This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
The New Mexico Taxation and Revenue Department conducted an audit of Meridian Oil, Inc.'s operations, which included confidential and proprietary business information. Following the audit, Cinco General Partnership, a non-affiliated owner of working interests in one of the audited properties, requested access to the audit report under the Inspection of Public Records Act. Meridian objected, arguing that the release of the report would violate statutory confidentiality provisions under the Tax Administration Act (paras 2-5).
Procedural History
- Hearing Officer, New Mexico Taxation and Revenue Department: Denied Meridian's protest and upheld the Department's decision to release the audit report to Cinco (para 5).
Parties' Submissions
- Appellant (Meridian Oil, Inc.): Argued that the release of the audit report, which contained proprietary and contractual information, violated Section 7-1-8(U)(2) of the Tax Administration Act, which prohibits disclosure of such information without consent (paras 5, 10).
- Respondent (New Mexico Taxation and Revenue Department): Contended that Section 7-1-8(U)(3) allowed the release of audit workpapers, including proprietary information, to parties with a legal interest in the audited property, such as Cinco (paras 5, 10).
Legal Issues
- Does Section 7-1-8(U)(3) of the Tax Administration Act permit the release of audit workpapers containing proprietary and contractual information, despite the restrictions in Section 7-1-8(U)(2)? (paras 10-11).
Disposition
- The Court of Appeals reversed the hearing officer's decision, holding that the release of the audit report to Cinco was barred under Section 7-1-8(U)(2) (para 22).
Reasons
Per Apodaca CJ (Donnelly and Bosson JJ. concurring):
Statutory Interpretation: The Court analyzed the text and structure of Section 7-1-8(U) and concluded that subsections (U)(2) and (U)(3) are independent exceptions to the general rule of disclosure, rather than (U)(3) being an exception to (U)(2). The absence of conditional language linking the two subsections supports this interpretation (paras 10-14).
Utility of Subsection (U)(3): The Court rejected the argument that (U)(3) would be meaningless unless it allowed disclosure of contractual information. It found that audit workpapers could contain non-contractual information that could be disclosed under (U)(3) without violating (U)(2) (paras 15-17).
Legislative Intent: The Court considered the historical background and legislative purpose of the 1993 amendments to Section 7-1-8(U). It determined that the legislature intended to protect proprietary and contractual information to encourage taxpayer cooperation during audits, particularly in the oil and gas industry, which is vital to New Mexico's revenue (paras 18-21).
Conclusion: Since the audit report was based entirely on contractual information, its release was barred under Section 7-1-8(U)(2). The Court reversed the hearing officer's decision and awarded costs to Meridian (para 22).