Brine well bill passes Senate, could take funds from vehicle tax
Legislation intended to generate the funds officials contend are needed to prevent the Carlsbad Brine Well from collapse passed the New Mexico Senate Thursday, and will move on to the House of Representatives before going to Gov. Susana Martinez’s desk to be signed into law.
A unanimous, 37-0 vote on the Senate floor pushed the bill into the House where it could be amended before it goes before the governor for approval.
Introduced by Sen. Carroll Leavell (R-41), Senate Bill 226 redirects 4/15 of the State’s vehicle excise tax, which is paid when purchasing a car or truck, from the General Fund into the State Road Fund.
For the first three years, revenue from the tax would be appropriated from the Road Fund into the Carlsbad Brine Well Remediation Fund for use in the project to backfill the cavity ahead of its collapse.
In total, the move would create $30 million for remediation, at $10 million per year.
After three years, the tax would revert back to the Road Fund, generating about $125 million over the next 25 years, said John Heaton, chair of the Carlsbad Brine Well Remediation Advisory Authority.
It will likely be Friday morning after being assigned to a House committee, he said.
“It’s a win-win,” Heaton said. “We really had no negative comments. Now it moves to the House, and our focus becomes getting it through the House.”
SB 226 was the latest of multiple attempts during the current 30-day legislative session to secure most of the $43 million estimated cost associated with the well's remediation.
If the well collapses, experts estimated up to $1 billion in damages to infrastructure, lost tourism and death.
The well site was previously owned by I&W, but was decommissioned in 2008 when the ground was deemed unstable, and the company later declared bankruptcy.
The well is situated beneath the South Y highway junction of U.S. Highway 285 and U.S. Highway 62/180, the main roadway for traffic related to the oil and gas industry.
It is also underneath the Carlsbad Irrigation District's main canal, which serves thousands of acres of farmland in southern Eddy County.
Fissures in the earth at the well site were observed, along with rock falls and a thinning layer of land above the cavity.
Officials estimated the well could collapse as soon as 2022.
The session ends at noon on Feb. 15.
A package of Senate bills presented by Leavell to sweep about $35 million from numerous state funds was defeated in a committee hearing on Jan. 25.
Identical House bills introduced by Rep. Cathrynn Brown (R-55) remain in the House for consideration.
Heaton said SB 226 has emerged as the Authority’s best chance this year to get funding and begin work on the cavity.
“For a number of years, people have been talking about using that money (from the vehicle excise tax) for fixing roads,” he said. “(SB 226) gets our well filled and creates money for the road fund after the three-year appropriation. Everybody wins.”
The vehicle tax was targeted for funding, Heaton said, because car prices continue to rise and people keep buying them.
The State’s gas tax, he said, was not ideal as less gas is being purchased and used due to emerging automotive technologies.
“There’s less money going into the road fund (through the gas tax) because less is being used,” Heaton said. “Car prices seem to continue to rise. People continue to buy cars. As a consequence, that tax is stable and rising.”
The bill was crafted through a deal with the New Mexico Department of Transportation, Heaton said, with support from Cabinet Secretary Tom Church.
Church could not immediately be reached for a comment.
“I feel certain that the staff and the appropriators worked together,” Heaton said. “I’m confident. It passed unanimously, and we hope that will give it legs.”
Adrian Hedden can be reached at 575-628-5516, firstname.lastname@example.org or @AdrianHedden on Twitter.