SENATE BILL 530
50th legislature - STATE OF NEW MEXICO - first session, 2011
INTRODUCED BY
George K. Munoz
AN ACT
RELATING TO OIL AND GAS DRILLING; AMENDING SECTIONS OF THE SURFACE OWNERS PROTECTION ACT; PROVIDING FOR PROPERTY TAX OBLIGATIONS FOR PROPERTY THAT THE SURFACE LANDOWNER CANNOT USE DURING THE PERIOD OF DRILLING OPERATIONS; PROVIDING FOR DAMAGES FOR DEPRIVING A SURFACE OWNER FROM ACCESS TO PROPERTY UNAFFECTED BY DRILLING OPERATIONS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 70-12-4 NMSA 1978 (being Laws 2007, Chapter 5, Section 4) is amended to read:
"70-12-4. COMPENSATION FOR OIL AND GAS OPERATIONS.--
A. An operator shall compensate the surface owner for damages sustained by the surface owner, as applicable, for loss of agricultural production and income, lost land value, lost use of and lost access to the surface owner's land and lost value of improvements caused by oil and gas operations, including annual property taxes for that portion of the property and time period for which use the surface owner is deprived by the oil and gas operations. The payments contemplated by this section only cover land affected by oil and gas operations, except that the operator shall also compensate a surface owner twenty thousand dollars ($20,000) per day for each day that the surface owner is deprived of access to the surface owner's property that is not affected by the oil and gas operations.
B. An operator shall not be responsible for allocating compensation between the surface owner and any tenant, except that an operator shall compensate a tenant of the surface owner for any leasehold improvements damaged as a result of the operator's oil and gas operations if the improvements are approved and authorized by the surface owner. The compensation shall equal the cost of repairing or replacing the improvements.
C. An operator shall reclaim all the surface affected by the operator's oil and gas operations."
SECTION 2. Section 70-12-7 NMSA 1978 (being Laws 2007, Chapter 5, Section 7) is amended to read:
"70-12-7. DAMAGES.--In an action brought pursuant to the Surface Owners Protection Act, if the court finds that compensation is owed under Section [3 of the Surface Owners Protection Act] 70-12-4 NMSA 1978, the court may also award the prevailing party:
A. attorney fees and costs if:
(1) the operator conducted oil and gas operations without providing notice as required by Subsection B of Section [4 of the Surface Owners Protection Act] 70-12-5 NMSA 1978;
(2) the operator conducted oil and gas operations without a surface use and compensation agreement and before depositing a bond or other surety as required by Section [5 of the Surface Owners Protection Act] 70-12-6 NMSA 1978;
(3) the operator conducted oil and gas operations outside the scope of a surface use and compensation agreement and, when entering into the agreement, knew or should have known that oil and gas operations would be conducted outside the scope of the agreement; or
(4) the surface owner failed to exercise good faith in complying with the provisions of the Surface Owners Protection Act or the terms of a surface use and compensation agreement; or
B. attorney fees, costs and treble damages if the court finds, by clear and convincing evidence, that:
(1) the operator willfully and knowingly entered upon the premises for the purpose of commencing the drilling of a well:
(a) without giving notice of the entry as required by Subsection B of Section [4 of the Surface Owners Protection Act] 70-12-5 NMSA 1978; or
(b) without a surface use and compensation agreement with the surface owner and before depositing a bond or other surety pursuant to Section [5 of the Surface Owners Protection Act] 70-12-6 NMSA 1978; or
(2) either the surface owner or the operator willfully and knowingly violated the surface use and compensation agreement."
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