Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance

committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

if they are used for other purposes.

Current FIRs (in HTML & Adobe PDF formats) are a vailable on the NM Legislative Website (legis.state.nm.us).

Adobe PDF versions include all attachments, whereas HTML versions may not. Previously issued FIRs and

attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

F I S C A L I M P A C T R E P O R T

SPONSOR Jennings

DATE TYPED 3/3/05

HB

SHORT TITLE Regulation of Certain Petroleum Tanks

SB 844

ANALYST Hadwiger

APPROPRIATION

(in $000s)

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

New Mexico Department of Environment (NMED)

Office of the State Engineer (OSE)

SUMMARY

Synopsis of Bill

Senate Bill 844 would exempt from the Hazardous Waste Act and Ground Water Protection Act

above ground storage tanks with a capacity of 1,250 gallons or less that are composed of two

separate compartments of 500 gallons or less and are lined and sealed to prevent leaks.

Significant Issues

NMED indicates that this bill is unnecessary and contradictory legislation as there is already language in

20.5.1 NMAC that exempts above ground storage tanks with a capacity of 1,250 gallons or less. The

definition of above ground storage tank (AST) contains a lower volume limit of 1,320, and an upper limit

of 55,000 gallons. ASTs below a 1,250-gallon threshold are already not regulated storage tanks by the

PSTB. The current regulations consider that a compartment tank with a combined capacity of 1,320 gal-

lons or more and 55,000 gallons or less is considered to be one tank regardless of the number of com-

partments and the number of regulated substances contained. This compartment tank clarification is the

same language as the federal rules for underground storage tanks and is taken directly from the enacting

legislation.

Senate Bill 844 -- Page 2

FISCAL IMPLICATIONS

No fiscal impact.

OTHER SUBSTANTIVE ISSUES

NMED noted that SB333, which was signed into law during the 2001 legislative session,

amended the Hazardous Waste Act to require that agency to regulate ASTs containing petroleum

as part of its underground storage tank program. The Act required that NMED develop and

adopt similar regulations for above ground tanks that were previously in place for underground

storage tanks, including measures for release prevention, release reporting and corrective action.

The bill also gave owners and operators of ASTs access to the Corrective Action Fund. So, the

Bureau was given the authority to developing and enforcing pollution prevention and pollution

abatement regulations. Regulation development involved public participation of tank owners,

marketers, corrective action contractors, tank manufacturers and installers, environmental

groups, state and local government agencies for approximately a 2-year period. Many identified

issues and ensuing compromises resulted in the development of a functional set of regulations

defining operating standards and corrective action requirements for above ground storage tanks.

One issue that was extensively discussed during public stakeholders meetings were size limits on

regulated ASTs. Above ground storage tanks less than 1,320 gallons and 55,000 gallons or lar-

ger were exempted from the developed regulations. The lower limit was selected to be greater

than 1,000-gallon tanks, which are commonly used in industry as portable tanks that are used for

short periods of time and have no associated piping. These smaller ASTs were considered to be

less of a threat to the environment. A survey performed in May 2003 of the registered tank data-

base indicated that only 22 registered ASTs were between 1,000 and 1,320-gallon capacity. The

upper limit was selected to exclude very large ASTs that could bankrupt the Corrective Action

Fund if one of them were to experience a catastrophic release.

NMED added that, reviewing the same registered tank database (May 2003) shows that modify-

ing a lower limit, from 1,320 to 1,250 gallons would not accomplish either an increase or de-

crease to the number of regulated ASTs.

DH/yr