount of distributions by $750 million to $1.3 billion in cumulative distributions through 2050. HB 48 passed the full House by a vote of 39–28 and was assigned to Senate Finance but did not receive a hearing there. SB 24 Oil and Gas Development Royalty Rates, the companion bill in the senate, passed out of the Senate Conservation committee but did not receive a hearing in Senate Finance.

HB 133 Oil and Gas Act Changes would have made a number of additional important changes to oil and gas regulation. The original version of the bill increased bonding requirements and added setback requirements; subsequent committee amendments removed the setbacks and created tiers for the bonding requirements based on an operator’s number of wells and total oil and gas production annually. The bill would have codified into law the state’s new methane capture regulations which went into effect in 2021 and require that producers capture 98 percent of methane by 2026. The bill also would have increased the maximum daily penalty for civil violations from $2,500 to $10,000, and in cases where risk to public health and safety or the environment exists, from $10,000 to $25,000; the cap on administrative penalties would have increased from $200,000 to $3,650,000. Application fees would have tripled, and the Oil Conservation Division would have been granted the authority to adjust fees annually for inflation beginning in 2027. The OCD would also have been granted the authority to regulate and block the transfer of wells from larger to smaller operators if the risk of abandonment was found to be high, an important measure intended to reduce the number of abandoned wells in the future. Finally, OCD would have been given the authority to permit the conversion and repurposing of oil and gas wells for other uses such as geothermal or energy storage. HB 133 passed out of committee but did not receive a vote on the House floor.

Three related memorials (non-binding measures similar to resolutions in other states) were introduced related to setbacks: HM 58 Oil and Gas Setbacks Study, SM 8 Oil and Gas Facility Setback Study and SM 14 Oil and Gas Facility Setback Study would have requested that the Energy, Minerals and Natural Resources Department convene a working group to study the impacts of oil and gas facilities on human health and the environment and to make recommendations on setbacks. None of these memorials passed out of committee. Finally, HM 42 Methane Emission Task Force would have requested that the Environment Department convene a working group to develop legislative and regulatory recommendations to reduce methane emissions. HM 42 passed out of committee but did not receive a House floor vote.

Tangentially related to oil and gas, SB 215 Geologic Carbon Dioxide Sequestration Act would have allowed geologic sequestration — the storage of carbon dioxide in pore spaces in underground rock formations — in New Mexico and created a regulatory framework housed within the Oil Conservation Division of the Energy, Minerals and Natural Resources Department. Notably, the bill would have codified that pore space in underground rock formations would be owned by the surface owner, not the mineral owner. This bill did not pass out of the Senate Conservation committee.

Bosque del Apache National Wildlife Refuge, markVgti via Flickr/CC BY-NC-ND 2.0

Legislature not sold on governor’s “strategic water supply” proposal

One of Governor Michelle Lujan Grisham’s marquee initiatives was a proposed “strategic water supply” which would have used state funding to create a reserve of fracking wastewater. Announced last December, the original plan called for the state to invest $500 million from the Severance Tax Permanent Fund to finance acquisitions of treated wastewater that could then be available to businesses and industries that can use brackish water. By creating a reserve of treated wastewater, the proposal aimed to reduce pressure on freshwater sources while attracting water-reliant industries (for example, hydrogen production) to the state. After this proposal was removed from a capital outlay spending package earlier in the session, the proposal was introduced as SB 294 Strategic Water Supply Program which proposed $100 million (down from the original $500 million) for the program. The Senate Conservation committee passed a committee substitute of the bill, but it died in Senate Finance.

Other water-related proposals included:

  • HB 301 Future Water Trust Fund would have created a fund to purchase water rights from outside the state and to study, advocate for, and fund projects that deliver water to NM from outside the state. This bill passed out of committee but did not receive a vote on the House floor. (HB 2, the state budget bill, did contain an appropriation of $50 million to a different Water Trust Fund which finances water infrastructure projects around the state.)
  • SB 111 Protect State Waters would have appropriated funds to the Environment Department for additional monitoring and enforcement of existing regulations and to conduct mapping to study the impact of changes to the federal Clean Water Act on waters in the state. This bill passed out of the Senate Conservation committee but died in Senate Finance.
  • HB 291 Allow Water Reuse Requirements would have allowed local governments to require water harvesting and storage or water recycling and reuse, and would have allowed an income tax credit for water harvesting (for example, rain barrels). The bill did not advance out of committee.
  • HB 130 Cloud Seeding Pilot Program would have created a three-year cloud seeding weather modification pilot project in the Agriculture Department. The bill originally included an appropriation of $1,980,000, which was stripped by House Appropriations and Finance. The bill passed the House as well as Senate Conservation, but did not receive a vote on the Senate floor. However, HB 2, the state budget bill, contained an appropriation of $1.5 million for this program.

Valles Caldera National Preserve, Larry Lamsa via Flickr/CC BY 2.0

Attempts at State Game Commission reform

Three bills were introduced which would have made changes to the structure of the State Game Commission. HB 23 State Game Commission Changes, HB 147 Reform State Game Commission, and HB 178 Reform State Game Commission all would have changed the appointment process for commission members; changed the composition so that members must meet professional or expertise criteria, rather than coming from geographical districts; set term limits; and disallowed removal of commissioners without cause. HB 178, the bill that advanced the furthest during the session, included a legislative declaration of state policy “to provide for the conservation and management of the state’s wildlife as a public trust resource with intrinsic and ecological value, as well as for the benefit, use, food supply and nonconsumptive enjoyment of all,” changed the name of the State Game Commission to the State Wildlife Commission, and changed the name of the Game and Fish department to the Wildlife department. HB 178 also would have created a committee to nominate candidates for the commission from whom the governor could choose. Finally, HB 178 would have granted the commission the authority to adjust hunting and fishing license fees for inflation, as opposed to fixed fees being set by statute. HB 178 passed out of the House Energy, Environment and Natural Resources committee, but died in House Judiciary. A similar bill passed both chambers last session but was pocket vetoed by Governor Lujan Grisham.

Organ Mountains-Desert Peaks National Monument, BLM New Mexico

Many funds, tax credits, and programs were proposed; few passed

A few bills were introduced that sought to create and fund new climate-related programs:

  • HB 9 Climate, Energy & Water Division would have created a division in the Economic Development Department to identify and help streamline climate, energy and water projects, establish a “decarbonization technology program,” and administer a climate, energy and water project fund
  • HB 104 Statewide Public Health and Climate Program, which passed out of the House Health and Human Services committee but died in House Appropriations and Finance, would have created a program to assist communities in preparing for public health emergencies related to climate change and extreme weather events.
  • HB 237 Climate, Energy and Water Authority Act would have created a climate, energy and water authority to serve as “project permitting navigators” for climate, energy and water projects; identify site-ready and brownfield locations for projects; provide recommendations for streamlining of permitting for projects; and serve as a hub for coordination, engagement, information, planning, recommendations. The authority would have been required to establish a decarbonization technology program to recruit climate, energy, and water technology companies and pilot or demonstration projects to the state. Finally, the bill would have established a fund and appropriated $10 million to it to provide state matching funds for federal grants, pilot projects, and studies and research. This bill did not advance out of committee.
  • HB 259 State Investment in Climate Technology, which did advance out of committee, would have required that at least two percent of the market value of the severance tax permanent fund be invested in climate technology private equity funds. The severance tax permanent fund saves and invests revenues from the state severance tax — paid by oil and gas producers when they extract, or “sever,” oil and gas from the ground — that are not being used for bonding of capital projects.

The session saw a number of proposals related to clean energy:

  • HB 73 Energy Storage System Income Tax Credit, which passed out of the House Energy, Environment and Natural Resources committee but died in House Taxation and Revenue, would have provided for an income tax credit for purchasing and installing an energy storage system on residential, commercial, industrial or agricultural property.
  • HB 143 Energy Storage Facility IRB Eligibility and its companion SB 232 Energy Storage Industrial Revenue Bonds would have made energy storage facilities eligible for industrial revenue bond projects. Neither bill advanced out of committee.
  • HB 274 Advanced Energy Equipment Income Tax Credit, which passed out of the House Energy, Environment and Natural Resources committee but died in House Taxation and Revenue, would have allowed a tax credit for someone who makes qualified expenditures for a qualified manufacturing facility that will produce advanced energy products that would be eligible for the tax credit in Section 45X of the Inflation Reduction Act for the domestic manufacture of components for certain renewable energy and battery technologies.
  • HB 108 Local Solar Access Fund, which passed the House Energy, Environment and Natural Resources committee but died in House Appropriations and Finance, would have created a fund that could make grants to eligible entities for planning, design, construction, purchase, and installation of solar energy systems to power buildings, or for technical assistance to apply for federal or other funding for the same purposes, and would have appropriated $110 million for the fund.
  • HB 189 Low-income Solar Act and SB 2 Low-income Solar Act, neither of which received a committee hearing, would have made changes to ensure equitable distribution of the benefits of solar energy generated on affordable housing.
  • HB 187 School Solar Tax Credit, which passed the House Energy, Environment and Natural Resources committee but died in House Taxation and Revenue, would have created a personal income tax credit for anyone who installs a solar system on a school.
  • HB 150 Renewable Energy Production Tax Act, a bill unfriendly to renewable energy, would have imposed a renewable energy production tax of 3.75 percent of the wholesale value of electricity produced from wind, solar, hydro, geothermal, or biomass — equivalent to the oil and gas severance tax. (Residential and small-scale facilities and facilities owned by the state government or a Tribe would have been exempt.) This bill did not advance out of committee.
  • HB 92 Geothermal Electricity Generation Tax Credits and the companion bill SB 58 Geothermal Electricity Tax Credit would have created tax credits and deductions for geothermal electricity generation and for facility construction costs. HB 92 passed the House Energy Environment and Natural Resources committee but did not receive a hearing in House Taxation and Revenue; SB 58 did not receive a hearing in the Senate Tax, Business and Transportation committee.
  • SB 40 Geothermal Heat Pump Tax would have reinstated and expanded a tax credit that expired in 2020 for installing geothermal ground-coupled heat pumps; this bill died in the Senate Tax, Business and Transportation committee.

A handful of bills addressed electric and hybrid vehicles:

  • HB 140 Clean Car Income Tax Credit would have created personal and corporate income tax credit for the purchase of both electric vehicles (under $55K MSRP for new or under $25K for used vehicles) and EV charging units. The bill passed out of the House Energy and Natural Resources committee but did not receive a hearing in House Taxation and Revenue. A similar bill, SB 8 Electric Vehicle Tax Credit, would have created a new state income tax credit for the purchase or lease of an electric vehicle.
  • SB 134 Study Electric Vehicle Development would have appropriated funds to the Transportation Department to study electric vehicle development, including installing charging stations at highway rest areas. The bill did not receive a hearing in the Senate Tax, Business and Transportation committee.
  • SB 183 Electric and Hybrid Vehicle Registration Fees would have added an additional registration fee for electric and hybrid vehicles to fund state roads and transportation projects. Both SB 8 and SB 183 were assigned to the Senate Tax, Business and Transportation committee but did not receive hearings.
  • Meanwhile, SM 2 Repeal Electric Vehicle Mandate, a non-binding memorial which would have requested that the Environmental Improvement Board repeal its electric vehicle mandate and conduct a study of the potential damage of electric vehicle use to the economy, did not advance out of committee.

SB 228 Use of Environment Fees and Funding would have given the Environment Department more flexibility to use fees from one program to cover costs in another program and, in the case of three programs, would have authorized the department to set fees to cover costs and department operating expenses rather than having specific fees set in statute. This bill passed out of the Senate Conservation committee but died in Senate Finance.

Bisti/De-na-zin Wilderness, BLM New Mexico

Other bills of note related to…

…outdoor recreation:

  • HB 56 Clarify Crime of Trespass, which did not advance out of committee, would have updated trespass to be a fourth-degree felony (from misdemeanor) and increased the minimum jail sentence to 18 months (from one year).
  • HB 138 Off-highway Motor Vehicle Definitions and its companion SB 191 Off-highway Vehicle Definitions would have amended the definition of “recreational off-highway vehicle,” including doubling the unladen dry weight from 1750 to 3500 pounds. The changes would have allowed more and heavier vehicles to meet the definition. Neither bill received a hearing in any committee.
  • SB 160 Rio Grande State Park Restoration would have appropriated $20 million for restoration work at Rio Grande State Park near Albuquerque. The bill passed the Senate Conservation committee but died in Senate Finance.
  • HM 34 Citizen Science in State Agencies requests that the State Parks Division participate in a working group on expanding the use of citizen science based on the Wild Friends program at the University of New Mexico School of Law. This non-binding memorial passed the full House and does not require the governor’s signature. The companion SM 1 Citizen Science in State Agencies Task Force died in the Senate Health and Public Affairs committee.

…wildlife and livestock:

  • HB 164 Livestock Wolf Compensation Program and the companion SB 26 Existing Livestock Compensation would have appropriated $5 million (HB 164) or $9 million (SB 26) to the existing livestock Mexican wolf compensation program. Neither bill passed, but $1.5 million in funding for the program was included as a line item in HB 2, the state budget bill.
  • HB 173 Rangeland Pest Mitigation Program, which passed out of committee but did not receive a House floor vote, would have appropriated $500,000 to NMSU to administer a rangeland pest mitigation program. According to the fiscal note, this would have helped address outbreaks of caterpillars and grasshoppers on federal, state and private rangelands. This appropriation was not included as a line item in HB 2, the state budget bill.
  • HB 68 DOT Cattle Guard Clearing on Tribal Lands, which passed out of the House Government, Elections and Indian Affairs committee but died in House Appropriations and Finance, would have appropriated $5 million to the Transportation department to clear cattle guards on Tribal and Pueblo lands. This appropriation was not included as a line item in HB 2, the state budget bill.
  • HB 59 Raising Quail Without a Permit, which did not advance out of committee, would have removed “domestic strains of quail” from what the state considers to be game species, and would have allowed for raising quail without a permit. This would be hard to enforce and could harm native quail if domestic quail were to compete with native quail for resources.
  • HM 33 Pollinator Protection Plan Work Group requests that the Agriculture department convene a working group to develop a pollinator protection plan that includes best practices for farmers, land stewards, pesticide applicators, and beekeepers. This non-binding memorial passed the House and does not require the governor’s signature.

Last but not least…

HJR 4 Environmental Rights and SJR 8 Environmental Rights would have proposed a constitutional amendment to guarantee clean and healthy air, water, soil, and environment, a stable climate, and self-sustaining ecosystems, and charged the state with protecting these rights and conserving, protecting, and maintaining natural resources for present and future generations. Neither bill advanced out of committee.

Gila Wilderness, U.S. Forest Service

Takeaways and looking to next year

As is perennially the case in New Mexico, many bills are introduced but few succeed. With such short legislative sessions and an all-volunteer legislature (the only such state legislature in the nation), the majority of bills die in committee simply because they run out of time. This is most acutely the case in the Senate Finance committee and the House Appropriations and Finance committee, which create bottlenecks for huge numbers of bills especially during a budget-only session.

A number of proposed constitutional amendments — HJR 1 Session Length, Subjects and Overrides, HJR 5 Legislative Session Changes, HJR 9 Legislative Session Changes, SJR 3 Session Length, Subjects and Overrides, SJR 4 Legislative Session Changes — would have made changes to the structure of New Mexico’s legislative sessions, such as lengthening short sessions to 45 days or making sessions 45 days every year instead of alternating between 30-day and 60-day sessions, and removing the requirement that short sessions (held in even-numbered years) be restricted to topics germane to the state budget. These bills also proposed a process for the legislature to override the governor’s veto of a bill. HJR 2 Eliminate Pocket Vetoes proposed that anything passed in the last three days of the session (the majority of bills that pass in New Mexico) and not acted on by the governor within 20 days after adjournment becomes law. (Under current law, a bill that is passed within the last three days of the session but not signed by the governor does not become law, an outcome known as a “pocket veto.”) None of these session-reform bills passed.

With longer sessions and the freedom from being restricted to budget topics every other year, the state legislature could turn more of its pro-conservation proposals into reality for New Mexico. Until then, New Mexicans can expect to see many of these bills introduced again in future sessions and hope some of them beat the clock in order to achieve conservation and energy policy improvements for New Mexico communities and landscapes.

Feature image: Rio Grande del Norte National Monument, U.S. Fish & Wildlife Service