CLEAR HORIZONS & EMISSIONS CODIFICATION

SB0018

SENATE BILL 18

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

Mimi Stewart
and
Kristina Ortez
and
Angel M. Charley

and
Andrea Romero
and
Cindy Nava

AN ACT

RELATING TO THE ENVIRONMENT; ESTABLISHING STATEWIDE GREENHOUSE
GAS EMISSIONS LIMITS; REQUIRING GREENHOUSE GAS EMISSIONS
REPORTING; EXPANDING DUTIES AND POWERS OF THE ENVIRONMENTAL
IMPROVEMENT BOARD.

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. "board" means the environmental improvement
board;

B. "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. "department" [
or "environmental improvement
department"
] means the department of environment;

D. "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;

E. "greenhouse gas" means the 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;

[
E.
]
F.
"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;

[
F.
]
G.
"person" means the state or any agency,
institution or political subdivision thereof, any public or
private corporation, individual, partnership, association or
other entity and includes any officer or governing or managing
body of any political subdivision or public or private
corporation;

[
G.
]
H.
"residential on-site liquid waste system"
means an on-site liquid waste system serving up to four
dwelling units;

[
H.
]
I.
"secretary" means the secretary of
environment; [
and
]

J. "statewide greenhouse gas emissions" means the
total net anthropogenic emissions of greenhouse gases within
the state, including emissions from the out-of-state production
of electricity for use within the state, expressed in carbon
dioxide equivalent using a methodology determined to be
appropriate by the department; and

[
I.
]
K.
"transportation fuel" means electricity or
a liquid, gaseous or blended fuel, including gasoline, diesel,
liquefied petroleum gas, natural gas and hydrogen, sold,
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.

B. The limits set forth in this section may be
achieved through:

(1) direct reductions within the state; or

(2) net reductions that offset emissions
through the removal of greenhouse gases from the atmosphere
within the state and may include voluntary removals or
reductions from projects located on Indian lands within the
exterior boundaries of the state."

SECTION 3.
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. "department" means the department of
environment;

D. "director" means the administrative head of a
local agency;

E. "emission limitation" or "emission 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. "federal act" means the federal Clean Air Act,
its subsequent amendments and successor provisions;

G. "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;

H. "greenhouse gas" means the 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;

I. "greenhouse gas intensity" means the ratio of
emissions of one or more greenhouse gases per unit of activity,
output or product;

[
H.
]
J.
"hazardous air pollutant" means an air
contaminant that has been listed as a hazardous air pollutant
pursuant to the federal act;

[
I.
]
K.
"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;

[
J.
]
L.
"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.
]
M.
"local board" means a municipal, county or
joint air quality control board created by a local authority;

[
L.
]
N.
"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;

[
M.
]
O.
"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
alternate fuel or raw material is caused by a natural gas
curtailment or emergency allocation or [
an other
] lack of
supply of natural gas;

[
N.
]
P.
"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;

Q. "non-reservation Indian land" means individual
Indian allotments and dependent Indian communities;

[
O.
]
R.
"person" includes an individual,
a

partnership,
a
corporation,
an
association, the state or
a

political subdivision of the state and any agency, department
or instrumentality of the United States and any of their
officers, agents or employees;

[
P.
]
S.
"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
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.
]
T.
"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;

U. "reservation":

(1) means all lands within the exterior
boundaries of an Indian nation's, tribe's or pueblo's
reservation and its confirmed grants from prior sovereigns that
are within the limits of areas set aside by the United States
for the exclusive use and occupancy of an Indian nation, tribe
or pueblo by treaty, law or executive order; and

(2) does not include individual Indian
allotments and dependent Indian communities;

[
R.
]
V.
"secretary" means the secretary of
environment;

[
S.
]
W.
"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.
]
X.
"source" means a structure,
a
building,
equipment,
a
facility,
an
installation or
an
operation that
emits or may emit an air contaminant;

[
U.
]
Y.
"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.
]
Z.
"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
]

AA. "statewide greenhouse gas emissions" means the
total net anthropogenic emissions of greenhouse gases within
the state, including emissions from the out-of-state production
of electricity for use within the state, expressed in carbon
dioxide equivalent using a methodology determined to be
appropriate by the department; and

[
W.
]
BB.
"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 4.
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
] ADDITIONAL POWERS AND DUTIES TO
REGULATE GREENHOUSE GAS EMISSIONS.--

A. The environmental improvement board and local
board shall:

(1) adopt a plan and rules for the reduction
of greenhouse gas emissions sufficient to meet each of the
statewide greenhouse gas emissions limits established in
Subsection A of Section 74-1-19 NMSA 1978;

(2) adopt an initial plan and rules at least
sufficient to meet statewide greenhouse gas limits established
for years 2030 and 2040 by December 31, 2028; and

(3) adopt or amend the plan and rules as
necessary to meet the statewide greenhouse gas emission limits.

B. Rules establishing limits on emissions of
greenhouse gases from stationary sources pursuant to Subsection
A of this section may only apply to sources that:

(1) individually have the potential to emit
ten thousand metric tons or more of greenhouse gases annually
in New Mexico; or

(2) include a group of two or more stationary
sources in New Mexico under common ownership or control that
individually have the potential to emit less than ten thousand
metric tons of greenhouse gases annually but collectively have
the potential to emit twenty-five thousand metric tons or more
of greenhouse gases annually.

C. By September 30, 2027, the environmental
improvement board and local board shall adopt greenhouse gas
monitoring and reporting requirements that:

(1) take into account data reporting
requirements in enabling regulations or codified in federal law
or state law;

(2) include requirements to monitor, measure,
report and verify greenhouse gas emissions and may include
requirements to monitor, measure, report and verify greenhouse
gas intensity;

(3) include requirements to monitor, measure,
report and verify oil and gas exploration and production
operation methane emissions as measured by empirical methods
and may include requirements to monitor, measure, report and
verify greenhouse gas intensity;

(4) require reporting of emissions in carbon
dioxide equivalents; and

(5) take effect on January 1, 2028.

D. By September 20, 2028, the environmental
improvement board and local board shall adopt a rule that:

(1) establishes a certification process for
mechanisms that:

(a) offset emissions through the removal
of greenhouse gases from the atmosphere; or

(b) quantify reductions of greenhouse
gas emissions from sources that are not subject to greenhouse
gas emission limits established pursuant to the Environmental
Improvement Act;

(2) requires that any certified removal or
quantified reduction be additional, real, permanent,
quantifiable, verifiable, enforceable and not otherwise
required by law;

(3) requires that any certified removal or
quantified reduction project be located within the state;
provided that the rule may allow for certification of voluntary
removal or quantified reduction projects located on Indian
lands within the exterior boundaries of the state; and

(4) establishes penalties and enforcement
provisions for certifications.

E. In adopting or amending a plan and rules
pursuant to this section, the environmental improvement board
and local board shall:

(1) rely, as the environmental improvement
board and local board deem appropriate, on the inventory and
other data in the annual greenhouse gas emissions report
published by the department pursuant to Subsection G of this
section;

(2) certify at least every two years that the
promulgated rules will achieve the greenhouse gas emissions
limits or revise rules to meet the limits;

(3) assess whether rules are likely to impact
levels of air pollution and consider mechanisms that could
mitigate adverse impacts to the extent technically or
economically feasible;

(4) take into consideration other relevant
state and federal laws, rules and enforceable requirements that
contribute to reductions in greenhouse gas emissions;

(5) give appropriate weight to all facts and
circumstances, including the factors listed in Subsection F of
Section 74-2-5 NMSA 1978; and

(6) not assert jurisdiction to establish
limits on greenhouse gas emissions or greenhouse gas intensity
from stationary sources located on reservation land.

F. In adopting or amending a plan and rules
pursuant to this section, the environmental improvement board
and local board may:

(1) 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;

(2) take into consideration interstate or
international competition and the relative cost of carbon
reduction mechanisms;

(3) differentiate regulatory requirements
based on a greenhouse gas emitter's potential to emit
greenhouse gases;

(4) address categories of sources separately
or in combination;

(5) take into consideration other mechanisms
that result in reductions in greenhouse gas intensity;

(6) allow use of flexible compliance
mechanisms that allow averaging of emission reductions or
trading of compliance instruments among regulated sources
within the state; provided that the compliance mechanism
achieves emission or greenhouse gas intensity reductions that
are additional, real, permanent, quantifiable, verifiable and
enforceable; and

(7) allow a source to use removals or
reductions certified pursuant to Subsection D of this section
to meet emission or greenhouse gas intensity reduction
requirements.

G. By December 31, 2028 and December 31 of each
year thereafter, the department shall publish, in consultation
with the energy, minerals and natural resources department, the
department of transportation and other relevant federal, state,
local and tribal entities, a greenhouse gas emissions report
that includes:

(1) greenhouse gas emissions baseline data for
2005;

(2) an inventory of all current statewide
greenhouse gas emissions showing changes from baseline
emissions;

(3) a projection of whether the state will
meet the statewide greenhouse gas emissions limits;

(4) a list of actions that the state is
taking, or is planning to take, to meet the statewide
greenhouse gas emissions limits and a schedule for those
actions;

(5) a quantification and analysis of the
projected greenhouse gas emissions reductions that each action
will achieve;

(6) a quantification and analysis of any
projected shortfalls in achieving the statewide greenhouse gas
emissions targets; and

(7) recommendations for further action,
including revised regulations or legislation, to eliminate the
shortfall, if any.

H. In advance of any rulemaking action proposed by
the department or local agency to the environmental improvement
board or local board related to meeting the statewide
greenhouse gas emission targets, the department or local agency
shall engage in consultation with potentially affected tribal
governments pursuant to the State-Tribal Collaboration Act and
conduct outreach to, and hold public meetings in, communities
that the department or local agency determines will be most
affected by the proposed action. During the consultation
process, the department or local agency shall provide
information to a potentially affected Indian nation, tribe or
pueblo about whether the proposed rule would regulate any
sources of greenhouse gases located on non-reservation Indian
land or on non-Indian fee land located within the exterior
boundaries of an Indian reservation and, if requested by the
Indian nation, tribe or pueblo, enter into an intergovernmental
agreement regarding regulation of sources of greenhouse gas
emissions.

I. The department shall submit each annual report
to the governor, the legislature and tribal governments. A
copy of each annual report shall be provided to state records
and archives.

J. The environmental improvement board shall set a
fee schedule for the department, and the local board shall set
a fee schedule for the local agency, to implement the
provisions of this section."

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