RESOLUTION NO.

2014-1496 A RESOLUTION ENDORSING PROPOSED EFFORTS BY LEGISLATORS SERVING IN THE NEW MEXICO LEGISLATURE THAT WOULD PROHIBIT PROJECTS FUNDED BY SEVERANCE TAX BOND PROCEEDS FROM BEING LOCATED WITHIN LOCAL GOVERNMENT ENTITIES THAT PROHIBIT OR SEVERELY RESITRICT OIL AND GAS DRILLING ACTIVITIES WITHIN THEIR JURISIDCTIONS WHEREAS, during the 2010 New Mexico Legislative Session, Senator William Sharer introduced Senate Bill 8; and WHEREAS, that bill, had it passed, would have prohibited funding provided by severance tax bonds from being used to fund projects that were located within the jurisdiction of local government entities that had adopted local ordinances having an onerous effect on the extractive industries; and WHEREAS, on February 6, 2013, thirty members of the New Mexico House of Representatives, issued a letter to New Mexico Governor Martinez on this same topic; and WHEREAS, that letter specifically requested that the Governor, give careful consideration to capital outlay projects located in those counties or municipalities that have voluntarily restricted the extractive industries; and WHEREAS, the letter from February 6, 2013 states a significant portion of available capital outlay funds is derived from severance tax bonds. These bonds are repaid with revenue from taxes on natural resources such as oil, gas and coal. Of course, the amount available through severance tax bonds largely depends on the health of these industries; and WHEREAS, the point made by this 2010 bill, the February 6, 2013 letter to Governor Martinez and other similar efforts, is that local governments that choose to enact ordinances and regulations that discourage oil and gas exploration and production are benefitting from a funding source that comes from the revenue created by the very activities that they local government is burdening; and WHEREAS, The City Council recognizes that Supplemental Severance Tax Bonds are dedicated to public schools across the State of New Mexico and are also involved in the Zuni lawsuit. And, while these bonds are dependent upon the health of extractive industry, schools across the state should be protected from any proposal restricting the use of severance tax bonds. WHEREAS, since 2010 more local governments have discussed and imposed additional restrictions on drilling activities and the need has increased to educate these entities that they are affecting the States economy and state revenues; and

WHEREAS, the City Council supports efforts like SB 8 and those urging the Governor of New Mexico to give careful consideration prior to approving projects that as a means by which to demonstrate to local governments throughout the state that we need to encourage rather than discourage oil and gas drilling activity if we want to maintain a thriving economy here in New Mexico. NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY OF FARMINGTON, that the City of Farmington supports efforts in the New Mexico Legislature to adopt legislation that prohibits the funding of projects derived from the issuance of senior severance tax bonds for projects located within the jurisdiction of local government entities that adopt ordinances or regulations that either prohibit or severely restrict drilling activities for the exploration or production of oil and gas minerals. BE IT FURTHER RESOLVED that a copy of this resolution be sent to each member of the New Mexico Legislature representing citizens within San Juan County, the Speaker of the New Mexico House of Representatives, the President Pro Tempore of the New Mexico Senate, and the Honorable Governor Suzanna Martinez. PASSED, APPROVED, SIGNED AND ADOPTED this 4th day of February, 2014.

________________________ Tommy Roberts, Mayor Seal Attest:

________________________ Dianne Smylie, City Clerk