Legislation to increase the top royalty rate for oil and gas development on New Mexico state lands has advanced in the House Appropriations and Finance Committee. Senate Bill 23, backed by New Mexico Commissioner of Public Lands Stephanie Garcia Richard, proposes raising the royalty rate from 20% to 25%. This change aims to align with rates in Texas and on private lands within New Mexico.
The bill, sponsored by Sen. George Muñoz and co-sponsored by Speaker of the House Javier Martinez, Sen. Liz Stefanics, and Rep. Matthew McQueen, is projected to generate significant additional revenue for public schools and other institutions in New Mexico. It has already passed through several legislative hurdles, including the House Energy, Environment & Natural Resources Committee and the full Senate.
Commissioner Garcia Richard emphasized the importance of this legislation, stating: “Passing through Appropriations today is a really big deal. With one more successful vote on the House floor we will guarantee millions more every year for our public schools and other important institutions.” She added that adjusting rates to match those in Texas is a sound business decision that benefits New Mexicans.
Sen. Muñoz expressed his commitment to improving life for residents, noting: “Remember that the money from oil and gas royalty rates goes directly to benefit our public schools.” He urged fellow lawmakers to support this update for long-term benefits.
Rep. McQueen highlighted fairness in raising rates: “We are simply asking companies to pay the same rate they pay to lease land from private landowners and neighboring states like Texas.”
The proposed increase would apply only to new leases on highly productive parcels of state land. The Legislative Finance Committee estimates that offering a 25% market rate could add $50 – $75 million annually to the Land Grant Permanent Fund (LGPF). The State Investment Council projects an increase in LGPF value by up to $2 billion by 2050 due to these changes.
Senate Bill 23 now awaits consideration on the House floor.
Since taking office in 2019, Commissioner Garcia Richard has overseen significant financial contributions from state trust lands for public services while maintaining a focus on environmental protection across over 13 million acres leased for various uses.
