New Mexico House committee kills bills to support donations for rural road projects

Adrian Hedden
Carlsbad Current-Argus

Two bills that would incentivize private donations to county road projects were tabled by the House Taxation in Revenue Committee with opponents of the legislation citing concerns that wealthy companies could direct local government priorities if the bills moved forward.

New Mexico Rep. Cathrynn Brown (R-55) sponsored both House Bill 276, which would create a tax deduction for donations and House Bill 104 which would add a tax credit.

Both bills would have allowed a donor, whether and person or company, to choose which project their donation would be used for to get the tax benefit.

They were voted down in committee and failed to reach the House Floor.

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Brown said the intention was to create new mechanisms and incentives for funding for county roads, particularly in her district in southeast New Mexico where oil and gas production boomed and added dramatic increases of industrial truck traffic to the rural area.

“This bill is addressing a need we have for getting more money for county road departments, really throughout the state,” she said during the Monday hearing for HB 276 before the House Taxation and Revenue Committee.

State House Rep. Cathrynn Brown (R-55)

She said she initially proposed a 100 percent tax credit for donations during the 2019 Legislative Session, but that was tabled. This year, Brown said she “trimmed” the credit to 50 percent in HB 104 but that was also subsequently tabled before reaching the floor.

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As an alternative, HB 276 would allow for a tax deduction of 50 percent of the donation, but not more than $1 million.

This move could make it easier for lawmakers to support the bill, Brown said.

“Now we’re back to the deduction idea,” Brown said. “This suggestion was made by Speaker (Bryan) Egolf to make that a little easier for the state to accommodate. We have people who are willing to donate to their county roads, but they don’t know the mechanisms for doing so.

“This bill clarifies that it can be done. It also incentivizes them. It’s kind of a public-private partnership.”

More:New Mexico House bills could support rural road projects

Eddy County Public and Government Affairs Director Jerry Fanning said the bill would benefit southeast New Mexico by creating more revenue to keep the roads safe for locals and oil and gas workers alike.

He said companies and locals in the region had asked for such a measure.

“This is a fantastic bill for our part of the world,” Fanning said before the committee. “We continually come here asking for money for our roads, and we appreciated what you’ve done for us fashion. This allows private people and companies to be able to help out in that effort.”

More:Eddy County Public Works: Potholes on London Road to disappear

Support was also voiced by the City of Carlsbad’s Deputy City Manager Wendy Austin, echoing the benefits mentioned by Fanning.

Patrick Killen, a lobbyist for Chevron also voiced support of the bill.

Aimee Barabe, director of government affairs at the New Mexico Oil and Gas Association said the bill would increase safety for oil and gas operators in the Permian.

“We stand in strong support of this bill,” she said. “Safety remains a top priority for our member companies, many of which are in southeast New Mexico.”

More:17 people died on Eddy County roads last year

Contentions to the bill centered around what Brown called “donor advising” which allows donors to specify how their donations would be used.

Rep. Christine Chandler (D-43) said she was concerned the bill would allow private companies to make decisions regarding public infrastructure that should be left up to government, and that communities without wealthy companies could miss out.

“One of the concerns I have about mechanisms like this is it sort of subsumes what government does,” she said. “County government, city government make priorities for road projects. Under-served areas have the potential for not getting that attention because we have a wealthy entity kind of directing what it believes the priorities should be.

“It sort of interferes with the natural governance process.”

More:Death highway: A massive oil boom in Permian Basin made rural roads dangerous

Co-chair of the committee Rep. Javier Martinez (D-11) said state lawmakers have already supported road projects, particularly in the southeast, and that local governments at the city and county level should do more to raise revenue for such work.

“I think we all agree our roads need more attention,” Martinez said. “This legislation has been working toward that. There are mechanisms locally for you to raise the revenues aside from what we do here at the state level.”

New Mexico Rep. Javier Martinez (D-11)

Martinez also said he was concerned about private companies deeming which public infrastructure projects could get funding.

More:Carlsbad leaders demand state support as community struggles to adapt to oil and gas boom

"I think it’s a slippery slope if we start giving tax benefits for donations for what are supposed to public projects,” he said. “I’m a big believer in private-public partnerships, but there is some limit. We can have buildings and we can have economic development, but once we start building roads and water lines at some point, and sewer lines, it gets tricky for me.”

Brown argued that the bill was a new way of addressing rural roads that long struggled for funding.

“If there’s not the money in the county road fund, then the roads just don’t get built or maintained up to where they need to be,” she said. “This is just trying to be innovative and trying to get some to the roads.”

Adrian Hedden can be reached at 575-628-5516, achedden@currentargus.com or @AdrianHedden on Twitter.