AN ACT
RELATING TO TAXATION; ENACTING FOR THE
PURPOSES OF ENVIRONMENTAL PRESERVATION, DRILLING TECHNOLOGY, SURFACE USE
REDUCTION AND REVENUE ENHANCEMENT A ONE-TIME TAX CREDIT FOR COMPLETION OF NEW
CRUDE OIL AND NATURAL GAS WELLS; CREATING A FUND; MAKING AN APPROPRIATION.
BE IT ENACTED BY THE LEGISLATURE OF
THE STATE OF NEW MEXICO:
Section 1. A new section of the Oil and Gas Emergency
School Tax Act is enacted to read:
"ONE-TIME TAX CREDIT--FUND
CREATED.--
A.
To encourage preservation of the environment, stimulate drilling
technology, reduce the surface impact of oil or gas wells and enhance state
revenue, the operator of a new crude oil or natural gas well may upon completion
of the well apply for and receive a one-time tax credit.
B.
A well shall qualify for the tax credit provided by this section in the
amount of fifteen thousand dollars ($15,000) if the oil conservation division
of the energy, minerals and natural resources department certifies to the taxation
and revenue department that:
(1)
the operator applying for the tax credit commenced drilling the well
after the effective date of this section of this 2003 act, but not later than
eighteen months after the effective date; and
(2)
the well was completed as a producing well.
C.
A well shall qualify for the tax credit provided by this section in the
amount of thirty thousand dollars ($30,000) if the oil conservation division of
the energy, minerals and natural resources department certifies to the taxation
and revenue department that:
(1)
the operator applying for the tax credit commenced drilling the well
after the effective date of this section of this 2003 act, but not later than
eighteen months after the effective date;
(2)
the well was completed as a producing well; and
(3)
the well:
(a)
is a directionally or horizontally drilled well;
(b)
utilizes technology that enables more than one wellbore to be drilled
from a single well pad; or
(c)
utilizes a single new wellbore to access more than one petroleum
reservoir.
D.
The tax credit shall be disbursed as a refund following certification by
the oil conservation division of the energy, minerals and natural resources
department pursuant to this section and based upon a refund request by the
operator. Requests for refunds shall be
processed by the taxation and revenue department and issued in the form of a
warrant to the operator. The operator
shall allocate the refund allowed pursuant to this section among the working
interest owners and shall remit to each working interest owner its share
thereof.
E.
As used in this section:
(1)
"operator" means the person that is designated as the operator
of the well in the records of the oil conservation division of the energy,
minerals and natural resources department; and
(2)
"well" means a crude oil or natural gas producing well.
F.
The "oil and gas tax credit fund" is created in the state
treasury. The fund shall be administered
by the department. Money in the fund
shall be used to pay for the tax credit provided in this section."
Section 2. APPROPRIATION.--Twelve million dollars
($12,000,000) is appropriated from the operating reserve to carry out the
provisions of this act and shall be transferred to the oil and gas tax credit
fund on the effective date of Section 1 of this act. Any unexpended or unencumbered balance
remaining at the end of the fiscal year in which Section 1 of this act is
repealed shall revert to the general fund.
Section 3. REPEAL.--Section 1 of this act is repealed
effective thirty months after the effective date of that section or when the
total amount of tax credits under this section certified by the oil
conservation division of the energy, minerals and natural resources department
and approved by the taxation and revenue department totals twelve million
dollars ($12,000,000), whichever occurs first.
Section 4. EFFECTIVE DATE.--The effective date of the
provisions of Section 1 of this act is that date when the average monthly value
of either oil or gas, as reported to the taxation and revenue department
pursuant to Subsection D of Section 7-31-2 NMSA 1978, has for four consecutive
months been nineteen dollars ($19.00) or less per barrel of crude oil or two
dollars twenty-five cents ($2.25) or less per thousand cubic feet of natural
gas; provided, however, that in no case shall Section 1 of this act become
effective after June 30, 2008.
HB 661
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