NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

The LFC is only preparing FIRs on bills referred to the Senate Finance Committee, the Senate Ways and Means Committee, the House Appropriations and Finance Committee and the House Taxation and Revenue Committee. The chief clerks are responsible for preparing and issuing all other bill analyses.

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(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Energy, Minerals and Natural Resources Department

Commissioner of Public Lands

SUMMARY

Synopsis of Senate Conservation Committee Amendment

The amendment strikes the phrase referring to pipeline companies "and, unlike governmental entities, private pipeline companies are not subject to the political process or to public scrutiny in making decisions to condemn land".

Synopsis of Bill

The bill requests the Legislative Council to assign an appropriate interim committee or create a special interim committee to study issues involved in the exercise of eminent domain powers by pipeline companies and make recommendations to the 2000 legislature.

Significant Issues

Section 70-3-5 NMSA 1978 states in part: "Any person, association or corporation may exercise the right of eminent domain to take and acquire the necessary right-of-way for the construction, maintenance and operation of pipelines . . . for the purpose of conveyance of petroleum, natural gas, carbon dioxide gas and the products derived therefrom, but any such right-of-way shall in all cases be so located as to do the least damage to private or public property consistent with proper use and economical construction." However, the New Mexico Supreme Court qualified this power as to private entities in Kennedy v. Yates Petroleum Corp., 101 N.M. 268, 681 P.2d 53 (1984). The Supreme Court determined that in an eminent domain proceeding instituted by a private corporation, a real and substantial relation to the public use must be demonstrated to the court prior to an affirmative determination of eminent domain authority.

FISCAL IMPLICATIONS

The expenses of this study would be absorbed by the appointed interim committee.

ADMINISTRATIVE IMPLICATIONS

The Legislative Council Service will likely be required to provide staff support.

OTHER ISSUES

According to the Commissioner of Public Lands analysis, certain authorities exist that may effect the ability of pipeline companies to exercise eminent domain on private property depending on the project. Some projects may be subject to extensive public participation and review through the National Environmental Policy Act if federal land is involved. Additionally, state trust land does not fall under the authority of pipeline companies to exercise eminent domain.

DKB/prr