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SENATE BILL 4
57TH LEGISLATURE - STATE OF NEW MEXICO - FIRST SESSION, 2025
INTRODUCED BY
Mimi Stewart
AN ACT
RELATING TO THE ENVIRONMENT; ESTABLISHING STATEWIDE GREENHOUSE
GAS EMISSIONS LIMITS; REQUIRING GREENHOUSE GAS EMISSIONS
REPORTING; PROVIDING THAT STATE AGENCIES APPLY CLIMATE EQUITY
PRINCIPLES TO POLICY AND RULE DEVELOPMENT; EXPANDING DUTIES AND
POWERS OF THE ENVIRONMENTAL IMPROVEMENT BOARD; MAKING AN
APPROPRIATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 74-1-3 NMSA 1978 (being Laws 1971,
Chapter 277, Section 3, as amended) is amended to read:
"74-1-3. DEFINITIONS.--As used in the Environmental
Improvement Act:
A. "annual greenhouse gas emissions limit" means
the maximum allowable annual quantity of greenhouse gas
emissions to meet the greenhouse gas emissions limits
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established in Subsection A of Section 74-1-19 NMSA 1978;
[A.] B. "board" means the environmental improvement
board;
[B.] C. "carbon intensity" means the quantity of
fuel lifecycle greenhouse gas emissions per unit of fuel
energy, expressed in grams of carbon dioxide equivalent per
megajoule;
[C.] D. "department" [or "environmental improvement
department"] means the department of environment;
[D.] E. "fuel lifecycle" means an assessment of the
aggregate greenhouse gas emissions based on science-based
models or protocols, including direct emissions and significant
indirect emissions from indirect land use change, all stages of
fuel and feedstock production and distribution, feedstock
generation or extraction through the distribution, delivery and
use of the finished fuel by the consumer, including
consideration of storage, transportation and combustion;
F. "greenhouse gas" means gaseous compounds that
absorb infrared radiation emitted from the earth's surface and
trap heat in the earth's atmosphere, including carbon dioxide,
methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons,
nitrogen trifluoride and sulfur hexafluoride, but not including
water vapor;
G. "greenhouse gas decade assessment" means a
greenhouse gas inventory and progress report prepared in the
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year 2031 and every tenth year thereafter;
H. "greenhouse gas inventory and progress report"
means the report prepared and published annually by the
department that includes an inventory of all statewide
greenhouse gas emissions and the progress toward meeting
statewide greenhouse gas reductions;
I. "greenhouse gas sector report" means the report
prepared and published by the department containing a proposed
allocation of the greenhouse gas emissions reductions, by
sector;
[E.] J. "on-site liquid waste system" means a
liquid waste system, or part thereof, serving a dwelling,
establishment or group, and using a liquid waste treatment unit
designed to receive liquid waste followed by either a soil
treatment or other type of disposal system. "On-site liquid
waste system" includes holding tanks and privies but does not
include systems or facilities designed to receive or treat mine
or mill tailings or wastes;
K. "overburdened community" means the minority,
low-income, tribal and indigenous populations or communities
that potentially experience disproportionate environmental
harms and risks as a result of greater vulnerability to
environmental hazards;
[F.] L. "person" means the state or [any ] an
agency, institution or political subdivision thereof, [any ] a
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public or private corporation, individual, partnership,
association or other entity and includes [any ] an officer or
governing or managing body of [any ] a political subdivision or
public or private corporation;
[G.] M. "residential on-site liquid waste system"
means an on-site liquid waste system serving up to four
dwelling units;
[H.] N. "secretary" means the secretary of
environment; [and]
O. "statewide greenhouse gas emissions" means the
total net anthropogenic emissions of greenhouse gases,
expressed in carbon dioxide equivalent using a methodology
determined to be appropriate by the department, including
emissions from electricity generation for consumption in New
Mexico, both imported and produced in New Mexico;
transportation fuels and heating fuels combusted in New Mexico;
buildings and structures; residential, commercial,
institutional and industrial waste management; manufacturing
processes; the extraction and processing of raw materials;
production of agricultural and forest products; and oil and gas
exploration, production, storage, distribution and
transportation in the state; and
[I.] P. "transportation fuel" means electricity or
a liquid, gaseous or blended fuel, including gasoline, diesel,
liquefied petroleum gas, natural gas and hydrogen, sold,
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supplied, used or offered for sale to power vehicles or
equipment for the purposes of transportation."
SECTION 2. A new section of the Environmental Improvement
Act, Section 74-1-19 NMSA 1978, is enacted to read:
"74-1-19. [NEW MATERIAL ] GREENHOUSE GAS EMISSIONS
LIMITS--REPORTING REQUIREMENTS.--
A. Statewide greenhouse gas emissions shall be
limited as follows:
(1) by 2030, at least forty-five percent less
than 2005 levels;
(2) by 2040, at least seventy-five percent
less than 2005 levels; and
(3) by 2050 and in every subsequent year, one
hundred percent less than 2005 levels by means developed by the
board.
B. The limits set for 2030 and 2040 shall be
achieved solely through direct greenhouse gas emissions
reductions.
C. The department shall publish:
(1) by July 1, 2026 and by July 1 of each
successive year, in consultation with the energy, minerals and
natural resources department, the department of transportation,
the public regulation commission and other appropriate federal,
state, local and tribal entities, a greenhouse gas inventory
and progress report that includes:
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(a) an inventory of all statewide
greenhouse gas emissions broken down by sector and that reports
on changes from baseline data; and
(b) a progress report that shall, at a
minimum contain: 1) a projection of whether the state will
meet the statewide greenhouse gas emissions limits in
Subsection A of this section; 2) a list of actions that the
state is taking, or is planning to take, to meet the statewide
greenhouse gas emissions limits in Subsection A of this
section; 3) an identification of the actual or expected
implementation date of each action; 4) a quantification and
analysis of the projected greenhouse gas emissions reductions
that each action will achieve; 5) a quantification and
analysis, by sector, of all gaps between the projected
greenhouse gas emissions reductions and the statewide
greenhouse gas emissions limits in Subsection A of this
section; 6) recommendations for legislation that would help
achieve additional greenhouse gas emissions reductions
sufficient to address all such gaps, including an estimate of
the emissions reductions; and 7) a description of the adverse
effects on overburdened communities of state programs to reduce
greenhouse gas emissions and a description of the actions each
state agency has taken to prevent or minimize those adverse
effects; and
(2) by December 31, 2026, in consultation with
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the energy, minerals and natural resources department, a
greenhouse gas sector report containing an allocation by sector
of the greenhouse gas emissions reductions that the department
determines are necessary to achieve, through rulemaking, the
statewide greenhouse gas emissions limits referred to in
Subsection A of this section.
D. The first greenhouse gas inventory and progress
report shall additionally propose each annual greenhouse gas
emissions limit for years 2026 through 2050.
E. When publishing a greenhouse gas inventory and
progress report or greenhouse gas sector report under
Subsection C of this section, the department shall submit the
report to the legislature, post the report on the department's
website and mail the report to tribal governments.
F. If the department determines in the greenhouse
gas decade assessment that the applicable greenhouse gas
emissions limit in this section for the prior year was not
achieved, the department shall identify in the report the
additional actions, including additional rules, needed to meet
the statewide greenhouse gas emissions limits in Subsection A
of this section by the next greenhouse gas decade assessment."
SECTION 3. A new section of the Environmental Improvement
Act is enacted to read:
"[NEW MATERIAL] STATE AGENCIES SHALL APPLY CLIMATE EQUITY
PRINCIPLES.--Except when expressly prohibited by law, a state
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agency shall, to the extent practicable, apply climate equity
principles to rule development that:
A. prioritize greenhouse gas reductions in
overburdened communities;
B. incorporate tribal consultation and outreach to
tribal communities in the rulemaking; and
C. consider how to address adverse health and
environmental impacts from greenhouse gases and other
pollutants."
SECTION 4. Section 74-2-2 NMSA 1978 (being Laws 1967,
Chapter 277, Section 2, as amended) is amended to read:
"74-2-2. DEFINITIONS.--As used in the Air Quality Control
Act:
A. "air contaminant" means a substance, including
any particulate matter, fly ash, dust, fumes, gas, mist, smoke,
vapor, micro-organisms, radioactive material, any combination
thereof or any decay or reaction product thereof;
B. "air pollution" means the emission, except
emission that occurs in nature, into the outdoor atmosphere of
one or more air contaminants in quantities and of a duration
that may with reasonable probability injure human health or
animal or plant life or as may unreasonably interfere with the
public welfare, visibility or the reasonable use of property;
C. "annual greenhouse gas emissions limit" means
the maximum allowable annual quantity of greenhouse gas
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emissions to meet the greenhouse gas emissions limits
established in Subsection A of Section 74-1-19 NMSA 1978;
[C.] D. "department" means the department of
environment;
[D.] E. "director" means the administrative head of
a local agency;
[E.] F. "[emission] emissions limitation" or
"[emission] emissions standard" means a requirement established
by the environmental improvement board or the local board, the
department, the local authority or the local agency or pursuant
to the federal act that limits the quantity, rate or
concentration, or combination thereof, of emissions of air
contaminants on a continuous basis, including any requirements
relating to the operation or maintenance of a source to assure
continuous reduction;
[F.] G. "federal act" means the federal Clean Air
Act, its subsequent amendments and successor provisions;
[G.] H. "federal standard of performance" means a
standard of performance, emission limitation or emission
standard adopted pursuant to 42 U.S.C. Section 7411 or 7412;
I. "greenhouse gas" means gaseous compounds that
absorb infrared radiation emitted from the earth's surface and
trap heat in the earth's atmosphere, including carbon dioxide,
methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons,
nitrogen trifluoride and sulfur hexafluoride, but not including
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water vapor;
J. "greenhouse gas direct measurement" means
regional, local, stationary source or air pollution source
monitoring of greenhouse gas emissions used to quantify the
amount of greenhouse gases emitted;
K. "greenhouse gas inventory and progress report"
means the report prepared and published annually by the
department pursuant to Subsection C of Section 74-1-19 NMSA
1978;
L. "greenhouse gas monitoring requirements" means
requirements that establish statewide greenhouse gas emissions
monitoring and measurement protocols that report emissions in
carbon dioxide equivalents, including requirements for
greenhouse gas direct measurement, recordkeeping, reporting and
verification;
M. "greenhouse gas sector report" means the report
prepared and published by the department containing a proposed
allocation of the greenhouse gas emissions reductions, by
sector;
[H.] N. "hazardous air pollutant" means an air
contaminant that has been listed as a hazardous air pollutant
pursuant to the federal act;
[I.] O. "local agency" means the administrative
agency established by a local authority pursuant to Paragraph
(2) of Subsection A of Section 74-2-4 NMSA 1978;
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[J.] P. "local authority" means any of the
following political subdivisions of the state that have, by
following the procedure set forth in Subsection A of Section
74-2-4 NMSA 1978, assumed jurisdiction for local administration
and enforcement of the Air Quality Control Act:
(1) a county that was a class A county as of
January 1, 1980; or
(2) a municipality with a population greater
than one hundred thousand located within a county that was a
class A county as of January 1, 1980;
[K.] Q. "local board" means a municipal, county or
joint air quality control board created by a local authority;
[L.] R. "mandatory class I area" means any of the
following areas in this state that were in existence on August
7, 1977:
(1) national wilderness areas that exceed five
thousand acres in size; and
(2) national parks that exceed six thousand
acres in size;
S. "methane emissions intensity" means the volume
of methane emissions from oil and gas exploration and
production operations as a percentage of the volume of the
total gas marketed, or for oil production sites reporting no
gas production, the intensity calculation shall use ten metric
tons of methane per million barrels of oil sent to sale;
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[M.] T. "modification" means a physical change in,
or change in the method of operation of, a source that results
in an increase in the potential emission rate of a regulated
air contaminant emitted by the source or that results in the
emission of a regulated air contaminant not previously emitted,
but does not include:
(1) a change in ownership of the source;
(2) routine maintenance, repair or
replacement;
(3) installation of air pollution control
equipment, and all related process equipment and materials
necessary for its operation, undertaken for the purpose of
complying with regulations adopted by the environmental
improvement board or the local board or pursuant to the federal
act; or
(4) unless previously limited by enforceable
permit conditions:
(a) an increase in the production rate,
if such increase does not exceed the operating design capacity
of the source;
(b) an increase in the hours of
operation; or
(c) use of an alternative fuel or raw
material if, prior to January 6, 1975, the source was capable
of accommodating such fuel or raw material or if use of an
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alternate fuel or raw material is caused by a natural gas
curtailment or emergency allocation or [an other ] another lack
of supply of natural gas;
[N.] U. "nonattainment area" means for an air
contaminant an area that is designated "nonattainment" with
respect to that contaminant within the meaning of Section
107(d) of the federal act;
V. "overburdened community" means the minority,
low-income, tribal and indigenous populations or communities
that potentially experience disproportionate environmental
harms and risks as a result of greater vulnerability to
environmental hazards;
[O.] W. "person" includes an individual,
partnership, corporation, association, the state or political
subdivision of the state and any agency, department or
instrumentality of the United States and any of their officers,
agents or employees;
[P.] X. "potential emission rate" means the
emission rate of a source at its maximum capacity to emit a
regulated air contaminant under its physical and operational
design, provided any physical or operational limitation on the
capacity of the source to emit a regulated air contaminant,
including air pollution control equipment and restrictions on
hours of operation or on the type or amount of material
combusted, stored or processed, shall be treated as part of its
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physical and operational design only if the limitation or the
effect it would have on emissions is enforceable by the
department or the local agency pursuant to the Air Quality
Control Act or the federal act;
[Q.] Y. "regulated air contaminant" means an air
contaminant, the emission or ambient concentration of which is
regulated pursuant to the Air Quality Control Act or the
federal act;
[R.] Z. "secretary" means the secretary of
environment;
[S.] AA. "significant deterioration" means an
increase in the ambient concentrations of an air contaminant
above the levels allowed by the federal act or federal
regulations for that air contaminant in the area within which
the increase occurs;
[T.] BB. "source" means a structure, building,
equipment, facility, installation or operation that emits or
may emit an air contaminant;
[U.] CC. "standard of performance" means a
requirement of continuous emission reduction, including any
requirement relating to operation or maintenance of a source to
assure continuous emission reduction;
[V.] DD. "state implementation plan" means a plan
submitted by New Mexico to the federal environmental protection
agency pursuant to 42 U.S.C. Section 7410; [and ]
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EE. "statewide greenhouse gas emissions" means the
total net anthropogenic emissions of greenhouse gases,
expressed in carbon dioxide equivalent using a methodology
determined to be appropriate by the department, including
emissions from electricity generation for consumption in New
Mexico, both imported and produced in New Mexico;
transportation fuels and heating fuels combusted in New Mexico;
buildings and structures; residential, commercial,
institutional and industrial waste management; manufacturing
processes; extraction and processing of raw materials;
agricultural products and forest products; and oil and gas
exploration, production, storage, distribution and
transportation in the state; and
[W.] FF. "toxic air pollutant" means an air
contaminant, except a hazardous air pollutant, classified by
the environmental improvement board or the local board as a
toxic air pollutant."
SECTION 5. A new section of the Air Quality Control Act,
Section 74-2-5.4 NMSA 1978, is enacted to read:
"74-2-5.4. [NEW MATERIAL ] ENVIRONMENTAL IMPROVEMENT BOARD
AND LOCAL BOARD--ADDITIONAL DUTIES AND POWERS.--
A. The environmental improvement board and local
board shall regulate greenhouse gas emissions to meet the
statewide greenhouse gas emissions limits established in
Subsection A of Section 74-1-19 NMSA 1978. The environmental
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improvement board and local board shall adopt or amend rules as
necessary to meet the greenhouse gas emissions limits
established in Subsection A of Section 74-1-19 NMSA 1978.
B. By January 1, 2026, the environmental
improvement board and local board shall adopt greenhouse gas
monitoring requirements that:
(1) consider data reporting and other
requirements already in place;
(2) include requirements to monitor, measure,
report and verify oil and gas exploration and production
operation methane emissions as measured by empirical methods;
and
(3) shall be utilized by the department in
future greenhouse gas inventory and progress reports.
C. By January 1, 2028, the environmental
improvement board and local board shall adopt rules for the
reduction of greenhouse gas emissions from sectors other than
oil and gas exploration and production operations sufficient to
meet the statewide greenhouse gas emissions limits in
Subsection A of Section 74-1-19 NMSA 1978 and adopt annual
greenhouse gas limits considering those annual limits proposed
by the department. The department and local agency shall
propose rules to the environmental improvement board and local
board based on the greenhouse gas sector report. If the
department or local agency concludes that it is most efficient
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to determine all sectors in one rulemaking, the department or
local agency may propose rulemaking for all sectors at the same
time. If a rule proposed under this subsection would establish
an allocation of emissions among sectors, interested parties
shall have standing by operation of law to intervene in the
rulemaking for the purpose of challenging the allocation.
D. If the environmental improvement board or local
board have not promulgated rules pursuant to Subsection C of
this section that include methane emissions from oil and gas
exploration and production operations, the environmental
improvement board or local board shall promulgate by July 1,
2028 a rule that the board determines shall achieve the
necessary methane emission reductions from oil and gas
exploration and production operations.
E. The rule to achieve greenhouse gas emissions
reductions from the oil and gas industry must ensure reductions
that are at least equivalent to:
(1) by 2030, a level of emissions of no more
than three-tenths of one percent methane emissions intensity;
(2) by 2040, a level of emissions of no more
than two-tenths of one percent methane emissions intensity; and
(3) by 2050, a level of emissions of no more
than one-tenth of one percent methane emissions intensity.
F. The environmental improvement board may amend or
adopt rules necessary or revise sector allocations to meet the
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statewide greenhouse gas emissions limits established in
Section 74-1-19 NMSA 1978.
G. For a rule adopted pursuant to this section, the
environmental improvement board and local board:
(1) shall ensure that the rules do not have a
disparate adverse effect on overburdened communities and apply
climate equity principles pursuant to the provisions of the
Environmental Improvement Act;
(2) shall rely, as deemed appropriate, on the
greenhouse gas emissions inventory and progress report
developed by the department pursuant to Subsection C of Section
74-1-19 NMSA 1978;
(3) may implement an emissions limitation or
control measure that results in an enforceable emissions
reduction, including those allowed by the federal Clean Air
Act, 74 U.S.C. 7410(a)(2);
(4) shall take into consideration other
relevant state and federal laws, rules and enforceable
requirements that contribute to reductions in greenhouse gas
emissions;
(5) may take into consideration federal, state
or philanthropic investments, grant programs and financial
incentives or voluntary actions taken by local governments and
private entities that contribute to reductions in greenhouse
gas emissions as the environmental improvement board or the
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local board deems appropriate;
(6) may take into consideration differences in
industry exposure to interstate or international competition
and the relative cost of carbon reduction mechanisms;
(7) may address sectors separately or in
combination as long as the requirements are otherwise met; and
(8) shall, at least once every five years,
based on information provided by the department, reevaluate the
effectiveness of the rules adopted pursuant to this section in
achieving the statewide greenhouse gas emissions limits in
Subsection A of Section 74-1-19 NMSA 1978.
H. The environmental improvement board and local
board shall develop and may amend a schedule of fees to defray
department administrative costs, which shall be deposited in
the state air quality permit fund."
SECTION 6. APPROPRIATION.--Three million dollars
($3,000,000) is appropriated from the general fund to the
department of environment for expenditure in fiscal year 2026
and subsequent fiscal years to administer the greenhouse gas
emissions reduction program. Any unexpended or unencumbered
balance remaining at the end of a fiscal year shall not revert
to the general fund.
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