NM House Approves Oil Tax Increase
New Mexico – The House has approved a tax increase on oil to help finance remediation of a brine well that could collapse in Carlsbad.
Rep. John Heaton, a Carlsbad Democrat, says the tax will generate $2 million a year.
A higher tax rate will apply on oil production when prices exceed $70 a barrel.
A brine well has created a giant cavern beneath part of Carlsbad. There's a risk of a cave-in that could damage a highway, a church, a trailer park, businesses and an irrigation canal.
Money from the current oil and gas conservation tax helps pay for remediation of abandoned wells and production facilities.
The tax measure passed the House 38-23 on Tuesday and was sent to the Senate for consideration.
The brine well financing bill is HB208.
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Copyright 2010 The Associated Press.