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HOUSE BILL 581
57
TH LEGISLATURE
-
STATE
OF
NEW
MEXICO
-
FIRST SESSION
,
2025
INTRODUCED BY
Patricia Roybal Caballero
AN ACT
RELATING TO THE ENVIRONMENT; REQUIRING THE DEPARTMENT OF
ENVIRONMENT AND LOCAL AGENCIES TO COMPLETE ALL INSPECTIONS ON
EXISTING SOURCES OWNED OR OPERATED BY PERMIT APPLICANTS BEFORE
THE ISSUANCE OF OPERATING OR CONSTRUCTION PERMITS FOR NEW OR
MODIFIED SOURCES TO SUCH APPLICANTS; ESTABLISHING A PERIODIC
INSPECTION PROGRAM IN 2025 THAT SHALL USE THE BEST AVAILABLE
TECHNOLOGY; REQUIRING THE DEPARTMENT AND LOCAL AGENCIES TO
INCREASE PERMITTING FEES TO IMPLEMENT THE INSPECTION PROGRAM;
REQUIRING THE DEPARTMENT TO REPORT TO THE LEGISLATURE IN 2026
AND 2027 REGARDING THE INSPECTION PROGRAM.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 74-2-7 NMSA 1978 (being Laws 1972,
Chapter 51, Section 4, as amended) is amended to read:
"74-2-7. PERMITS--PERMIT APPEALS TO THE ENVIRONMENTAL
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IMPROVEMENT BOARD OR THE LOCAL BOARD--PERMIT FEES.--
A. By regulation, the environmental improvement
board or the local board shall require:
(1) a person intending to construct or modify
any source, except as otherwise specifically provided by
regulation, to obtain a construction permit from the department
or the local agency prior to such construction or modification;
and
(2) a person intending to operate any source
for which an operating permit is required by the 1990
amendments to the federal act, except as otherwise specifically
provided by regulation, to obtain an operating permit from the
department or the local agency.
B. Regulations adopted by the environmental
improvement board or the local board shall include at least the
following provisions:
(1) requirements for the submission of
relevant information, including information the department or
the local agency deems necessary to determine that regulations
and standards under the Air Quality Control Act, [or ] the Oil
and Gas Act specifically relating to the venting and flaring of
natural gas by oil and gas facilities and the federal act,
including all amendments , will not be violated through minimum
mandatory documentation and procedures and that:
(a) applications for construction and
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operating permits shall include certified or otherwise verified
proof of compliance issued by the department, the local agency
or other authorized government department or agency
establishing that each of the other facilities owned or
operated by the applicant and subject to these state and
federal laws are in compliance with all state and federal
emission standards during the current inspection period and all
prior inspection periods, where such proof of compliance shall
be a condition precedent to the application;
(b) if an applicant is unable to produce
acceptable proof of compliance with the applicant's
application, the department or local agency shall inspect all
of the applicant's facilities within six months of the
submission of the application; and
(c) the department or local agency shall
notify the applicant of the results of all inspections
conducted pursuant to the provisions of this subsection and, if
the department or local agency determines that the sources are
in compliance with the applicable state and federal laws and
emission standards and the department or local agency
determines that the application is otherwise complete, the
department or local agency shall proceed with evaluating the
application for the new source; if the department or local
agency determines that the sources are not in compliance with
the applicable state and federal laws and standards, the
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department or local agency shall issue a final action pursuant
to Subsection G of this section denying the permit application
for the new source;
(2) specification of the deadlines for
processing permit applications; provided that the deadline for
a final decision by the department or the local agency on a
construction permit application may not exceed:
(a) ninety days after the application is
determined to be administratively complete, if the application
is not subject to requirements for prevention of significant
deterioration, unless the secretary or the director grants an
extension not to exceed ninety days for good cause, including
the need to have public hearings and, if the applicant has
failed to produce proof of compliance of each of the
applicant's facilities not subject to the prevention
requirements, the secretary or the director shall deem such
event as good cause for an additional extension of six months ;
or
(b) one hundred eighty days after the
application is determined to be administratively complete, if
the application is subject to requirements for prevention of
significant deterioration, unless the secretary or the director
grants an extension not to exceed ninety days for good cause,
including the need to have public hearings and, if the
applicant has failed to produce proof of compliance of each of
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the applicant's facilities subject to the prevention
requirements, the secretary or director shall deem the event as
good cause for an additional extension of six months ;
(3) that if the department or local agency
fails to take final action on a construction permit application
within the deadlines specified in Paragraph (2) of this
subsection, the department or local agency shall notify the
applicant in writing that an extension of time is required to
process the application and specify in detail the grounds for
the extension;
(4) a description of elements required before
the department or local agency shall deem an application
administratively complete and where such elements shall include
as a condition precedent the proof of compliance issued by the
department, the local agency or other authorized government
department or agency as described in this subsection ;
(5) specification of the public notice,
comment period and public hearing, if any, required prior to
the issuance of a permit; provided that the permit regulations
adopted:
(a) by the environmental improvement
board shall include provisions governing notice to nearby
states; and
(b) by any local board shall include
provisions requiring that notice be given to the department of
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all permit applications by any source that emits, or has a
potential emission rate of, one hundred tons per year or more
of any regulated air contaminant, including any source of
fugitive emissions of each regulated air contaminant, at least
sixty days prior to the date on which construction or major
modification is to commence;
(6) a schedule of construction permit fees
sufficient to cover the reasonable costs of:
(a) reviewing and acting upon any
application for such permit; and
(b) implementing and enforcing the terms
and conditions of the permit, including the costs of the
periodic inspection program required by Section 74-2-13 NMSA
1978, but excluding any court costs or other costs associated
with an enforcement action;
(7) a schedule of emission fees consistent
with the provisions of Section 502(b)(3) of the 1990 amendments
to the federal act;
(8) a method for accelerated permit processing
that may be requested at the sole discretion of the applicant
[at the time the applicant submits a construction permit
application] if and only if the applicant has first submitted a
proof of compliance that has been subsequently accepted by the
department or local agency as true and that:
(a) allows the department or local
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agency to contract with qualified outside firms to assist the
department or local agency in its accelerated review of the
construction permit application; provided that the department
or local agency can contract with a qualified firm that does
not have a conflict of interest; and
(b) establishes a process for the
department or local agency to account for the expenditure of
the accelerated permit processing fees;
(9) allowance for additional permit
application fees, sufficient to cover the reasonable costs of
an accelerated permit application review process that is
applicable only to applicants who have first submitted proof of
compliance that has been subsequently accepted as true as
described in this subsection . Before the applicant is notified
that the permit application has been determined to be complete,
the department or local agency shall give the applicant a
reasonable estimate of costs of an accelerated permit
application review process;
(10) specification of the maximum length of
time for which a permit shall be valid; provided that for an
operating permit such period may not exceed five years; and
(11) for an operating permit only:
(a) provisions consistent with Sections
502(b) and 505(b) of the federal act providing: 1) notice to
and review and comment by the United States environmental
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protection agency; and 2) that if the department or local
agency receives notice of objection from the United States
environmental protection agency before the operating permit is
issued, the department or the local agency shall not issue the
permit unless it is revised and issued under Section 505(c) of
the federal act;
(b) provisions governing renewal of the
operating permit; and
(c) specification of the conditions
under which the operating permit may be terminated, modified or
revoked and reissued prior to the expiration of the term of the
operating permit.
C. Except as provided in Subsection O of this
section, the department or the local agency may deny any
application for:
(1) a construction permit if it appears that
the construction or modification:
(a) will not meet applicable standards,
rules or requirements of the Air Quality Control Act, the Oil
and Gas Act specifically relating to regulations of the venting
and flaring of natural gas by oil and gas facilities or the
federal act;
(b) will cause or contribute to air
contaminant levels in excess of a national or state standard
or, within the boundaries of a local authority, applicable
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local ambient air quality standards; or
(c) will violate any other provision of
the Air Quality Control Act, the Oil and Gas Act specifically
relating to regulations of the venting and flaring of natural
gas by oil and gas facilities or the federal act; and
(2) an operating permit if the source will not
meet the applicable standards, rules or requirements pursuant
to the Air Quality Control Act, the Oil and Gas Act
specifically relating to regulations of the venting and flaring
of natural gas by oil and gas facilities or the federal act.
D. The department or the local agency may specify
conditions to any permit granted under this section, including:
(1) for a construction permit:
(a) a requirement that such source
install and operate control technology, determined on a case-
by-case basis, sufficient to meet the standards, rules and
requirements of the Air Quality Control Act, the Oil and Gas
Act specifically relating to regulations of the venting and
flaring of natural gas by oil and gas facilities and the
federal act;
(b) individual emission limits,
determined on a case-by-case basis, but only as restrictive as
necessary to meet the requirements of the Air Quality Control
Act, the Oil and Gas Act specifically relating to regulations
of the venting and flaring of natural gas by oil and gas
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facilities and the federal act or the emission rate specified
in the permit application, whichever is more stringent;
(c) compliance with applicable federal
standards of performance;
(d) reasonable restrictions and
limitations not relating to emission limits or emission rates;
or
(e) any combination of the conditions
listed in this paragraph; provided that the combination results
in the most stringent level of performance that is the most
protective of health and safety ; and
(2) for an operating permit, terms and
conditions sufficient to ensure compliance with the applicable
standards, rules and requirements pursuant to the Air Quality
Control Act, the Oil and Gas Act specifically relating to
regulations of the venting and flaring of natural gas by oil
and gas facilities and the federal act.
E. This section does not authorize the department
or the local agency to require the use of machinery, devices or
equipment from a particular manufacturer if the federal
standards of performance, state regulations and permit
conditions may be met by machinery, devices or equipment
otherwise available.
F. The issuance of a permit does not relieve any
person from the responsibility of complying with the provisions
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of the Air Quality Control Act, the applicable portions of the
Oil and Gas Act and any applicable regulations of the
environmental improvement board or the local board. Any
conditions placed upon a permit by the department or the local
agency shall be enforceable to the same extent as a regulation
of its board.
G. A person who participated in a permitting action
before the department or the local agency shall be notified by
the department or the local agency of the final action taken
and the reasons for the final action. Notification of the
applicant shall be by certified mail.
H. A person who participated in a permitting action
before the department or the local agency and who is adversely
affected by such permitting action may file a petition for
hearing before the environmental improvement board or the local
board upon receipt of the final action of the department or the
local agency. The petition shall be made in writing to the
environmental improvement board or the local board within
thirty days from the date notice is given of the department's
or the local agency's action. Unless a timely petition for
hearing is made, the decision of the department or the local
agency shall be final.
I. If a timely petition for hearing is made, the
environmental improvement board or the local board shall hold a
hearing within sixty days after receipt of the petition. The
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environmental improvement board or the local board shall notify
the petitioner and the applicant or permittee, if other than
the petitioner, by certified mail of the date, time and place
of the hearing. If the subject of the petition is a permitting
action deemed by the environmental improvement board or the
local board to substantially affect the public interest, the
environmental improvement board or the local board shall ensure
that the public receives notice of the date, time and place of
the hearing. The public in such circumstances shall also be
given a reasonable opportunity to submit data, views or
arguments orally or in writing and to examine witnesses
testifying at the hearing. Any person submitting data, views
or arguments orally or in writing shall be subject to
examination at the hearing.
J. The environmental improvement board or the local
board may designate a hearing officer to take evidence in the
hearing. All hearings shall be recorded.
K. The burden of proof shall be upon the
petitioner. Based upon the evidence presented at the hearing,
the environmental improvement board or the local board shall
sustain, modify or reverse the action of the department or the
local agency respectively.
L. Notwithstanding any other provision of law and
subject to the provisions of Section 74-2-4 NMSA 1978, a final
decision on a permit by the department, the environmental
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improvement board, the local agency, the local board or the
court of appeals that a source will or will not meet applicable
local, state and federal air pollution standards and
regulations shall be conclusive and is binding on every other
state agency and as an issue before any other state agency
shall be deemed resolved in accordance with that final
decision.
M. Subject to the provisions of Section 74-2-4 NMSA
1978, if the local board has adopted a permit regulation
pursuant to this section, persons constructing or modifying any
source within the boundaries of the local authority shall
obtain a permit from the local agency and not from the
department.
N. Fees collected pursuant to this section shall be
deposited in:
(1) the state air quality permit fund created
by Section 74-2-15 NMSA 1978 if collected by the department; or
(2) a fund created pursuant to Section 74-2-16
NMSA 1978 if collected by a local agency pursuant to a permit
regulation adopted by the local board pursuant to this section.
O. The department may not deny an application for a
construction permit for a cotton gin if the applicant proposes
use of the best system of emissions reduction currently in use
by cotton gins in the United States, as specified by regulation
of the environmental improvement board, and the cotton gin has
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a potential emission rate, considering the use of the proposed
emissions reduction system and the proposed hours of operation,
of not more than fifty tons per year of any regulated air
contaminant for which there is a national ambient air quality
standard. The construction permit shall require that the
applicant use the proposed emission reduction system and limit
the hours of operation to the hours specified in the
application. For purposes of this subsection, "best system of
emissions reduction" for cotton gins means a system that will
result in emissions reduction equal to or greater than that
obtained by the use of condenser screens, seventy-mesh screen
or equivalent on low-pressure exhausts and high-efficiency
cyclone dust collectors on high-pressure exhausts.
P. The department or local agency may deny any
permit application or revoke any permit issued pursuant to the
Air Quality Control Act if, within ten years immediately
preceding the date of submission of the permit application, the
applicant or permittee has:
(1) knowingly misrepresented a material fact
in an application for a permit;
(2) refused to disclose the information
required by the provisions of the Air Quality Control Act;
(3) been convicted in any court of any state
or the United States of:
(a) a felony related to environmental
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crime; or
(b) a crime defined by state or federal
statute as involving or being in restraint of trade, price
fixing, bribery or fraud;
(4) constructed or operated a facility for
which a permit is sought without a permit required by the Air
Quality Control Act, except when such an unpermitted facility
is discovered after acquisition in the course of a timely
environmental audit authorized by department or local board
policy and except if:
(a) the operator of the facility using
good engineering practices and established approved calculation
methodologies estimated that the facility's emissions would not
require a permit pursuant to the Air Quality Control Act; and
(b) upon discovery of the discrepancy
between the calculated pre-construction maximum facility
emissions and the calculated post-construction maximum facility
emissions, the operator of the facility applies for the
appropriate permit within thirty calendar days; or
(5) had any permit revoked or permanently
suspended for cause under the environmental laws of any state
or the United States.
Q. In making a finding under Subsection P of this
section, the department or local agency may consider
aggravating and mitigating factors.
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R. If an applicant or permittee whose permit is
being considered for denial or revocation on any basis provided
by Subsection P of this section has submitted an action plan
that has been approved in writing by the secretary or director,
and plan approval includes a period of operation under a
conditional permit that will allow the applicant or permittee a
reasonable opportunity to demonstrate its rehabilitation, the
secretary or director may issue a conditional permit for a
reasonable period of time.
S. An applicant for a permit pursuant to the Air
Quality Control Act shall file a disclosure statement with the
department or local agency with the information listed in
Subsection P of this section, and on a form developed by the
department. An existing permit holder shall provide such
disclosure upon request by the department or local agency."
SECTION 2. Section 74-2-13 NMSA 1978 (being Laws 1972,
Chapter 51, Section 8, as amended) is repealed and a new
Section 74-2-13 NMSA 1978 is enacted to read:
"74-2-13. [NEW MATERIAL ] PERIODIC AND OTHER
INSPECTIONS.--
A. The department, through a joint powers agreement
with the energy, minerals and natural resources department and
local agencies, shall establish a periodic inspection program
through regulations that shall be effective no later than
November 2025 that shall require that inspections:
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(1) occur without prior notice every two years
at all sources within their respective boundaries that hold
construction or operating permits;
(2) determine whether the sources inspected
are in compliance with the Air Quality Control Act, the Oil and
Gas Act as it relates to all regulations of venting and flaring
of oil and gas facilities and the federal act;
(3) be completed onsite with use of the best
available technology, including EXOatmospheric measurements
generated by methaneSAT; and
(4) be funded by permitting fees paid by the
owners or operators of permitted sources, the costs to be
allocated in an equitable manner to be determined by the
secretary and the director and approved by the board or local
board.
B. The department and a local agency shall notify
the owners and operators of the inspected sources of the
results of these periodic inspections within thirty days of
their completion, and the notification shall include either a
proof of compliance or, as applicable, a remediation plan, a
plan for follow-up inspections and an assessment of all
resulting penalties or conditional penalties.
C. The department shall report to the legislature
in 2026 and 2027 regarding the status of the periodic
inspection program, to include, at a minimum:
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(1) the number of sources inspected during the
reporting period;
(2) the schedule for the completion of the
inspections of all sources;
(3) the number of sources that are in
noncompliance with the applicable standards under state and
federal laws and regulations but expressly to include the
methane emission standards of the Oil and Gas Act and Section
136 of the federal act; and
(4) a summary of the remediation plans imposed
and the penalties assessed.
D. The secretary or the director or an authorized
representative of either, upon presentation of the appropriate
credentials:
(1) shall have a right of entry to, upon or
through all premises on which an emission source is located or
on which all records required to be maintained by regulations
of the environmental improvement board, the local board or by a
permit condition are located to conduct the periodic
inspections described in this section; and
(2) may at all reasonable times have access to
the premises to copy all records required to be established and
maintained by regulations of the environmental improvement
board or the local board or a permit condition; to inspect all
monitoring equipment and method required by regulations of the
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environmental improvement board, the local board or by a permit
condition; and to sample any emissions that are required to be
sampled pursuant to regulation of the environmental improvement
board, the local board or a permit condition."
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