HOUSE BILL 749

49th legislature - STATE OF NEW MEXICO - first session, 2009

INTRODUCED BY

James Roger Madalena

AN ACT

RELATING TO THE ENVIRONMENT; ENACTING THE URANIUM LEGACY CLEANUP ACT; PROVIDING FOR THE ADMINISTRATION OF THAT ACT AND CLEANUP ACTIONS TO BE TAKEN PURSUANT TO IT; AUTHORIZING SEVERANCE TAX BONDS TO FUND URANIUM LEGACY CLEANUP ACTIVITIES; IMPOSING STRICT LIABILITY ON URANIUM MINING ACTIVITIES; MAKING APPROPRIATIONS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     Section 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 6 of this act may be cited as the "Uranium Legacy Cleanup Act".

     Section 2. [NEW MATERIAL] DEFINITIONS.--As used in the Uranium Legacy Cleanup Act:

          A. "department" means the energy, minerals and natural resources department;

          B. "financial assistance" means providing grants or loans on terms and conditions approved by the secretary for qualified projects;

          C. "fund" means the uranium legacy cleanup fund;

          D. "qualified project" means a project selected by the secretary for financial assistance; and

          E. "secretary" means the secretary of energy, minerals and natural resources.

     Section 3. [NEW MATERIAL] URANIUM LEGACY CLEANUP FUND--CREATED--PURPOSE--APPROPRIATIONS.--

          A. The "uranium legacy cleanup fund" is created as a nonreverting fund in the state treasury and shall be administered by the department. The fund shall consist of the proceeds from severance tax bonds issued pursuant to Section 7-27-10.2 NMSA 1978; money that is repaid from loans approved by the secretary; and money that is appropriated or donated or that otherwise accrues to the fund. Money in the fund shall be invested by the state investment officer in the manner that land grant permanent funds are invested pursuant to Chapter 6, Article 8 NMSA 1978. Income from investment of the fund shall be credited to the fund.

          B. The department shall establish procedures and adopt rules as required to administer the fund and to originate grants or loans for qualified projects approved by the secretary.

          C. Money in the fund shall be appropriated by the legislature to the department to carry out the purposes of the Uranium Legacy Cleanup Act by providing financial assistance for qualified projects. Money shall be disbursed from the fund only on warrant of the secretary of finance and administration upon vouchers signed by the secretary of energy, minerals and natural resources or the secretary's authorized representative. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not revert to the general fund.

     Section 4. [NEW MATERIAL] DUTIES OF THE SECRETARY.--

          A. Expenditures from the fund for financial assistance shall be approved by the secretary for qualified projects directed at the elimination or reduction of actual or potential exposure of persons to contamination that may have resulted from uranium mining or milling activities that occurred prior to July 1, 2009.

          B. The secretary shall adopt rules for applying for financial assistance from the fund and for establishing priorities for qualified projects. The priorities for approving qualified projects shall be based upon:

                (1) the protection of public health, safety and welfare;

                (2) the protection of the environment from existing or potential contamination;

                (3) the ability to leverage funds available from other sources to implement qualified projects;

                (4) the degree to which a qualified project can be completed with the requested funding;

                (5) the size of the area to be included with the qualified project;

                (6) the number of persons affected or potentially affected by contamination at the site of the qualified project;

                (7) the level of actual or potential radiation exposure at the site of the qualified project;

                (8) the potential for an increase of the area contaminated or potential exposure to persons if the site of a qualified project is not cleaned up;

                (9) the lack of any potentially responsible party obligated to conduct a cleanup pursuant to any federal, state or tribal law;

                (10) the potential uses for the site following the completion of the qualified project; and

                (11) the legal authority of the applicant to conduct cleanup activities on the proposed site.

          C. Financial assistance may be provided to qualified projects in which the state of New Mexico, other state governments, the federal government, tribal governments and other public and private entities are participating.

          D. Financial assistance may be provided to qualified projects only if a project is located on real property in New Mexico owned by the federal government, the state or an Indian nation, tribe or pueblo.

     Section 5. [NEW MATERIAL] REPORT TO LEGISLATURE.--The secretary shall report to the appropriate interim legislative committee no later than October 1 of each year regarding the total expenditures from the fund for the previous fiscal year, the purposes for which expenditures were made, an analysis of the progress of the projects funded and proposals for legislative action in the subsequent legislative session.

     Section 6. [NEW MATERIAL] URANIUM MINING OPERATIONS--STRICT LIABILITY--DEFENSES--INDEMNIFICATION.--

          A. As used in this section:

                (1) "contaminant" means any substance from a uranium mining operation that could alter, if discharged or spilled, the physical, chemical, biological or radiological qualities of any part of the environment, including water. "Contaminant" does not mean source, special nuclear or by-product material as those terms are defined in the federal Atomic Energy Act of 1954;

                (2) "costs" means all costs of removal or remedial action, including oversight costs, indirect costs, legal costs and interest, incurred by the state of New Mexico because of a release or threatened release resulting in the incurring of those costs;

                (3) "director" means the director of the mining and minerals division of the energy, minerals and natural resources department;

                (4) "release" means the introduction or allowance of the introduction into the environment, including into water, either directly or indirectly, of one or more contaminants in a quantity and duration that may, with reasonable probability, injure human health, animal or plant life or property or unreasonably interfere with the public welfare or use of the property for a purpose other than a uranium mining operation;

                (5) "responsible party" means any person upon whom liability is imposed pursuant to Subsection B of this section;

                (6) "secretary" means the secretary of environment; and

                (7) "uranium mining operation" means a facility or a location where mining, milling or exploration activities were conducted during or after 1900 for the purpose of extracting, processing or exploring for radium, thorium or uranium ore.

          B. The following persons shall be strictly liable for costs:

                (1) the owner of a uranium mining operation;

                (2) the operator of a uranium mining operation;

                (3) any person having a permit issued pursuant to the New Mexico Mining Act or Water Quality Act that covers a uranium mining operation;

                (4) any person who, at the time of construction or operation of a uranium mining operation, or thereafter, owned, operated or had a permit to operate a uranium mining operation;

                (5) subject to Paragraph (2) of Subsection C of this section, any person who owned the real property upon which a uranium mining operation was conducted at the time of, or after the conduct of, a uranium mining operation;

                (6) a successor-in-interest to the uranium mining operation or the real property upon which it is or was situate; and

                (7) a successor-in-interest to any of the persons identified in Paragraphs (1) through (6) of this subsection, whether as a result of merger, assets purchase, stock transfer or any other transfer whatsoever or any series or combination of such transactions. In order for a successor-in-interest to be liable pursuant to this section, it is not necessary that it own, operate or be permitted to operate a uranium mining operation or the real property upon which the operation is or was situate.

          C. A person otherwise liable pursuant to Subsection B of this section shall not be liable if that person can establish by a preponderance of the evidence that:

                (1) the release of contaminants and the damages resulting therefrom were caused solely by an act of God; or

                (2) that person is an owner who:

                     (a) at the time that person acquired the property, after making reasonable inquiry, did not know and had no reason to know that the property had been used for a uranium mining operation;

                     (b) is a governmental entity that acquired the property by escheat, or through any other involuntary transfer or acquisition, or through the exercise of eminent domain authority;

                     (c) acquired the property by inheritance or devise;

                     (d) is a surface estate owner who did not participate in the management of the uranium mining operation; or

                     (e) did not participate in the management of the uranium mining operation and: 1) whose only interest in the uranium mining operation is as a royalty interest holder by virtue of ownership and a duly executed lease; 2) holds indicia of ownership primarily to protect a security interest in the facility; or 3) foreclosed such a security interest after the occurrence of the release.

          D. Whenever, on the basis of any information, the director determines that there has been any release or the secretary determines that there has been a release from a uranium mining operation that has the potential to affect water, public health or the environment, the director or the secretary may:

                (1) issue an order to any responsible party requiring removal or remedial action, including removal or remedial action beyond a uranium mining operation's boundaries, or such other response measure as the director or the secretary deems necessary to protect human health or the environment; or

                (2) commence an action in district court for appropriate relief, including a temporary or permanent injunction.

          E. If any responsible party liable for a release or threatened release fails without sufficient cause to undertake removal or remedial action properly upon order of the director or the secretary, that person shall be liable to the state for punitive damages in an amount at least equal to but not more than three times the amount of costs incurred as a result of that person's failure to take proper action. The director or the secretary is authorized to commence a civil action against any person that fails without sufficient cause to undertake removal or remedial action properly to recover punitive damages, which damages shall be in addition to any costs imposed against that person.

          F. The court, in accordance with joint and several liability, may award costs or damages, or both. Any amount received by the state in costs or damages pursuant to this section is appropriated to the uranium legacy cleanup fund.

          G. No state agency shall be liable pursuant to this section for costs or damages as a result of actions taken in response to an emergency created by the release or threatened release by or from a uranium mining operation.

          H. No indemnification or similar agreement shall be effective to transfer, from a responsible party pursuant to this section to any other person, the liability imposed pursuant to this section. Nothing in this subsection bars any agreement to insure, hold harmless or indemnify a party to that agreement for any liability pursuant to this section.

          I. Nothing in this section bars or replaces any cause of action available to any person that existed before the enactment of this section. The causes of action established pursuant to this section are in addition to other causes of action.

     Section 7. A new section of the Severance Tax Bonding Act, Section 7-27-10.2 NMSA 1978, is enacted to read:

     "7-27-10.2. [NEW MATERIAL] BONDING CAPACITY--AUTHORIZATION FOR SEVERANCE TAX BONDS--URANIUM LEGACY CLEANUP PROJECTS.--

          A. After the board of finance division of the department of finance and administration estimates the amount of bonding capacity available for severance tax bonds to be authorized by the legislature pursuant to Section 7-27-10.1 NMSA 1978, the division shall reserve ten percent of the estimated bonding capacity each year. The legislature authorizes the state board of finance to issue severance tax bonds in the annually reserved amount for use by the energy, minerals and natural resources department to fund uranium legacy cleanup projects.

          B. The energy, minerals and natural resources department shall certify to the state board of finance the need for issuance of bonds for uranium legacy cleanup projects. The state board of finance may issue and sell the bonds in the same manner as other severance tax bonds in an amount not to exceed the authorized amount provided for in Subsection A of this section. If necessary, the state board of finance shall take the appropriate steps to comply with the federal Internal Revenue Code of 1986, as amended. Proceeds from the sale of the bonds are appropriated to the uranium legacy cleanup fund for the purposes certified by the secretary of energy, minerals and natural resources to the state board of finance.

          C. Money from the severance tax bonds provided for in this section shall not be used to pay indirect project costs. Any unexpended balance from proceeds of severance tax bonds issued for a uranium legacy cleanup project shall revert to the severance tax bonding fund within six months of completion of the uranium legacy cleanup project. The energy, minerals and natural resources department shall monitor and ensure proper reversions.

          D. As used in this section, "uranium legacy cleanup project" means a capital outlay project for qualified projects pursuant to the Uranium Legacy Cleanup Act."

     Section 8. SEVERABILITY.--If any part or application of the Uranium Legacy Cleanup Act is held invalid, the remainder or its application to other situations or persons shall not be affected.

     Section 9. EFFECTIVE DATE.--The effective date of the provisions of this act is January 1, 2010.

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