New Mexico's Commissioner of Public Lands, Stephanie Garcia Richard, is advocating for an increase in the top royalty rate for new oil and gas development on state lands. The proposal suggests raising the current rate from 20% to a market rate of 25%. This change, introduced by Senator George Muñoz, aims to align New Mexico's rates with those in Texas and on private lands within the state. It is projected to generate significant additional revenue for public schools and other institutions.

Representative McQueen previously introduced similar legislation that advanced significantly during the 2024 legislative session, passing through the House of Representatives.

Commissioner Garcia Richard stated, “New Mexico’s school kids should not be subsidizing the multi-billion-dollar oil and gas industry, period.” She emphasized the importance of aligning with Texas' recognition of the Permian Basin as a leading area for oil and gas production.

Senator Muñoz expressed his commitment to enhancing life for New Mexicans through this legislation. He noted that increased royalties would directly benefit public schools by boosting state savings. “Raising the state’s top oil and gas royalty rate puts millions more into the state’s savings,” he said.

The last adjustment to New Mexico's royalty rate occurred in the 1970s. The proposed legislation targets new leases on highly productive parcels of state land. Royalties are payments made by companies for extracting resources like oil and gas from these lands.

The Legislative Finance Committee estimates that implementing a 25% market rate could contribute an additional $50–$75 million annually to the Land Grant Permanent Fund (LGPF). The State Investment Council projects that this could lead to an increase in LGPF value by $1.5–$2 billion by 2050, with cumulative distributions rising between $750 million and $1.3 billion over the same period.