Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR Ortez
LAST UPDATED
ORIGINAL DATE 02/20/25
SHORT TITLE
Efficiency & Mercury Standards For
Products
BILL
NUMBER House Bill 409
ANALYST Graeser
REVENUE*
(dollars in thousands)
Type FY25 FY26 FY27 FY28 FY29
Recurring or
Nonrecurring
Fund
Affected
Fines $0 $0
Indeterminate
but minimal gain
Indeterminate but
minimal gain
Indeterminate
but minimal gain
Recurring
Current School/
General Fund
Parentheses ( ) indicate revenue decreases.
*Amounts reflect the most recent analysis of this legislation.
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 FY26 FY27
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected
EMNRD Up to $100.0 Up to $350.0 Up to $300.0 Up to $750.0 Recurring General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect the most recent analysis of this legislation.
Sources of Information
LFC Files
Agency Analysis Received From
New Mexico Attorney General (NMAG) Energy, Minerals and Natural Resources Department (EMNRD)
Department of Health (DOH)
Agency Analysis was Solicited but Not Received From
New Mexico Environment Department (NMED)
SUMMARY
Synopsis of House Bill 409
House Bill 409 (HB409) proposes to enact the Efficiency and Mercury Standards for Products
and Lighting Fixtures Act and requires the Energy, Minerals and Natural Resources Department
(EMNRD) to adopt rules to prohibit the sale, offering for sale, lease, or rent of certain products
and appliances unless they meet energy or water efficiency standards set by EMNRD. The bill
also requires EMNRD to adopt provisions for the testing, certification and labelling of these
products. Additionally, HB409 requires EMRND to adopt rules prohibiting the sale of general-
purpose compact fluorescent lamps and general-purpose linear fluorescent lamps. Such rules
must “be in alignment” with similar prohibitions adopted in other states.
House Bill 409 – Page 2
The new standards promulgated by EMNRD will apply to new products sold or leased in New
Mexico. The standards would not apply to:
1) Products manufactured in New Mexico and sold outside New Mexico;
2) Products manufactured outside New Mexico and sold at wholesale inside New Mexico
for final retail sale and installation outside New Mexico;
3) Products installed in mobile homes at the time of construction; or
4) Products designed expressly for installation and use in recreational vehicles.
Before July 1, 2025, EMNRD is required to promulgate rules to implement the provisions of
HB409. On and after January 1, 2027, all products for sale must meet or exceed the standards.
On and after January 1, 2028, all products installed must meet or exceed the standards.
Finally, HB409 sets the penalties for violating the Act:
1) First violation: warning issued by the EMNRD.
2) Second violation: civil penalty up to $100
3) Third and subsequent violations: civil penalty up to $250.
Each covered product sold in violation of the act is a separate violation, and that each violation
may constitute a separate offense and each day that such violation occurs may constitute a
separate offense.
This bill does not contain an effective date and, as a result, would go into effect 90 days after the
Legislature adjourns, or June 20, 2025, if enacted.
FISCAL IMPLICATIONS
The administrative/fiscal implications for EMNRD would be significant. EMNRD would be
required to establish energy and water efficiency standards. This requires research, outreach and
rulemaking. HB409 would also entail establishing a new regulatory framework, which would
require staff, monitoring, tracking, and compliance. EMRND would also be responsible for
regularly updating these standards and the regulatory framework as new products are launched
and pricing mechanisms change.
EMNRD would need to develop an enforcement program, including hiring staff who would
conduct periodic inspections and issue notices of violation, an electronic infrastructure for
accepting reports of violations, development of compliance materials, and undertaking
educational outreach to targeted suppliers. EMNRD does not currently have the staffing or
expertise to implement such a program. This will require initial IT support to build the website
and tracking tools and 2 to 3 permanent FTEs.
SIGNIFICANT ISSUES
EMNRD is charged with the duty of regulating and enforcing the provisions of the act. EMNRD
points out encouraging energy efficiency is well with the mission of the department.
National appliance standards save the typical U.S. household about $320/year on energy
bills. In addition to huge energy bill savings, the typical new refrigerator uses one-quarter the
energy than its equivalent from 1973—despite offering 20 percent more storage capacity and
being available at half the retail cost. Since 1990, additional efficiency gains in household House Bill 409 – Page 3
appliances include:
New clothes washers use 75 percent less energy;
New dishwashers use more than 53 percent less energy;
New air conditioners use about 50 percent less energy; and
New furnaces use about 10 percent less energy.
According to the U.S. Environmental Protection Agency (EPA), in addition to saving energy and
saving customers money, appliance and equipment standards help reduce greenhouse gas
emissions and other air pollution.
States have historically led the nation in the development of new efficiency standards, with
nineteen states currently applying at least one standard.
1
Issues for EMNRD to contemplate while it establishes this new enforcement program include:
Addressing online purchases, including purchases from overseas;
Impacts to retailers in New Mexico;
Analysis of the upfront costs of certain products compared to lifetime savings
(including recommendations for incentives to ease any burdensome upfront costs).
Health impacts;
Impacts to the electrical grid (including adopting “smart” and “connected” products
wherever feasible, to unlock further savings on utility bills);
Clarifying whether the act applies to residential products, commercial products,
industrial or all three;
Defining “general purpose” and/or contemplating exceptions in the case of the film
industry, theater and arts, and other special lighting situations such as jails or
operating rooms where fluorescents may be the only acceptable product;
Defining “computer server power supply units” to protect operations of the high-
performance supercomputer at national labs and military bases and of in-state data
centers, where appropriate; and
When and how to regularly update standards.
The Attorney General (NMAG) warns of possible issues in implementing the provisions of
HB409:
Possible Federal Preemption
Some of the standards contemplated by the bill may be preempted by federal law, though
further analysis would be needed to determine which, if any, standards are preempted. As
summarized on the U.S. DOE’s website, “Congress has mandated through various statutes
that the DOE is to implement energy conservation standards and test procedures for
residential products and commercial and industrial equipment. DOE has published
regulations in the Code of Federal Regulations for more than seventy categories of appliance
and equipment types.”
https://www.energy.gov/eere/buildings/statutory-rules-and-authorities . A list of
consumer products covered by 42 U.S.C. § 6292 is included in the agency analysis. DOE is
also authorized to classify any other type of consumer products or industrial equipment as
covered. 42 U.S.C. § 292 (a)(20); 42 U.S.C. § 6311 (1)(L).
1
State Standards | ASAP Appliance Standard Awareness Project House Bill 409 – Page 4
State laws, including testing and labeling requirements, concerning energy efficiency, energy
use, or water use of products covered by federal standards are preempted and therefore not
effective, subject to certain exceptions. See 42 U.S.C. § 6297(a)-(c). One exception is a rule
for which a waiver has been granted to the state. 42 U.S.C. § 6297(c)(2). The process and
criteria for obtaining a waiver are set out in 42 U.S.C. § 6297(d).
In general, the categories of products that would be subject to standards under HB409 do not
appear to overlap with categories for which DOE is mandated to adopt standards and
therefore may not be preempted. However, there is some overlap, for example showerheads,
water closets, and urinals. Standards for these categories would appear to be federally
preempted unless a waiver is obtained. The categories of “commercial” products do not
appear to overlap and be preempted by any standards that DOE is statutorily mandated to
issue standards under 42 U.S.C. § 6311. However, more research would be needed to ensure
any equipment classified as “commercial” under HB409 has not been addressed by DOE
standards for “industrial” equipment. In addition, if EMNRD establishes standards for
products not listed in the Act, as authorized by Section 4, those standards would be
preempted if they cover products subject to DOE standards.
Possible Constitutional Issues under the Interstate Commerce Clause
The “dormant” Commerce Clause is the negative implication of the Commerce Clause: states
may not enact laws that discriminate against or unduly burden interstate commerce.” HW
Premium CBD, LLC v. Reynolds, 742 F. Supp. 3d 885, 904 (S.D. Iowa 2024). Section
3(B)(1) & (2) of the bill provide exemptions for products manufactured in New Mexico but
sold outside the state. While this is different from a typical protectionist act that seeks to keep
products manufactured outside of the state from being imported, it may raise dormant
commerce clause concerns. An argument could be made these provisions are discriminatory
because they allow New Mexico manufacturers to export products that New Mexico deems
unsuitable for sale within the state to another state, while denying a manufacturer in that state
the reciprocal right to import such products into New Mexico. Moreover, because the
regulations contemplated by the Act regulate sales, not manufacturing, it is not clear that
such exemptions are necessary.
The Department of Health also identifies significant issues:
HB409 would lead New Mexico to join at least nine other states, including Vermont,
California, Colorado, and Washington in enacting state regulations or bans of fluorescent and
mercury vapor lamps, as well as regulate the selling of other fixtures and products that are
energy inefficient:
• Colorado requires appliances meet or exceed a set of efficiency standards; establishes
the phase-out of the sale of fluorescent light bulbs that contain mercury.
• Vermont prohibits sale of mercury-containing fluorescent lightbulbs.
2
• Washington State phased-out sale of mercury-containing lighting products and House
Bill 1619 updated existing appliance standards. This is estimated to save consumers
and businesses $2 billion in energy and water costs.
3
• Hawaii phased-out of fluorescent light bulb sales and creatws efficiency standards for
energy and water efficiency for a set of appliances sold in the state.
4
2
https://dec.vermont.gov/news/new-vermont-fluorescent-lightbulb-restrictions-begin-2024
3
Appliance Standards – Washington State Department of Commerce
4
Bill Text: HI HB192 | 2023 | Regular Session | Amended | LegiScan and Hawaii-2023-SB691-Amended House Bill 409 – Page 5
LED bulbs are mercury-free and have a longer lifespan than fluorescent lights. Transitioning
to LED lights would bring residents and businesses significant savings in their utility bills
and reduce energy consumption. Regulating the sale of light fixtures and other products
containing mercury will reduce the amount of improperly disposed-of mercury that can lead
to environmental contamination, which can negatively impact human health if a person is
exposed to mercury through water, soil, or air.
All residents of New Mexico would be served by this bill. However, very young children and
fetuses are at greater risk of negative health outcomes due to exposure to mercury according
to the World Health Organization. This is due to the early stage of development of the central
nervous system in children, and their smaller body size being disproportionately affected by
any dose of exposure. Even small amounts of mercury exposure can lead to nervous,
digestive, and immune system damage. This bill would decrease the risk of exposure to
mercury for all New Mexicans, which would positively benefit those at greater risk of organ
development damage from mercury exposure.
In the United States, recycling rates of fluorescent lamps are reported as 23 percent.
5
While
these products often contain small amounts of mercury, exposure can occur if the product is
accidentally broken during installation, use, transportation, storage, recycling, or disposal,
which can easily occur. Removal of mercury from products removes the risk of exposure to
this heavy metal. Improper disposal of these products can lead to mercury contamination of
water, soil, and the air, threatening human health. This bill would lead to a decrease in risk of
mercury exposure to New Mexico residents.
ADMINISTRATIVE IMPLICATIONS
EMNRD points out significant impacts to rule, implement and enforce the provisions of HB409.
LFC staff have attempted to translate the needs into operating budget terms in Table 2.
In addition, EMNRD will need to broaden its in-house expertise from electrical appliances to
include water usage and commercial kitchens.
LG/hj/SD/Sl2
5
2022: Fluorescent lamps: A review on environmental concerns and current recycling perspectives highlighting Hg
and rare earth elements – ScienceDirect