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F I S C A L I M P A C T R E P O R T

SPONSOR Jennings

DATE TYPED 03/03/05 HB

SHORT TITLE Natural Gas Gathering Services Study

SB SJM 55

ANALYST Padilla-Jackson

REVENUE

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY05

FY06

NFI

NFI

(Parenthesis ( ) Indicate Revenue Decreases)

Duplicate to House Joint Memorial 58

SOURCES OF INFORMATION

LFC Files

Responses Received From

Energy, Minerals, & Natural Resources Department (EMNRD)

SUMMARY

Synopsis of Bill

Senate Joint Memorial 55 would direct the Revenue Stabilization and Tax Policy Committee to

examine the regulation of natural gas gathering in the state of New Mexico and determine

whether regulatory authority should be granted to the Oil Conservation Division (OCD) of the

Energy, Minerals & Natural Re-sources Department to investigate complaints from natural gas

producers of unfair, inequitable, or discriminatory practices by natural gas gatherers. Addition-

ally, the study would examine whether the OCD should be authorized to require that natural gas

gathering services be provided on terms and conditions that are fair, equitable and nondiscrimi-

natory.

Significant Issues

EMNRD notes that, at present, the OCD regulates gas gathering systems for the prevention of

waste of natural gas and regulates disposition of waste from such facilities, but does not currently

regulate rates and terms of service to customers.

Senate Joint Memorial 55 -- Page 2

PERFORMANCE IMPLICATIONS

EMNRD notes that the study would not have performance implications, though if the OCD

would be required to regulate natural gas gathering systems it would likely require additional

staff and funding.

FISCAL IMPLICATIONS

Given that the Revenue Stabilization and Tax Policy Committee has already been appropriated

funding for the interim, the provisions of this memorial would unlikely have a fiscal impact. The

related presentations over the interim would likely be made by the Oil Conservation Division and

outside groups.

TECHNICAL ISSUES

The memorial does not address how the findings of such an exercise would be communicated to

New Mexico state policy makers.

OPJ/lg