ANTI-OIL AND GAS BILL GETS DERAILED
IN HOUSE ENERGY COMMITTEE (YAY!)
We’ve observed that every time one turns around in this Roundhouse, you find a bill that targets oil and gas. But today, one of those bills was voted down in the House Energy, Environment and Natural Resources Committee. House Bill 481, the Oil and Gas Well Plugging and Abandonment Responsibility, was sponsored and presented this morning by the committee’s chairman, Rep. Matthew McQueen (Sandoval & Santa Fe).
After a lengthy discussion with major concerns expressed by several committee members, the panel tabled the bill on a 6-3 vote. Democrat Reps. Nathan Small (D-Doña Ana) and Meredith Dixon (D-Bernalillo) joined with Republicans to stop this bill in its tracks.
So let’s talk about what this bill hoped to do. Imagine that your business owns a truck. You use it for a few years. It’s a good truck, and it serves you well. At one point, you sell the truck to somebody and move on with new equipment. Years later, the new owner of that truck gets into a serious accident. Imagine government employees knocking on your door to let you know that you are liable for that accident. “But, I had nothing to do with that,” you might say. “I sold that truck years ago.”
That’s the approach HB 481 would take with owners and former owners of oil wells in New Mexico. When it comes time to cap a well and clean up after a well’s useful life, it’s the responsibility of the current owner. If that owner doesn’t comply or is bankrupt or otherwise unable to pay, there is a state remediation fund that the industry funds through a tax levied on them. HB 481 foresaw a system where oil regulators could collect fees from PAST owners of these oil wells. Keep in mind, that well may have gone through several owners. HB 481 contemplated giving state government the ability to collect or sue each of the past owners.
Rep. Mark Murphy (R-Chaves) is in the industry himself. He started his questioning by taking a point of personal privilege and calling out several of the environment groups that provided public testimony on the bill.
“I recognize that everybody is entitled to their own opinion, right? But we’re not entitled to making up facts. It was said twice that New Mexico pays for industry’s messes,” Murphy said. “Listen to the reclamation bill discussion… the industry pays for this. …if people stand up in this chamber and call my industry looters and polluters, I’m going to take a point of personal order and call them out on that, chairman, because it’s offensive, and I’ve had enough.”
The Chamber was represented by Enrique C. Knell, who opposed the bill and said:
“The oil and gas industry is contributing nearly half of general fund revenues. We are concerned that this bill will have a negative impact by decreasing economic activity with fewer jobs and lower tax revenues for the state. We’re also concerned that retroactive liability places an unfair burden on past owners, some who may have sold their interests years ago. And from an economic development standpoint, the bill will have a chilling effect on investor activity in New Mexico’s oil and gas sector, as investors will fear future liabilities for properties they no longer own or control.”
McQueen made the case that the remediation fund is like uninsured motorist insurance. Basically, we pay more for our insurance to compensate for irresponsible drivers. “So this bill is good for responsible operators, because eventually it will lower their costs. It will lower the rate that we charge for that ‘uninsured motorist insurance’. And that’s good for the industry,” he said.
Murphy quickly shot back:
“I’ve gotta go against your logic there a little bit. And the reason being is that we’ve never, ever seen a tax be reduced or come off this industry. … I would challenge you to ever show me where a tax on the oil and gas industry has actually gone down.”
McQueen responded, ‘Rep. Murphy, that is a valid point. I appreciate that.”
Murphy wrapped up his questioning with a thought shared by several of the committee’s members, “I feel like that this (bill) has taken a sledgehammer to a pretty minor problem.”
Several other members asked pointed questions as well, and that all led to a bipartisan vote to stop this bill in its tracks.
BUSTING ORGANIZED CRIME MEANS
EXPANDING NM’S RACKETEERING STATUTE
Senate Bill 70, sponsored by Sen. Craig Brandt (R-Sandoval), received a “do-pass” recommendation from the Senate Judiciary Committee today. The bill goes next to the Senate Finance Committee.
The Chamber strongly supports this legislation, as J.D. Bullington explained in his testimony:
“SB 70 is aimed at dealing with heinous crimes committed by organized groups. These criminal enterprises need to be stopped in their tracks. That’s why the Chamber supports SB 70, which would expand the state’s Racketeering Act to include such heinous crimes as sexual exploitation of children, threats to our law enforcement officers and threats to some of our communities’ most vulnerable with human trafficking.
“The bill would also target the leaders of such enterprises, specifically making it a crime to solicit or coerce another person, including a minor, into being a member of or working with their criminal enterprise, as well as financing or supervising racketeering activity. SB 70 offers those in our legal system a better tool by casting a wider net over criminal gangs.”
Bullington added that “we know that human trafficking is a growing problem, largely because organized crime is involved – preying on women and children. Racketeering statutes are designed to go after just these kinds of organizations, but New Mexico’s statute does not now encompass so many heinous crimes. That’s why we need SB 70 to pass.”
A representative from the New Mexico Department of Public Safety also spoke in support. There was no opposition.
The bill was amended to remove some less-horrible crimes or crimes that are likely covered by other laws – for example, breaking out of prison or jail. The amendments were acceptable to Brandt, who’s been working on the legislation for quite some time. This really is an important tool to give law enforcement and prosecutors, and it deserves to hit the governor’s desk.
SENATE FINANCE APPROVES BIOSCIENCE
INVESTMENT, SENDS IT ON TO SENATE FLOOR
The Senate Finance Committee today took up Senate Bill 119, Investment in BioScience Companies, sponsored by Sens. George Muñoz (D-Cibola, McKinley & San Juan) and Martin Hickey (D-Bernalillo).
SB 119 increases investment capital available for New Mexico-based bioscience and biotech firms by adding the Bioscience Authority to the current group of existing funds and investors assessing and making investments in N.M. companies. This industry is fast-growing and has enormous economic impact. New Mexico has 7,600 people employed in the bioscience industry with an average salary of $75,000. Geographically, 30 of New Mexico’s 33 counties have at least one bioscience company, with 341 of them in Bernalillo County.
J.D. Bullington represented the Chamber and said, “We want to ensure that New Mexico gains a larger share of this very lucrative industry with good, high-paying jobs. The bioscience industry is responsible for major medical advancements and technology, everything from modern lab equipment to new, highly effective medications and cures for a range of diseases.”
While the state has other investment and venture capital funds, none are dedicated solely to attracting and growing bioscience investments. This sector is highly competitive and requires dedicated attention.
We need to get into this game in a much bigger way, and SB 119 is a good start. The bill passed Senate Finance on an 8-2 vote and has been through two committees now (Senate Judiciary was first). It heads to the Senate floor next.
BIPARTISAN PLAN WOULD SET UP A MEDICAID PIGGY BANK, HELP ATTRACT DOCTORS
About 50% of New Mexicans rely on Medicaid to receive health care services. The problem? Doctors lose money by providing treatment to Medicaid patients, despite the Legislature’s efforts to bolster reimbursement rates. It’s a key reason doctors choose not to practice here. Enter Senate Bill 88, sponsored by a bipartisan all-star line-up of senators: George Muñoz (Senate Finance Chair); Bill Sharer (Senate Minority Leader); Liz Stefanics (Chair, Senate Conservation Committee) and Pat Woods (Senate Minority Whip). The main purpose of the bill is to build a trust or permanent fund (as has been done to meet other financial needs). The fund will ensure that despite potential federal budget reductions or volatile economic times, Medicaid spending can be sustained in order to keep doctors and other health care professions in our state. The Senate Finance Committee sent the bill to the Senate floor on an 11-0 vote.
The Chamber stood in support of this measure, with J.D. Bullington providing this testimony:
“This bill does a lot of things, which are all aimed at ensuring the state can sustain the Medicaid program whether there are reductions in federal matches or through expanded usage or levels of care. As we know, the costs of Medicaid have grown exponentially to the point where it places the second-largest demand on the general fund, just below public education. In brief, the bill:
- Creates a new Medicaid trust fund, which would be seeded with a $300 million appropriation from the general fund.
- Receives revenues from state agency reversions, unexpended/unencumbered balances from prior year general appropriation acts, and interest earnings on state treasury balances, until the fund reaches $2 billion.
- Receives all reversions from capital outlay appropriations made between 2021 and 2024.
- Distributes money annually to gain federal matching funds after the trust fund reaches $500 million.
“This bill addresses what is likely to be a critical need, and we ask for a favorable vote.”
The bill also contains a “trigger” that allows the Legislature to appropriate money in the case of significant funding reductions in the future.
According to Fred Nathan, executive director of Think New Mexico (a prime mover behind the bill), “the trust fund will generate $100 million a year for the state’s share of the Medicaid program. Every one of those state dollars is matched by $3 in federal funding, meaning that this fund will ultimately generate $400 million annually, making it an extremely valuable long-term return on investment for all New Mexicans!” Nathan pointed out that we’re the only state to have lost doctors, while thousands of newly trained doctors are choosing to practice elsewhere.
Dr. Michael Richards with UNM Health Sciences made this poignant statement, “Where we go with Medicaid is where we will go with health care in New Mexico.” Richards points out that Medicaid funding supports training for medical students, and New Mexico will soon have the largest training program in the nation. However, these soon-to-be doctors won’t be attracted to stay here unless barriers are removed.
Annie Jung, executive director of the New Mexico Medical Society, added that “the stability of long-term funding is crucial to accessing care. Removing barriers means an enhanced ability to recruit and retain doctors. The benefits all roll downhill, ultimately to patients.”
Other key barriers to be addressed include removing GRT on medical bills and addressing the really out of whack, high levels of medical malpractice insurance rates. There are other bills in process to address these issues. Quality health care is not only deserved by all New Mexicans, but it’s also vital to making our state economically competitive. It’s a big part of quality of life – no one wants to move to a place where they can’t get a doctor’s appointment. We’ll keep you informed of the progress of all these bills.
SCHOOL CELL PHONE BAN DEBATED,
AND PASSED, ON THE SENATE FLOOR
Senate Bill 11, Anti-Distraction Policy in Schools, hit the Senate floor Saturday evening and saw a healthy discussion about trying to minimize the distraction that cell phones have become in New Mexico’s classrooms.
We’ve told you before about two separate bills that address those pesky and ubiquitous cell phones and efforts to address school policies on a statewide level. Both Sens. Crystal Brantley (R-Catron, Doña Ana, Grant, Hidalgo, Luna, Sierra & Socorro) and Antonio “Moe” Maestas (D-Bernalillo) had similar bills with the same goal. They teamed up and presented a unified bill to the Senate today.
Several senators, including William Soules (D-Doña Ana), Shannon Pinto (D-McKinley & San Juan), President Pro Tempore Mimi Stewart (D-Bernalillo), Antoinette Sedillo Lopez (D-Bernalillo) and Nicole Tobiassen (R-Bernalillo), expressed concerns about not giving local school districts flexibility in their “distracted learning” policies. Pinto and Tobiassen also expressed concerns about the lack of training for school board members, school administrators and students while saddling them with new requirements.
Sen. George Muñoz (D-Cibola, McKinley & San Juan) was worried about students not having access to their phones in case of an emergency, especially a catastrophic schoolwide emergency like an active shooter. He pointed out that many times, in those instances, it’s students who are calling 911 and giving law enforcement critical information, like where the suspect is moving within school buildings.
Brantley and Maestas went back and forth fielding questions and answering concerns, including the fact that most school districts probably have cell phone policies already.
Maestas said, “We’ve had 15 years of struggling with these issues. We want to find out best practices so that our kids are listening to instruction and not being distracted.”
Brantley said this bill will help with mental health issues and is a part of efforts to improve academic performance.
Stewart said there was a “one-word problem with this bill” and one of her fellow educator senators was coming with an amendment to fix it.
Soules presented his amendment, which, in amendment parlance: On page 2 line 2 replaced the word “shall” with “may”. He said that one-word change would preserve local control. The bill would still require schools to adopt a local policy but give them flexibility on what that policy is.
After Brantley deemed the amendment “friendly,” meaning she agreed with it and didn’t object, the amendment was passed.
Sen. Michael Padilla (D-Bernalillo) made a point that probably resonates with many business owners:
“I support this bill,” he said. “It’s going to extend into our work areas. And I will tell you, I really wish I could have policies like this where I could tell my people in my business, turn those things off for the period of time that you’re working. It would reduce liability, it would improve quality of service, any number of things. And so the reason I support it is because it’s going to start to condition our children when they go out into the world that this is what you do when you’re in a setting where you don’t need to be having your cell phone glued to your ear or your face.”
And with that, the bill passed 29-8 and now crosses over to the other side: the House.
You read this story on your cell phone, didn’t you? Don’t worry, we won’t tell. But we WILL let you know what happens on this bill next.
AROUND THE ROUNDHOUSE
Let’s Make a Deal!
For many of us, it’s a decades-old game show. For others, it carries a slightly negative connotation. Yet, “deals” are made every day – bargaining to purchase a car is perhaps one of the bigger deals we make. Businesses make deals every day. For a deal to be a good deal, all parties to the transaction have to benefit. Bad deals are when one or more of the folks is disadvantaged.
And so it is in the Legislature. Deals are often made. Take the budget bill, for example: The House comes up with its version, and the Senate has things it wants. Bargains, deals, whatever you want to call them, happen. It’s good, old-fashioned horse-trading until agreement is achieved. Sometimes a governor, any governor, might threaten to veto some piece of legislation unless another piece of legislation gets to the governor’s desk. Much of this bargaining goes on behind closed doors, and people guard the details closely.
As the old adage goes, “If you love the law and sausage, you should watch neither being made.” It’s true, and it’s been going on since our nation was founded. The U.S. Constitution is a “deal” made to accommodate the different wants and needs of diverse regions. Without the “deal,” all the states would not have voted for the Constitution, and we wouldn’t have the nation we have today, even though some of the deals weren’t particularly good and had to be unwound over time.
So, next time you hear a “deal was cut,” put that information in context. Did it advance the public interest? Is it good public policy? Did all the competing interests come away with something they wanted? In other words, was it a good deal? So, do you want what’s behind curtain number one, number two or number three?
SIGNING OFF FROM SANTA FE
Today actually turned out to be kind of a big deal. First, a totally punitive and, may we say, ridiculous anti-oil and gas bill was shot down in committee. Finally, someone said, enough is enough. Next, two very significant bills moved forward, the racketeering and Medicaid Trust fund measures. Not bad for a Saturday. Only the Senate Health and Public Affairs Committee is meeting tomorrow. Action will resume in full swing Monday, which is when we’ll be back with the next Legislative RoundUp. Today is national domestic pig day and national “dadgum that’s good” day (meaning good food), which, of course, brings us back to pigs and bacon. We hope the rest of your weekend is dadgum good, and we’ll see you Monday.
