for State’s Mineral Resources
Legislation would bring oil and gas royalty rates to market value, providing millions more for public schools, universities, and hospitals
Santa Fe, N.M. - House Bill 48, which would bring New Mexico’s oil and gas royalty rates in line with current market values, passed the House of Representatives today by a vote of 39-28.
House Bill 48 would apply to lease rates for new oil and gas tracts purchased from the State Land Office, so that these rates are in line with the fair market value for New Mexico’s mineral rights. This rate change would also supply additional funding for critical public services that are made through the Land Grant Permanent Fund.
“We're currently charging below market rates on mineral interests that we hold in trust for the beneficiaries of the Land Grant Permanent Fund,” said lead sponsor Rep. Matthew McQueen (D-Galisteo). “By simply raising the royalty rate to market value, we can increase payments to our schools, hospitals, and universities by hundreds of millions of dollars.”
The proposal would raise an estimated $50 million a year, and over $1 billion in total. Royalty rate increases under House Bill 48 would begin in July 2024. Rate increases would only apply to new oil and gas leases on certain prime pieces of land.
The bill is also sponsored by Senator Bill Tallman (D-Albuquerque). It now heads to the Senate.
The Roundhouse is open to the public for the 2024 session. Members of the public can also view floor sessions and committee meetings on the New Mexico Legislature’s Webcasts tab, and provide comment via phone or Zoom as directed on the daily schedule.