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 Griego

ORIGINAL DATE

LAST UPDATED

1-28-06

2-9-06 HB

SHORT TITLE

HAZARDOUS WASTE VOLUNTARY FEE

AGREEMENTS

SB 521/aSCONC

ANALYST Hadwiger

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

FY08

$1,300.0

$1.300.0 Recurring

Hazardous

Waste Fund

(337)

(Parenthesis ( ) Indicate Expenditure Decreases)

As amended by SCONC, duplicates HB410 as amended by HENRC and HBIC.

Relates to Appropriation in the General Appropriation Act from the Hazardous Waste Fund to

the Water Quality Program of the Department of Environment.

SOURCES OF INFORMATION

LFC Files

Responses Received From

New Mexico Department of Environment (NMED)

SUMMARY

Synopsis of SCONC Amendment

The Senate Conservation Committee amendment to Senate Bill 521 would:

1)

Ensure all revenues collected pursuant to voluntary fee agreements are deposited to the

credit of the Hazardous Waste Fund;

2)

Ensure that voluntary fee agreements secure revenues in addition to fees collected under

the existing regulatory framework;

3)

Make stylistic changes.

This amendment addresses technical considerations that were identified in the original bill.

Senate Bill 521/aSCONC – Page 2

Synopsis of Original Bill

Senate Bill 521 amends a section of the Hazardous Waste Act to allow the Department of Envi-

ronment (NMED) and a business generating hazardous waste, conducting permitted hazardous

waste management activities or seeking a permit for the management of hazardous waste to enter

into a voluntary fee agreement in lieu of paying fees established by the Environmental Improve-

ment Board (EIB).

FISCAL IMPLICATIONS

NMED anticipates that passage of this bill would generate $1.3-$1.8 million per year to the Haz-

ardous Waste Fund. The actual revenues will vary depending on the number and type of facili-

ties that would enter into voluntary fee agreements under this legislation.

Currently, NMED has two such agreements with the U.S. Department of Energy for Los Alamos

National Laboratory (LANL) and the Waste Isolation Pilot Project (WIPP). In all, the two

agreements could generate $1.8 million a year in federal revenues. The lack of statutory provi-

sions allowing voluntary fee agreements complicated that process of developing the DOE con-

sent orders for LANL and WIPP. Moreover, the U.S. Department of Defense (DOD) has not de-

veloped similar agreements for Kirtland Air Force Base, White Sands and Fort Wingate, to some

degree, because of the lack of these statutory provisions. The NMED revenue estimate is a

rough projection reflecting the impact of this bill if it facilitates conclusion of voluntary fee

agreements with the DOD sites.

SIGNIFICANT ISSUES

This bill was endorsed by the Radioactive and Hazardous Materials Committee.

NMED indicates that it is the state agency that oversees the handling and disposition of hazard-

ous waste under federal and state law. Current authority under the New Mexico Hazardous

Waste Act limits the EIB’s rule-making authority for hazardous waste management fee assess-

ment to: 1) a flat business fee on entities that are engaged in a regulated hazardous waste activ-

ity; 2) a fee on hazardous waste generators based primarily on the amount and toxicity of waste

generated; 3) fees that approximate the Department’s cost of investigating a permit application

for treatment, storage, or disposal of hazardous waste and issuing a permit; and 4) an annual haz-

ardous permit management fee. The fee schedules adopted by the Board are “one size fits all,”

whereby the same fees must apply to all facilities, regardless of their size or scope.

NMED further noted that fee assessment authority under the HWA was established in the late

1980s, when the operation of treatment, storage or disposal (TSD) facilities was beginning to be

regulated, and therefore the focus of the nascent regulatory program. Since then, cleanup of leg-

acy contamination, especially at federal facilities, has become an equal priority of the hazardous

waste regulatory program, but not an equal priority in terms of funding. This issue is particularly

important in New Mexico, where 40 per cent of all hazardous waste facilities are federal facili-

ties, most of which have significant clean up requirements. Moreover, many of the health threats

posed by the contamination are long-lived, so the decisions made regarding clean up at the facili-

ties must be backed up with the most robust science. The HWA also did not anticipate permitted

facilities as complex as the Waste Isolation Pilot Plant (WIPP) or the Los Alamos National

Laboratory (LANL). WIPP’s permit is unique in that it requires the Environment Department to

Senate Bill 521/aSCONC – Page 2

indirectly regulate Department of Energy (DOE) sites that generate waste destined for WIPP.

This involves Department staff conducting on-site monitoring DOE “audits” of the generator

sites before waste is shipped to WIPP to ensure the waste has been sufficiently characterized.

Also, WIPP’s permit modification requests far exceed the scope and complexity of those from

other permitted facilities, requiring a dedicated staff and contractors with specialized expertise.

LANL has dozens of permitted units and hundreds of polluted sites that must be cleaned up un-

der a Consent Order signed May 2005. The Order sets tough deadlines for NMED to review

documents in a timely manner. The amendments in SB521 provide a mechanism whereby WIPP

and LANL may continue their direct funding of regulatory oversight and allow other facilities to

do the same. SB521 would allow NMED to enter into voluntary agreements with complex facili-

ties like WIPP and LANL to establish sufficient revenue to support adequate regulatory over-

sight. Because the fee agreements would operate in lieu of the schedule of fees established by

the Board, less complex facilities would not be burdened with unreasonable fees that are based

on oversight of the more complex facilities.

SB521 is intended to allow facilities with significant clean-up requirements (like New Mexico’s

federal facilities) or an unusual permitting framework (like WIPP) to pay the Department’s costs

of overseeing their permits and cleanup of their contaminated sites. The agreements that govern

the payment would be voluntary; facilities that decline to enter into agreements would simply

pay fees based on the schedules promulgated by the Board. This bill would provide federal fa-

cilities the ability to choose a sensible fee structure that fits their circumstances.

PERFORMANCE IMPLICATIONS

NMED has two performance measures related to hazardous waste fee agreements.

1)

NMED’s ability to take action on WIPP audits in a timely manner (80% within 45 days)

2)

NMED’s ability to provide timely notice to LANL and Sandia National Laboratory under

the consent orders that govern cleanup (90% of notice dates in the orders met).

NMED has met the measure concerning WIPP audits, in large part because WIPP funded NMED

through an informal fee agreement since 2000. NMED has not met the consent order measure

for Sandia and Los Alamos national laboratories due to lack of resources. SB521, in conjunction

with NMED expansion request for LANL-dedicated staff, would pave the way for direct facility

funding. This would lead to a greater ability by NMED to meet the performance measures.

ADMINISTRATIVE IMPLICATIONS

NMED indicates that it currently has the capability to administer fee agreements.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

As amended, SB521 duplicates House Bill 410 as amended by HBIC and HENRC.

DH/yr