HOUSE GOVERNMENT, ELECTIONS AND INDIAN AFFAIRS

COMMITTEE SUBSTITUTE FOR

HOUSE ENERGY, ENVIRONMENT AND NATURAL RESOURCES

COMMITTEE SUBSTITUTE FOR

HOUSE BILL 6

55th legislature - STATE OF NEW MEXICO - second session, 2022

 

 

 

 

 

 

 

AN ACT

RELATING TO CLIMATE; ENACTING THE CLEAN FUTURE ACT; ESTABLISHING GREENHOUSE GAS EMISSIONS LIMITS; REQUIRING REPORTING; PROVIDING POWERS AND DUTIES; ENACTING A NEW SECTION OF THE AIR QUALITY CONTROL ACT; DIRECTING THE ENVIRONMENTAL IMPROVEMENT BOARD TO ADOPT RULES FOR A REGULATORY FRAMEWORK TO REDUCE GREENHOUSE GAS EMISSIONS FROM SOURCES SUBJECT TO ITS JURISDICTION; DIRECTING THE ASSESSMENT OF FEES.

 

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

     SECTION 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 5 of this act may be cited as the "Clean Future Act".

     SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Clean Future Act:

          A. "carbon dioxide equivalent" means the metric tons of a greenhouse gas that have the same global warming potential based on their relative radiative forcing effect over a specified period of time as one metric ton of carbon dioxide in the atmosphere;

          B. "direct emissions" means greenhouse gas emissions from all emitting sectors;

          C. "direct emissions reduction" means a quantifiable, permanent, verifiable and enforceable reduction of direct emissions, including capture or sequestration by technological or geological means, reductions achieved through early actions in excess of requirements for a given year and reductions in excess of requirements applicable to a source;

          D. "disproportionately impacted communities" means disadvantaged communities or communities or populations of people for which multiple burdens, including environmental and socioeconomic stressors, inequity, poverty, high unemployment, pollution or discrimination, may act to persistently and negatively affect the health, well-being and environment of the communities or populations;

          E. "emitting sector" means any sector or source that contributes to New Mexico's total emissions and is owned or operated, in whole or in part, by any person and includes electricity, both imported and produced in-state; heating, transportation and other fuels combusted in New Mexico; buildings, structures and distribution systems; residential, commercial, institutional and industrial waste management; agricultural and silvicultural practices; and extractive, industrial or other manufacturing processes;

          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. "net-zero emissions" means direct emissions of greenhouse gases are eliminated or fully offset;

          H. "offset" means an additional, quantifiable, permanent, verifiable and enforceable greenhouse gases reduction, removal or sequestration by biological, technological, chemical or geological means, including by direct air capture by technological or biological means, from a source or facility that is not otherwise subject to mandatory greenhouse gas emissions limits or reduction requirements and which reduction, removal or sequestration is measured in terms of metric tons of carbon dioxide equivalent; and

          I. "state entity" means a cabinet department of the executive branch of state government, the regulation and licensing department, the state land office, the public regulation commission, the New Mexico department of agriculture, the board of regents of the university of New Mexico and the board of regents of New Mexico state university.

     SECTION 3. [NEW MATERIAL] GREENHOUSE GAS EMISSIONS LIMITS--ESTABLISHED.--Emissions of greenhouse gases in New Mexico shall be limited as follows:

          A. by 2030, statewide direct emissions of greenhouse gases shall be at least fifty percent less than 2005 levels, as determined by an assessment of 2005 emissions from all sectors, which may be met by using direct emissions reductions; and

          B. by 2050, statewide direct emissions of greenhouse gases shall be at least ninety percent less than 2005 levels, as determined by an assessment of 2005 emissions from all sectors, which may be met by using direct emissions reductions, and any remaining emissions shall be at least matched with offsets to achieve at least net-zero emissions in 2050 and any subsequent year.

     SECTION 4. [NEW MATERIAL] REPORTING--DETERMINATION OF 2005 LEVELS.--

          A. Annually, by April 15, beginning the year after the enactment of the Clean Future Act, each state entity shall provide to the department of environment and the energy, minerals and natural resources department information on:

                (1) the qualitative and quantitative impacts of climate change on the state entity's programs and operations and, to the extent known, on disproportionately impacted communities;

                (2) the ways in which the state entity is able to integrate climate change adaptation and mitigation practices into its programs or operations;

                (3) the current and projected future direct emissions of greenhouse gases, to the extent known, from sources or sectors within the state entity's regulatory jurisdiction and the progress being made toward meeting the greenhouse gas emissions limits established in Section 3 of the Clean Future Act; and

                (4) any additional resources, statutory or regulatory authority or programs that could facilitate efforts by the state entity to reduce direct emissions of greenhouse gases from sources or sectors within the state entity's regulatory jurisdiction to meet the greenhouse gas emissions limits established in Section 3 of the Clean Future Act.

          B. Annually, by July 1, beginning the year after the enactment of the Clean Future Act, the department of environment and the energy, minerals and natural resources department shall jointly publish a report on the state's progress toward meeting the greenhouse gas emissions limits established in Section 3 of the Clean Future Act. The first report published shall determine the 2005 levels of statewide direct emissions of greenhouse gases for purposes of determining compliance with the limits established in Section 3 of the Clean Future Act. Additionally, each annual report shall:

                (1) prioritize coordination with and consideration of environmental and economic progress for, and the avoidance or perpetuation of impacts to, disproportionately impacted communities and identify any recommendations made by the sustainable economy advisory council;

                (2) identify issues and opportunities raised through tribal consultation;

                (3) contain an inventory of all statewide greenhouse gas emissions based on best available data and information and the progress being made toward achieving the greenhouse gas emissions limits. The inventory shall include, at a minimum, total direct emissions statewide and sector- and source-specific emissions and source-specific greenhouse gas emission information required to be reported pursuant to rules adopted by the environmental improvement board;

                (4) identify specific policies and regulatory strategies that are either in place or necessary to be in place to achieve the greenhouse gas emissions limits established in Section 3 of the Clean Future Act;

                (5) identify opportunities to incentivize early, additional voluntary direct emissions reductions;

                (6) identify additional programs that could facilitate achievement of the greenhouse gas emissions limits, including programs to reduce greenhouse gas emissions from light-, medium- and heavy-duty vehicles sold in the state and the adoption of updated building and energy codes, and the budgetary resources needed to implement the programs; and

                (7) identify opportunities to increase energy efficiency investments and targets for electric utilities, including opportunities for low-income households.

     SECTION 5. [NEW MATERIAL] POWERS AND DUTIES--DEPARTMENT OF ENVIRONMENT--ENERGY, MINERALS AND NATURAL RESOURCES DEPARTMENT.--The department of environment and the energy, minerals and natural resources department may seek resources from the legislature or other appropriate sources, coordinate the efforts needed in the state and among the state agencies and take any action authorized by law that is deemed necessary or appropriate by the secretary of the respective department for the state to meet the greenhouse gas emissions limits established in Section 3 of the Clean Future Act.

     SECTION 6. 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] DUTIES AND POWERS--ENVIRONMENTAL IMPROVEMENT BOARD--LOCAL BOARD--GREENHOUSE GAS EMISSIONS.--

          A. For the purposes of this section:

                (1) "carbon dioxide equivalent" means the metric tons of a greenhouse gas that have the same global warming potential based on their relative radiative forcing effect over a specified period of time as one metric ton of carbon dioxide in the atmosphere;

                (2) "direct emissions" means greenhouse gas emissions from a source;

                (3) "direct emissions reduction" means a quantifiable, permanent, verifiable and enforceable reduction of direct emissions, including capture or sequestration by technological or geological means, reductions achieved through early actions in excess of requirements for a given year and reductions in excess of requirements applicable to a source, as approved by the department;

                (4) "disproportionately impacted communities" means disadvantaged communities or communities or populations of people for which multiple burdens, including environmental and socioeconomic stressors, inequity, poverty, high unemployment, pollution or discrimination, may act to persistently and negatively affect the health, well-being and environment of the communities or populations;

                (5) "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;

                (6) "net-zero emissions" means direct emissions of greenhouse gases are eliminated or fully offset;

                (7) "offset" means an additional, quantifiable, permanent, verifiable and enforceable greenhouse gases reduction, removal or sequestration by biological, chemical or geological means, including by direct air capture by technological or biological means, from a source that is not otherwise subject to mandatory greenhouse gas emissions limits or reduction requirements, and which reduction, removal or sequestration is measured in terms of metric tons of carbon dioxide equivalent; and

                (8) "source" means a structure, building, equipment, facility, installation or operation that emits or may emit an air contaminant and any person or entity that imports electricity for retail sale in the state or any distributor of fuels that produce any emissions and are used in the state.

          B. No later than January 1, 2024, the department shall petition the environmental improvement board to promulgate rules to reduce greenhouse gas emissions from sources subject to the Air Quality Control Act. In preparing the petition, the department shall hold meetings in at least three distinct regions of the state where disproportionately impacted communities are located, consider the input provided by those communities at the meetings in developing the petition and solicit input from the sustainable economy advisory council and through tribal consultation.

          C. Notwithstanding the provisions of Section 74-2-5 NMSA 1978, the environmental improvement board shall have exclusive authority under the Air Quality Control Act to adopt rules to reduce greenhouse gas emissions for purposes of meeting statewide climate goals and emissions limits. The rules shall apply to sources statewide, including sources within the boundaries of a local authority. A local board may adopt greenhouse gas emissions reduction rules in addition to the environmental improvement board rules; provided that rules adopted by the local board shall be at least as stringent as the rules adopted by the environmental improvement board and shall not conflict with rules adopted by the environmental improvement board.

          D. The environmental improvement board shall:

                (1) adopt rules that establish the proportionate share of allowable greenhouse gas emissions from sources within the board's jurisdiction necessary to achieve:

                     (a) by 2030, statewide direct emissions of greenhouse gases that are at least fifty percent less than 2005 levels, as determined by an assessment of 2005 emissions from all sectors, which may be met by using direct emissions reductions, as determined by the department; and

                     (b) by 2050, statewide direct emissions of greenhouse gases that are at least ninety percent less than 2005 levels, as determined by an assessment of 2005 emissions from all sectors, which may be met by using direct emissions reductions, and any remaining emissions shall be at least matched with offsets to achieve at least net-zero emissions in 2050 and any subsequent year, as determined by the department;

                (2) consider requirements and reductions achieved or required pursuant to other applicable laws, rules or federal regulations in establishing the proportionate share of allowable greenhouse gas emissions from sources within the board's jurisdiction to achieve the limits of Paragraph (1) of this subsection; and

                (3) adopt rules to achieve the limits established pursuant to Paragraph (1) of this subsection, including:

                     (a) greenhouse gas emissions reporting and disclosure requirements;

                     (b) greenhouse gas emissions permitting requirements, standards and limits. In setting the standards, limits and requirements, the board shall consider: 1) prioritization and benefits of emissions reductions in and avoidance of increased impacts on disproportionately impacted communities; 2) results of tribal consultation, including on cultural considerations related to geologic sequestration; 3) impacts of any voluntary actions taken by sources before the initiation of the rulemaking process; 4) technical availability and feasibility; and 5) cost-effectiveness;

                     (c) protocols for the review and approval by the department of offsets. The protocols for verifying the reduction, removal or sequestration by an offset shall consider: 1) the requirements of any relevant regional offset marketplace; 2) the geographic location of any offsets; 3) the greenhouse gas being reduced, removed or sequestered and the nature of the reduction, removal or sequestration activity and the impact of the offset; and 4) the impact of offsets on disproportionately impacted communities or environmental justice communities;

                     (d) protocols for the development, use and any transfer, sale and trading of offsets or credits, and any market mechanisms or potential participation in an applicable regional market for the same;

                     (e) requirements to ensure all direct emissions reductions by sources subject to the limits are counted toward achievement of the statewide emissions limits and that sources have incentives to reduce emissions early and in excess of any limit;

                     (f) reasonable fees to be paid by sources. The fees may be based on total direct emissions from a source and shall cover the reasonable costs of the department to administer and enforce the greenhouse gas emissions rules promulgated by the environmental improvement board. The fees collected pursuant to this subparagraph shall be remitted to the state treasurer and deposited in the general fund; and

                     (g) any other requirements the board deems necessary to achieve the limits established pursuant to Paragraph (1) of this subsection."

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