Summary:

  Senate Bill 4 (SB 4) establishes statewide greenhouse gas emissions limits and requires greenhouse gas emissions reporting. SB 4 provides that state agencies apply climate equity principles to policy and rule development and expands the duties and powers of the Environmental Improvement Board. It appropriates three million dollars ($3,000,000). 

 

Legislation Overview:

 Senate Bill 4 (SB 4) establishes statewide greenhouse gas emissions limits and requires greenhouse gas emissions reporting.  It amends the Environmental Improvement Act (EIA) (Section 74-1-3 NMSA 1978) by adding seven definitions including: annual greenhouse gas emissions limit; greenhouse gas; greenhouse gas decade assessment; greenhouse gas inventory and progress report; greenhouse gas sector report; overburdened community; and statewide greenhouse emissions. It creates a new Section 74-1-19 NMSA of the EIA that establishes limitations on statewide greenhouse gas emissions using the 2005 levels as the base level that will be phased in starting in 2030. It requires the NM Environment Department (NMED) in consultation with other agencies to publish a greenhouse gas inventory and progress report by 1 July 2026 and every 1 July thereafter that contains seven specific information items including projections whether the greenhouse gas emissions limits will be met and a list of actions that the state is taking or plans to take to meet these emissions limits.  SB4 requires the NMED, in consultation with the Energy, Minerals and Natural Resources Department (EMNRD), to produce a greenhouse gas sector report by 31 December 2026 that will guide legislative rulemaking to achieve these greenhouse gas emissions limits statewide. These rulemaking recommendations are particularly directed to achieve the applicable limits in those sections that are currently underperforming by the next greenhouse gas decade assessment. It will propose the annual greenhouse gas emissions limit for years 2026 through 2050. It requires the NMED to submit either of these reports to the legislature, post the report on the NMED’s website, and mail the report to tribal governments.

SB 4 creates a new section of the EIA that requires state agencies to apply climate equity principles to policy and rule development that include making reduction of greenhouse gases in overburdened communities a priority; incorporating tribal consultation and outreach; and consideration of how to address adverse health and environmental impacts from greenhouse gases and other pollutants. 

SB 4 adds nine new definitions in Section 74-2-2 NMSA 1978 of the Air Quality Control Act (AQCA) including annual greenhouse gas emissions limit; greenhouse gas; greenhouse gas direct measurement; assessment; greenhouse gas inventory and progress report; greenhouse gas monitoring requirements; greenhouse gas sector report; methane emissions intensity; overburdened community; and statewide greenhouse emissions.

It requires the EIB and the local board to regulate greenhouse gas emissions by adopting or amending rules to meet the requirements in Section 74-1-19A NMSA 1978. SB 4 specifies both mandatory and discretionary elements for rule adoption under this section. For example, the boards shall insure that these limitations do not have disparate adverse effect on overburdened communities and apply climate equity principles while allowing sectors to be addressed separately or in combination. It requires the EIB and the local board to adopt rules for the relevant emissions produced by the oil and gas industry by 1 January 2026 but allows an extension to 1 July 2028. It requires the adoption of these emissions rules to other industries by 1 January 2028. SB 4 does require the rules to ensure reductions in methane emissions intensity each decade starting in 2030 and ending in 2050.

SB 4 requires the EIB and local board to develop and amend a schedule of fees to defray  department administrative costs, which will be deposited in the State Air Quality Permit Fund.

SB 4 appropriates three million dollars ($3,000,000) from the General Fund (GF) to the NMED for expenditure in Fiscal Year (FY) 2026 and subsequent FYs to administer the greenhouse gas
emissions reduction program.

Any unexpended or unencumbered balance remaining at the end of a FY will not revert to the GF.
 

Amendments:

 1/28/25
The Senate Conservation Committee amended SB 4 (SB 4A SCONC) by adding the requirements to monitor, measure, report and verify emissions from all sectors by 1 January 2027. It exempts methane from oil and gas exploration and production operations from the rules adopted by the EIB by 1 January 2028 to reduce greenhouse gas emissions. It clarifies that the rules to achieve greenhouse gas emissions limitations are from oil and gas exploration and production operations rather than from the oil and gas industry. SB 4A SCONC creates a separate section that requires the EIB and the local board to reevaluate the effectiveness of the rules at least every five years rather than just make rules for these 5-year reevaluations.