I have never enjoyed watching a hearing more: Rep. Susan Herrera introduced HB 132 and then orchestrated a seamless series of powerful testimonials that artfully and emotionally made an irrefutable case for HB 132 and a 36% lending cap. With the very late but critical message from the Governor, the Speaker was able to secure 51 votes in support of HB132, far more than the 42 needed to pass. High drama and strong leadership made all the difference. After years of trying, a 36% rate cap is within reach.

IMPORTANT UPDATE: We have carefully considered our position on HB 6 Clean Future Act and we now cautiously support the current committee substitute. We feel that though amendments have not gone far enough, they are a meaningful improvement. We apologize that this shift in position came so late, but this has been a very tough call. Please see a detailed explanation near the end of this post, with a link to revised talking points.

Last reminder: Legislative Strategy Huddle via Zoom, Weds., Feb. 9, 6-7 p.m. We’ll discuss the craziness of this Session and make time to hear from you. Then we’ll talk to former Senator Dede Feldman, author of Inside the New Mexico Senate (2014), Another Way Forward: Grassroots Solutions from New Mexico (2017), and Ten More Doors: Politics and the Path to Change (2021) to get her thoughts and advice. You must register to participate. Click this link to register.

Another “Hydra”gen Head Emerges

We will offer more on HB 132 below, but first “Hydra”gen raises yet another head, as Rep. Lundstrom introduced HB 228 on Tuesday. HB 228 is being described as “just a public-private” partnership bill, but the first sentence of the bill makes clear what is actually in play:

“ENACTING THE HYDROGEN HUB DEVELOPMENT ACT; PROVIDING FOR THE DESIGNATION OF HYDROGEN HUBS; ALLOWING PUBLIC PARTNERS TO ENTER INTO PUBLIC-PRIVATE PARTNERSHIP AGREEMENTS TO FACILITATE DEVELOPMENT OF HYDROGEN HUB PROJECTS;”

Did bill sponsors think we wouldn’t notice? Our message is clear, no matter how many iterations are tried: environmental groups are unified in opposition to all forms of hydrogen development. Period. Hard stop.

This bill is clearly designed to push through the original HB 4 Hydrogen Hub Development Act, as the first words of the bill announce. In talking with Speaker Egolf on Tuesday, I was told that it was referred for just one hearing: House Commerce & Economic Development. (See last night’s Alert at this link for details on that hearing today at 1:30 and six others this morning and afternoon!) But this Hydra head faces three daunting challenges:

1. overcoming that first sentence, “enacting the hydrogen hub development act”;
2. a strongly united, well-informed, but wary alliance of environmental groups;
3. having just nine days to cobble together arguments that convince anyone that this is just a public-partnership agreement and should pass.

With a strongly united environmental alliance opposing all forms of hydrogen, no matter the bill name or number, we have:

• Successfully achieved a tabling of HB 4, Hydra 1, in House Energy Environment & Natural Resources;
• Convinced the Speaker that Hydra 2, HB 227, and its single assignment to HAFC, was going to meet fierce opposition on the House and Senate floors, and so he effectively killed it by placing it on the Speaker’s Table (something I’ve never seen), removing it from further consideration;
• Achieved a tabling of SB 194, Hydra 3, on a 7-2 vote, with no Dem. dissent. SB 194 would have redefined hydrogen in statute as a renewable energy source and if passed could have been used to authorize $125M of hydrogen hub development funding in HB2. Those funds are contingent upon passing the Hydrogen Hub Act or “a related hydrogen bill.” The committee was not fooled. The ease with which this was tabled bodes poorly for the fate of HB 228.

We will keep you informed whenever new Hydras are introduced. But no matter how many battles we win, do not start popping champagne corks until noon, Feb 18. Remember how “produced water” miraculously passed at 3;30 am with only 18 hours left in the session. Remain alert and engaged.

To read the full bill, click here. We won’t be amending our talking points here because the arguments against hydrogen production are the same as they were for HB 4 and HB 227. But it’s important to note the differences in HB 228, primarily it removes all language about tax credits and deductions. But bottom line, HB 228 would create hydrogen hubs and invest $125M of state funding in an initiative doomed to fail economically and environmentally as our summary outlines.

A Huge Win on Lending Rates

Going into the session, with only silence from the Governor, our allies in the Fair Lending coalition were not at all confident a decent lending bill would even be heard, much less that a good bill would receive “do pass” votes from 51 House members, appearing to breeze through. But the path to 51 votes wasn’t easy, and at 1 p.m. on Monday it appeared that once again Rep. Alcon had skewered the bill by introducing a motion to send it back to House Rules because the allocation that had allowed Rules to deem the bill germane had been removed. Given that after the motion, the Speaker abruptly adjourned the meeting, it appeared he might not have had the votes to overcome the challenge. And with no allocation, Rules would not have been able to credibly deem the bill germane.

When the house reconvened at 4 pm, the hearing began as usual with “Messages.” Usually “messages” are about bills that have passed the Senate and need committee assignments in the House. But that day, “Executive Message 28” was announced, and a breathless chamber waited to hear if the Speaker had convinced the Governor to finally put lending rates on her “call.” He had! All that remained was to avoid unfriendly amendments on the House Floor in the 8pm session, and that mission was accomplished.

I can’t fairly convey how well the House floor presentation and debate was orchestrated. First, Rep. Herrera took 15-20 minutes to introduce the bill and present data that put in bold relief the large number of borrowers who need 2-3 loans to pay off their first loan, and the huge total cost with which most borrowers are ultimately burdened. She then had organized a series of legislators whose families had been harmed by storefront loans. They offered one vivid example after another of family members being exploited, with Rep. Joy Garrett’s story being particularly compelling. By having eight Reps. in support of the bill, all queued up to speak, it deprived opposition an opportunity to immediately voice their concerns.

But Rep. Herrera deftly anticipated that concerns would be raised that 36% loans for $500 or less would no longer be available, as the cost of administering the loans would exceed their return. Herrera somehow convinced Rep. Cadena to introduce two amendments that were deemed “friendly.” This essentially placed Rep. Cadena in support of the bill as amended — a critical move, as in 2021, Cadena was among the Reps. in House Judiciary who supported the 99% amendment. This time her amendment added a relatively benign 5% fee on loans of $500 and below, effectively making the rate cap on those loans 41%, a relatively small concession to protect the 36% rate cap. The amendment from being available. Most GOP commenters on the amendment praised it while indicating it did not go far enough.

The second amendment was also deemed “friendly” and simply required credit unions to report on the small loans they make, just as storefront lenders do. Rep. Cadena indicated that this data could inform legislators in future sessions when making loan policy. Both amendments passed by voice votes.

On to the vote on the bill itself. As the electronic board began to record votes, it became clear a “Do pass” was coming, and the crowning vote was when Rep. Lundstrom voted “yes.” A vote that was expected to be close was not remotely close, with only 2 Dems voting “no” (Alcon and Castellano). The process that was anticipated to be so divisive was actually one that wound up unifying the Dems., and by achieving 51 “yes” votes the House sent a strong message to the Senate: We did our part. Your turn.

While Senate Judiciary can be unpredictable and can present scheduling problems, with the Governor and the House sending a clear message, we hope it will be scheduled, heard, and passed quickly.

HB 6 Clean Future Substitute Bill

We could not initially support HB 6 without substantial amendments, but we now cautiously support this bill. We feel that though amendments have not gone far enough, they are a meaningful improvement. We fear that holding out for the perfect could wind up being the enemy of the good. What’s more, NM Oil & Gas Assoc. is pouring money into opposing the bill. We can’t fathom aligning our position with NMOGA. This is a very hard call because the amendments we still seek are important, and you may find yourself wanting to speak in opposition to the bill. But consider that if you do, you could be speaking just before or after a NMOGA lobbyist or an exec. from a big fossil fuel corporation. So our recommendation is to speak in support, but to identify amendments sought in our summary. We apologize that this shift in position came so late, but this has been a very tough call. Read our revised speaking points at this link.

For analysis of what is changed in HB 6, below we review analyses coming from two allies — Sierra Club and YUCCA.

From Sierra Club

Notes on changes between HENRC Sub and HGEIC Sub:

• Section 2/Definitions:
  • Removed “excess emission reduction credit” as a defined term and explicit compliance pathway. Relatedly, added some reference to early actions and those in excess of requirements to “direct emission reduction”
  • Changed “regulated sector” to “emitting sector” – because this is the reporting section, not the reduction section. 
  • Some clarification/simplification in “net-zero emissions” definition
• Targets/Section 3:
  • Eliminate reference to “excess emission reductions”, also clarify that reductions must be “at least” equal to those specified.
• Reporting/Section 4:
  • Added language regarding prioritizing coordination with impacted communities (4.b (1)), including “or perpetuation of” impacts, as well as “recommendations made by the sustainable economy advisory council”
  • Added requirement to “identify issues and opportunities raised through tribal consultation”
• Authority/Section 6
  • Definitions: 1) Remove excess emission reduction credit; 2) expand source definition to include imported electricity and fuels.
  • Moved up timeline by 1.5 years for petition for EIB rulemaking from June 2025 to Jan 1, 2024
  • Requires soliciting input from sustainable economy task force and via tribal consultation in developing petition.
  • Same fixes to targets as listed above.
  • Added that EIB shall consider “technical availability and feasibility” and “cost-effectiveness” when setting standards, limits, and requirements to hit targets.
  • Added “any” in 6.D (3) (d) to clarify that development of those protocols are not mandated.
  • Added language such that fees paid may be used to “enforce” regulations, not just administer them.

From YUCCA

The good news: 2 out of our 4 demands were addressed with amendments. 

1. tribal consultation was added explicitly!!!!
2. The time line for rulemaking was also moved up by a year and a half!!! 

Unfortunately there are issues that remain unaddressed.

 YUCCA’S bottom lines: 

• Indigenous Values and Principles – the commodification of what is sacred like air, water, and land doesn’t align with the values of Indigenous people. 
• We don’t want any offsetting schemes in New Mexico.
  • We remain in solidarity with Indigenous people internationally who do not want carbon offsetting schemes. 
• Where do Indigenous people fit into the global market?
  • Tribal consultation is already an issue because it isn’t done meaningfully so what would it look like once we open NM up to another global market?  
• Carbon Markets have not worked – an example that would be applicable for here would be agricultural offsets.
• A sample of studies showing the ineffectiveness of carbon offsets.
• There is already no accountability for oil and gas now.
  • There are only 3 inspectors for 65,000 oil wells. 
  • 4 discharges per day of waste into waterways. 
• How can we codify into law without knowing if there is any benefits to the scheme because there are not existing standards or even a framework? 
• Downstream emissions – we believe that adding downstream emissions tracking and reporting for oil and gas extraction is essential since that is a huge contributor to our overall global impact on climate and should be factored into climate policy decision-making. 

Retake Weighs In

We want to thank Sierra Club and YUCCA for sharing their analyses of the HB 6 bill substitute. We agree with both groups that some important progress has been made. That progress should be acknowledged in emails, calls and public comment. We now support this bill, but we request that the following amendments are added:

• We concur with YUCCA that all reference to carbon sequestration and offsets must be removed. Together, they allow the state and the fossil fuel industry to misrepresent emission progress with what we view as fanciful accounting tricks that assume carbon sequestration technology will work, which has not been demonstrated anywhere in the US despite billions invested and stranded assets as the only outcome.
• We also feel the bill should require reporting on downstream Greenhouse Gas (GHG) emissions resulting from NM gas and oil exports. We feel if this were honestly reported, it would better inform policymakers about the implications and consequences of unfettered extraction.
• We are worried that there is inadequate inspector staffing to monitor reporting and enforce compliance with stated goals.
• Finally, while not seeing how this could be included as an amendment, we share YUCCA’s concern that the whole HB 6 framework exposes a deep philosophical divide between bill sponsors and indigenous peoples. Sponsors and bill supporters are working to commodify natural resources, something antithetical to indigenous values. Our air is a relative, not a byproduct or commodity that can be traded and offset. We worry that while indigenous consultation is now included in the substitute bill, it is hard to envision meaningful consultation where the two sides embrace diametrically opposed perspective, values, and priorities.

In closing, while we want to acknowledge the efforts on the part of sponsors, and we now cautiously support the bill, we feel that the concerns raise by YUCCA and reflected in our summary need to be addressed.

We encourage you to use our analysis and that of YUCCA and Sierra Club to inform your public comment and letters to members of House Government, Elections, and Indian Affairs.

In solidarity & hope,

Paul & Roxanne

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