TITLE 19 NATURAL RESOURCES AND WILDLIFE

CHAPTER 15 OIL AND GAS

PART 3 RULEMAKING

19.15.3.1 ISSUING AGENCY: Energy, Minerals and Natural Resources Department, Oil Conservation Division.

[19.15.3.1 NMAC - Rp, 19.15.14.1 NMAC, 12/1/08]

19.15.3.2 SCOPE: 19.15.3 NMAC applies to persons or entities engaged in rulemaking proceedings before the commission.

[19.15.3.2 NMAC - Rp, 19.15.14.2 NMAC, 12/1/08]

19.15.3.3 STATUTORY AUTHORITY: 19.15.3 NMAC is adopted pursuant to the Oil and Gas Act, NMSA 1978, Section 70-2-6, which grants the oil conservation division and the oil conservation commission jurisdiction and authority over all matters relating to the conservation of oil and gas, the prevention of waste of oil and gas and of potash as a result of oil and gas operations, the protection of correlative rights and the disposition of wastes resulting from oil and gas operations, and NMSA 1978, Section 70-2-7, which provides that the division shall prescribe by rule its hearing procedures.

[19.15.3.3 NMAC - Rp, 19.15.14.3 NMAC, 12/1/08]

19.15.3.4 DURATION: Permanent.

[19.15.3.4 NMAC - Rp, 19.15.14.4 NMAC, 12/1/08]

19.15.3.5 EFFECTIVE DATE: December 1, 2008, unless a later date is cited at the end of a section.

[19.15.3.5 NMAC - Rp, 19.15.14.5 NMAC, 12/1/08]

19.15.3.6 OBJECTIVE: To establish procedures for commission rulemaking proceedings.

[19.15.3.6 NMAC - Rp, 19.15.14.6 NMAC, 12/1/08]

19.15.3.7 DEFINITIONS: [RESERVED]

[See 19.15.2.7 NMAC for definitions.]

[19.15.3.7 NMAC - N, 12/1/08]

19.15.3.8 RULEMAKING INITIATION:

A. The commission may commence a rulemaking proceeding by issuing an order initiating rulemaking. The division, an operator or producer or other person may initiate a rulemaking proceeding by filing an application to adopt, amend or repeal a rule with the commission clerk. The application shall be in writing and applicants shall specifically identify the rule the applicant seeks for the commission to adopt, amend or repeal. The application or order initiating rulemaking shall include the following:

(1) a brief summary of the proposed rule change’s intended effect;

(2) a proposed draft of the new rule or amendment;

(3) the applicant’s name;

(4) the applicant’s address, or the address of its attorney, including an e-mail address and fax number if available;

(5) a proposed legal notice for publication; and

(6) any other matter a commission order requires.

B. An applicant shall file six sets of the application for rulemaking with the commission clerk. The applicant shall file the application by delivering the application to the commission clerk in person, by mail or by facsimile, as long as the applicant mails or delivers six sets of the application to the commission clerk on the next business day.

C. Upon receiving an application for rule change the commission clerk shall file the application, and shall deliver a copy to all commissioners within 10 business days of the application’s receipt. Unless the commission chairman or another commissioner indicates, within 10 business days following the commission clerk’s delivery of the rule change application, that a hearing is not necessary or appropriate, the chairman shall schedule a hearing on the rule change application. If a commissioner indicates to the chairman, or if the chairman concludes, that a hearing is not necessary or appropriate because the application is repetitive or frivolous or for any other lawful reason, the commission shall determine within 60 days of the application’s filing whether to hear the application, and if the commission decides to hear the application, the chairman shall schedule a hearing on the rule change application.

D. 19.15.3.8 NMAC shall not apply to special pool orders, which the commission or the division may adopt, amend or rescind in adjudicatory proceedings subject to 19.15.4.9 NMAC and 19.15.4.12 NMAC’s notice provisions.

[19.15.3.8 NMAC - Rp, 19.15.14.1201 NMAC, 12/1/08]

19.15.3.9 RULEMAKING NOTICE:

A. The division shall publish notice of a proposed rulemaking set for the hearing in the name of the “State of New Mexico”, signed by the commission chairman and bearing the commission’s seal. The notice shall state the hearing’s date, time and place and the date by which those commenting shall submit their written comments to the commission clerk. The notice shall be published as follows:

(1) one time in a newspaper of general circulation in the counties that the proposed rule change affects, or if the proposed rule change will have statewide effect, in a newspaper of general circulation in the state, no less than 20 days prior to the scheduled hearing date;

(2) on the applicable docket for the commission hearing at which the commission will hear the matter, which the commission clerk shall send by regular or electronic mail not less than 20 days prior to the hearing to all who have requested such notice;

(3) one time in the New Mexico register, with the publication date not less than 10 business days prior to the scheduled hearing date; and

(4) by posting on the division’s website not less than 20 days prior to the scheduled hearing date.

B. In cases of emergency, the commission chairman may shorten these time limits by written order.

[19.15.3.9 NMAC - Rp, 19.15.14.1202, 12/1/08]

19.15.3.10 COMMENTS ON RULEMAKING: A person may submit written, electronic or facsimile comments on a proposed rule change, and those comments shall be made part of the hearing record. Individuals or entities shall provide written comments on the proposed rule change to the commission clerk not later than five business days before the scheduled hearing date, unless the commission chairman or the commission extends the time for filing comments. The commission chairman or the commission may extend the time for filing written, electronic or facsimile comments by making an announcement at the hearing, or by posting notice on the division’s website. A person may review written, electronic or facsimile comments on a proposed rule change at the division’s Santa Fe office. The division shall post copies of written, electronic or facsimile comments that persons have filed with the commission clerk on the division’s website as soon as practicable after they are filed.

[19.15.3.10 NMAC - Rp, 19.15.14.1203 NMAC, 12/1/08]

19.15.3.11 RULEMAKING HEARING PARTICIPATION:

A. Non-technical testimony.

(1) A person may testify or make an un-sworn statement at the rulemaking hearing. A person does not need to file prior notification with the commission clerk to present non-technical testimony at the hearing.

(2) A person may also offer exhibits in connection with the testimony, so long as the exhibits are relevant to the proposed rule change and do not unduly repeat the testimony. A person offering exhibits shall file exhibits prior to the scheduled hearing date or submit them at the hearing.

(3) Members of the general public who wish to present non-technical testimony should indicate their intent on a sign-in sheet at the hearing.

B. Technical testimony.

(1) A person, including the division, who intends to present technical testimony or cross-examine witnesses at the hearing shall, no later than five business days before the scheduled hearing date, file six sets of a pre-hearing statement with the commission clerk. Corporations, partnerships, governmental agencies, political subdivisions, unincorporated associations and other collective entities shall appear only through an attorney or through a duly authorized officer or member.

(2) The pre-hearing statement shall include the person or entity’s name and its attorney’s name; the names of all witnesses the person or entity will call to testify at the hearing; a concise statement of each witnesses’ testimony; all technical witnesses’ qualifications including a description of the witnesses’ education and experience; and the approximate time the person or entity will need to present its testimony. The person or entity shall attach to the pre-hearing statement any exhibits it plans to offer as evidence at the hearing. A corporation or other entity not represented by an attorney shall identify in its pre-hearing statement the person who will conduct its presentation and shall attach a sworn and notarized statement from the corporation’s or entity’s governing body or chief executive officer attesting that it authorizes that person to represent the corporation or entity.

(3) The commission may exclude any expert witnesses or technical exhibits not identified in or attached to the pre-hearing statement unless the testimony or exhibit is offered solely for rebuttal or the person or entity offering the testimony or exhibits demonstrates good cause for omitting the witness or exhibit from its pre-hearing statement.

(4) The division shall post copies of pre-hearing statements filed with the commission clerk on the division’s website as soon as practicable after they are filed. A person may review pre-hearing statements filed with the commission clerk at the division’s Santa Fe office.

C. Modifications to proposed rule changes.

(1) A person, other than the applicant or a commissioner, recommending modifications to a proposed rule change shall, no later than 10 business days prior to the scheduled hearing date, file a notice of recommended modifications with the commission clerk.

(2) The notice shall include:

(a) the text of the recommended modifications to the proposed rule change;

(b) an explanation of the recommended modification’s impact; and

(c) reasons for adopting the modification.

[19.15.3.11 NMAC - Rp, 19.15.14.1204 NMAC, 12/1/08]

19.15.3.12 RULEMAKING HEARINGS:

A. Conduct of hearings.

(1) The rules of civil procedure and the rules of evidence shall not apply.

(2) The commission shall conduct the hearing so as to provide a reasonable opportunity for all persons to be heard without making the hearing unreasonably lengthy or cumbersome and without unnecessary repetition. The hearing shall proceed as follows:

(a) the hearing shall begin with a statement from the commission chairman identifying the hearing’s nature and subject matter and explaining the procedures to be followed;

(b) the commission may allow persons to make a brief opening statement;

(c) unless otherwise ordered, the applicant, or in the case of commission initiated rulemaking, commission or division staff, shall present its case first;

(d) the commission chairman shall establish an order for other participants’ testimony based upon notices of intent to present technical testimony, sign-in sheets, the availability of witnesses who cannot be present for the entire hearing and any other appropriate factor;

(e) the commission may allow persons to make a brief closing statement;

(f) if the hearing continues for more than one day, the commission shall provide an opportunity each day for public comment;

(g) at the close of the hearing, the commission shall determine whether to keep the record open for written submittals including arguments and proposed statements of reasons supporting the proposed commission decision; in considering whether the record will remain open, the commission shall consider the reasons why the material was not presented during the hearing, the significance of material to be submitted and the necessity for a prompt decision; if the commission keeps the record open, the commission chairman shall announce at the hearing’s conclusion the subjects on which the commission will allow submittals and the deadline for filing the submittals; and

(h) if the hearing is not completed on the day that it commences, the commission may, by announcement, continue the hearing as necessary without further notice.

B. Testimony and cross-examination.

(1) The commission shall take all testimony under oath or affirmation, which may be accomplished en masse or individually. However, a person may make an un-sworn position statement.

(2) The commission shall admit relevant evidence, unless the commission determines that the evidence is incompetent or unduly repetitious.

(3) A person who testifies at the hearing is subject to cross-examination by a person who has filed a pre-hearing statement on the subject matter of the person’s direct testimony. A person who presents technical testimony may also be cross-examined on matters related to the person’s background and qualifications. The commission may limit cross-examination to avoid harassment, intimidation, needless expenditure of time or undue repetition.

C. Exhibits.

(1) A person offering an exhibit shall provide six sets of the exhibit for the commission, copies for each of those individuals or entities that have filed an intent to present technical testimony or cross-examine witnesses at the hearing and five additional copies for others who may attend the hearing.

(2) Exhibits offered at the hearing shall be marked with a designation identifying the person offering the exhibit and shall be numbered sequentially.

D. Transcript of proceeding.

(1) The commission shall make a verbatim record of the hearing.

(2) A person may obtain a copy of the hearing transcript. The person requesting the copy shall pay for the cost of the copy of the hearing transcript.

E. Deliberation and decision.

(1) If a quorum of the commission attended the hearing, and if the hearing agenda indicates that a decision might be made at the hearing’s conclusion, the commission may immediately deliberate and make a decision in open session on the proposed rule change based on a motion that includes reasons for the decision.

(2) If, during the course of deliberations, the commission determines that additional testimony or documentary evidence is necessary for a proper decision on the proposed rule change, the commission may reopen the hearing for additional evidence after notice pursuant to 19.15.3.9 NMAC.

(3) The commission shall issue a written order adopting or refusing to adopt the proposed rule change, or adopting the proposed rule change in part, and shall include in the order the reasons for the action taken.

(4) Upon the commission’s issuance of the order, the commission clerk shall post the order on the division’s website and mail or e-mail a copy of the order to each person who presented non-technical testimony at the hearing or who filed a pre-hearing statement, or the person’s attorney.

F. Filing. The division shall file with the state records center and archives and publish any rule the commission adopts, amends or repeals consistent with the State Rules Act.

[19.15.3.12 NMAC - Rp, 19.15.14.1205 NMAC, 12/1/08]

HISTORY of 19.15.3 NMAC:

History of Repealed Material: 19.15.14 NMAC, Procedure (filed 09/16/2005) repealed 12/1/08.

NMAC History:

Those applicable portions of 19.15.14 NMAC, Procedure (Sections 1-6, 1201 - 1205) (filed 09/16/2005) were replaced by 19.15.3 NMAC, Rulemaking, effective 12/1/08.