MOD
HB 285
TAX RATE DIFFERENTIAL FOR CERTAIN OIL
- Legislative URL:
- HB 285 on nmlegis.gov
- Emergency Clause:
- No
- Germane:
- N/A
- Location:
- SFC
- Action:
- [4] HEENC/HWMC-HEENC [7] w/o rec-HWMC [10] DP/a [11] fl/aa- PASSED/H (59-7) [15] SCORC/SFC-SCORC [17] DP/a-SFC
- Issue(s):
- Energy
Companion Bills
Related Legislators
- Bill Sponsor:
- Nate Gentry
Related Documents
- Downloads:
-
Introduced
HEENC Committee Report
HWMC Committee Report
House Floor Amendment 1
House Floor Amendment 2
Final House Vote
SCORC Committee Report
Fiscal Impact Report
Summary
This bill extends a 50 percent reduction in the severance tax (from 3.75% to 1.875%) to oil and other liquid hydrocarbons removed from natural gas at or near the wellhead produced from a qualified enhanced recovery project that involves the application of “anthropogenic” carbon dioxide (i.e. carbon dioxide that is produced by human activities such as oil refining), if the relevant price of West Texas intermediate crude oil is between $28 and $60 per barrel.
The same severance tax break is currently available (regardless of application of carbon dioxide) if the relevant price of west Texas intermediate crude oil is less than $28 per barrel.
A potential effect of this bill is that it may encourage additional production of oil from existing wells using carbon dioxide. A potential benefit is the resulting geologic sequestration of carbon dioxide.
On February 8 the House Ways and Means Committee amended HB 285. The amendment adds a definition of “anthropogenic carbon dioxide” as “that portion of carbon dioxide in the atmosphere that is produced directly by human activities, including the burning of fossil fuels.”
The HWMC amendment also replaces “application” with “injection” (of anthropogenic carbon dioxide) and changes the reduced severance tax to: (a) two and three-fourths percent if 25-50 percent of the total amount of carbon dioxide injected during the taxable period consists of anthropogenic carbon dioxide; and (b) one and three-fourths percent if more than 50 percent of the total amount of carbon dioxide injected during the taxable period consists of anthropogenic carbon dioxide.
A potential effect of this bill, as amended, is that it may encourage additional production of oil from existing wells using higher amounts of anthropogenic carbon dioxide. A potential benefit is the resulting geologic sequestration of anthropogenic carbon dioxide.
On February 10, HB 285 was twice amended on the House Floor. The House amendments make the tax break temporary, beginning July 1, 2016 and ending July 1, 2026. And they redefine “anthropogenic carbon dioxide” as “that portion of carbon dioxide in the atmosphere that is found in the atmosphere as a direct result of human activities, including the burning of hydrocarbons.”
A potential effect of this bill, as amended, is that it may over a 10-year period encourage additional production of oil from existing wells using higher amounts of anthropogenic carbon dioxide. A potential benefit is the resulting geologic sequestration of anthropogenic carbon dioxide.
On February 14 the Senate Corporations and Transportation Committee amended HB 285 to once more change the definition of “anthropogenic carbon dioxide,” this time to “carbon dioxide captured from an industrial source, which would otherwise be released into the atmosphere as industrial emission of greenhouse gas.” The new definition is the same as in SB 34 as also amended by SCORC.
A potential effect of this bill, as amended, is that it may over a 10-year period encourage additional production of oil from existing wells using higher amounts of anthropogenic carbon dioxide. A potential benefit is the resulting geologic sequestration of anthropogenic carbon dioxide.