SB 178 — PRODUCED WATER & ABANDONED WELLS FUND

The produced water fee shall be collected by the c e s k 23 taxation and revenue department in a manner prescribed by that e a n b 24 department.

All money collected by the taxation and revenue u [ department from the produced water fee shall be deposited in .229637.3 - 2 - the plugging and remediating abandoned wells fund.

E.

The produced water fee shall be paid to the taxation and revenue department on or before the twenty-fifth day of the month following the month in which the water is produced.

F.

The oil conservation division shall promulgate rules to require reporting and accounting of each barrel of produced water for purposes of this section.

G.

The taxation and revenue department shall administer and enforce the collection of the produced water fee, and the Tax Administration Act applies to the administration and enforcement of the fee." SECTION 2.

Section 70-13-1 NMSA 1978 (being Laws 2019, Chapter 197, Section 1) is amended to read:

"70-13-1.

SHORT TITLE.--[Sections 1 through 5 of this act] Chapter 70, Article 13 NMSA 1978 may be cited as the e t 17 "Produced Water Act"." w l n d 18 SECTION 3.

Section 74-6-4 NMSA 1978 (being Laws 1967, = = 19 a l Chapter 190, Section 4, as amended) is amended to read:

i a e r 20 "74-6-4.

DUTIES AND POWERS OF COMMISSION.--The a t m m 21 commission:

d r e 22 A.

may accept and supervise the administration of c e s k 23 loans and grants from the federal government and from other e a n b 24 sources, public or private, which loans and grants shall not be u [ expended for other than the purposes for which provided;

.229637.3 - 3 - B.

shall not adopt or promulgate a standard or regulation that exceeds a grant of rulemaking authority listed in the statutory section of the Water Quality Act authorizing h the standard or regulation;

g o t hr D.

shall adopt water quality standards for surface g e i k and ground waters of the state based on credible scientific h r i s data and other evidence appropriate under the Water Quality h , t, Act.

The standards shall include narrative standards and, as e u g e b l e e h appropriate, the designated uses of the waters and the water n d d i = = o h quality criteria necessary to protect such uses.

The standards l ] b ,d i a º e shall at a minimum protect the public health or welfare, r i = r t e w d m a n o enhance the quality of water and serve the purposes of the Waterd Qualitym Act.:

Inb makinge standards,d thes commissionº shallo givet weightn it= deems.229637.3AIC appropriateFebruary to16, all2025 facts(11:52am) ands ek tm 17e circumstances,- including4 the- usee anda value of the water for w l n e d 18r watere supplies, propagation of fish and wildlife, recreational = = 19 a l purposesu and[ agricultural,A industriald andWater otherQuality purposes;Act.

iIn amaking estandards, rthe 20commission E.shall give weight it deems appropriate to all facts and circumstances, including the use and value of the water for water supplies, propagation of fish and wildlife, recreational purposes and agricultural, industrial and other purposes;

shallE. adopt, promulgate and publish regulations a t m m 21 to prevent or abate water pollution in the state or in any d r e 22 specific geographic area, aquifer or watershed of the state or c e s k 23 in any part thereof, or for any class of waters, and to govern e a n b 24 the disposal of septage and sludge and the use of sludge for u [ various beneficial purposes.

Theshall regulationsadopt, governingpromulgate theand .229637.3publish -regulations 4to -prevent disposalor ofabate septagewater andpollution sludgein maythe includestate theor usein ofany trackingspecific andgeographic permittingarea, systemsaquifer or otherwatershed reasonableof meansthe necessarystate toor assurein thatany septagepart andthereof, sludgeor arefor designatedany forclass disposalof in,waters, and arriveto at,govern disposal facilities, other than facilities on the premisesdisposal whereof the septage and sludge isand generated, for which a permit or other authorization has been issued pursuant to the federaluse actof orsludge thefor Watervarious Qualitybeneficial Act.purposes.

RegulationsThe regulations governing the disposal of septage and sludge may specifyinclude athe standarduse of performancetracking forand newpermitting sourcessystems or other reasonable means necessary to assure that reflectsseptage theand greatestsludge reductionare indesignated thefor concentrationdisposal ofin, waterand contaminantsarrive thatat, thedisposal commissionfacilities, determinesother tothan befacilities achievableon throughthe applicationpremises ofwhere the bestseptage availableand demonstratedsludge controlis technology,generated, processes,for operatingh methodswhich a permit or other alternatives,authorization includinghas wherebeen practicableissued apursuant standardu permitting» nor dischargeto ofthe pollutants.federal act or the Water Quality Act.

InRegulations makingmay regulations,t h g e l i specify a standard of performance for new sources that reflects h r i s the commissiongreatest shallreduction givein weightthe itconcentration deemsof appropriatewater h , e h contaminants that the commission determines to allbe relevantachievable factst andu circumstances,g including:e b l e e , gh through application of the best available demonstrated control n d d i = = o h technology, processes, operating methods or other alternatives, l ] b ,d i a º r including where practicable a standard permitting no discharge e r = t e w d m a n o of pollutants.

eIn tmaking 17regulations, (1) the charactercommission andshall degree of injury to or w l n d 18m interference: with health, welfare, environment and property;

=b r e t º o t n = 19.229637.3AIC aFebruary l16, (2)2025 the(11:52am) publics interest,k includingm thee social- i5 - e a n e d r 20e andl economicu value[ ofA thed sourcesgive ofweight waterit contaminants;deems appropriate to all relevant facts and circumstances, including:

a(1) t m m 21 (3) the technicalcharacter practicability and economicdegree d r e 22 reasonableness of reducinginjury to or eliminatinginterference water contaminants c e s k 23 from the sources involved and previous experience with ehealth, awelfare, nenvironment b 24 equipment and methodsproperty; available to control the water u [ contaminants involved;

.229637.3(2) -the 5public -interest, (4)including the successivesocial uses,and includingeconomic domestic,value commercial,of industrial,the pastoral,sources agricultural,of wildlifewater andcontaminants; recreational uses;

(3) the technical practicability and economic reasonableness of reducing or eliminating water contaminants from the sources involved and previous experience with equipment and methods available to control the water contaminants involved;

(4) the successive uses, including domestic, commercial, industrial, pastoral, agricultural, wildlife and recreational uses;

h (6) property rights and accustomed uses;

and g o t hr (7) federal water quality requirements;

g e i k F.

shall assign responsibility for administering h r i s its regulations to constituent agencies so as to assure h , t, adequate coverage and prevent duplication of effort.

To this e u g e b l e e h end, the commission may make such classification of waters and n d d i = = o h sources of water contaminants as will facilitate the assignment l ] b ,d i a º e of administrative responsibilities to constituent agencies.

Ther commissioni shall= alsor heart ande decidew disputesd betweenm constituenta agenciesn aso toThe jurisdictioncommission concerningshall anyalso mattershear withinand thedecide purposedisputes ofbetween thed Waterm Quality: Act.

Inb assigning e d s º o t 17n responsibilities= to.229637.3AIC constituentFebruary agencies,16, the2025 commission(11:52am) shalls wk lm e - 6 - e a n e d 18r givee priorityl u [ A d constituent agencies as to thejurisdiction primaryconcerning interestsany ofmatters within the constituentpurpose =of =the 19Water aQuality lAct. agencies.

TheIn departmentassigning ofresponsibilities environmentto shallconstituent provideagencies, ithe acommission eshall rgive 20priority technical services, including certification of permits pursuant a t m m 21 to the federalprimary act,interests and shall maintain a repository of the dconstituent ragencies. e 22 scientific data required by the Water Quality Act;

cThe edepartment sof kenvironment 23shall G.provide technical services, including certification of permits pursuant to the federal act, and shall maintain a repository of the scientific data required by the Water Quality Act;

mayG. enter into or authorize constituent agencies e a n b 24 to enter into agreements with the federal government or other u [ state governments for purposes consistent with the Water .229637.3 - 6 - Quality Act and receive and allocate to constituent agencies funds made available to the commission;

may enter into or authorize constituent agencies to enter into agreements with the federal government or other state governments for purposes consistent with the Water Quality Act and receive and allocate to constituent agencies funds made available to the commission;

may grant an individual variance from any regulation of the commission whenever it is found that compliance with the regulation will impose an unreasonable h burden upon any lawful business, occupation or activity.

The u » r commission may only grant a variance conditioned upon a person t h g e l i effecting a particular abatement of water pollution within a h r i s reasonable period of time.

Any variance shall be granted for h , e h the period of time specified by the commission.

The commission t u g e b l e e , gh shall adopt regulations specifying the procedure under which n d d i = = o h variances may be sought, which regulations shall provide for l ] b ,d i a º r the holding of a public hearing before any variance may be e r = t e w d m a n o granted;

I.d m :

mayb adoptr regulations to require the filing with it or a constituent agency of proposed plans and specifications e t 17º foro thet construction and operation of new sewer systems, w l n d 18 treatment works or sewerage systems or extensions, = =.229637.3AIC 19February a16, l2025 modifications(11:52am) ofs ork additionsm toe new- or7 existing- sewere systems, i a n e d r 20e treatmentl worksu or[ sewerageA systems.d I.

Filingmay withadopt andregulations approvalto arequire tthe mfiling mwith 21it byor thea federalconstituent housingagency administration of proposed plans forand anspecifications extensionfor dthe rconstruction eand 22operation toof annew existingsewer orsystems, constructiontreatment ofworks aor new sewerage systemsystems cor eextensions, smodifications kof 23or intendedadditions to servenew aor subdivisionexisting solelysewer residentialsystems, intreatment natureworks eor asewerage nsystems. b 24 shall be deemed compliance with all provisions of this u [ subsection;

.229637.3Filing -with 7and -approval J.by the federal housing administration of plans for an extension to an existing or construction of a new sewerage system intended to serve a subdivision solely residential in nature shall be deemed compliance with all provisions of this subsection;

J.

h The commission may adopt regulations for particular industries.

u » r The commission shall adopt regulations for the dairy industry t h g e l i and the copper industry.

The commission shall consider, in h r i s addition to the factors listed in Subsection E of this section, h , e h the best available scientific information.

The regulations may t u g e b l e e , gh include variations in requirements based on site-specific n d d i = = o h factors, such as depth and distance to ground water and l ] b ,d i a º r geological and hydrological conditions.

The constituent agency shalle establishr an= advisoryt committee composed of persons with knowledge and expertise particular to the industry category and other interested stakeholders to advise the constituent agency e tw 17d onm appropriatea regulationsn too beshall proposedestablish foran adoptionadvisory bycommittee thecomposed wof lpersons nwith d 18m commission.:

Theb regulationsr shalle bet developedº ando adoptedt inn = =.229637.3AIC 19February 16, 2025 (11:52am) s k m e - 8 - e a n e d r e l accordanceu with[ aA scheduled approvedknowledge and expertise particular to the industry category and other interested stakeholders to advise the constituent agency on appropriate regulations to be proposed for adoption by the commission.

The iregulations a e r 20 schedule shall incorporatebe andeveloped opportunityand foradopted publicin inputaccordance andwith a tschedule mapproved mby 21the stakeholdercommission. negotiations;

dThe rschedule eshall 22incorporate L.an opportunity for public input and stakeholder negotiations;

mayL. adopt regulations establishing pretreatment c e s k 23 standards that prohibit or control the introduction into e a n b 24 publicly owned sewerage systems of water contaminants that are u [ not susceptible to treatment by the treatment works or that .229637.3 - 8 - would interfere with the operation of the treatment works;

may adopt regulations establishing pretreatment standards that prohibit or control the introduction into publicly owned sewerage systems of water contaminants that are not susceptible to treatment by the treatment works or that would interfere with the operation of the treatment works;

shall not require a permit respecting the use of water in irrigated agriculture, except in the case of the employment of a specific practice in connection with such irrigation that documentation or actual case history has shown h to be hazardous to public health SCONCº or the environment or u » r for the use of produced water;water»SCONC ;

t h g e l i N.

shall not require a permit for applying less h r i s than two hundred fifty gallons per day of private residential h , e h gray water originating from a residence for the resident's t u g e b l e e , gh household gardening, composting or landscape irrigation if:

n d d i = = o h (1) a constructed gray water distribution l ] b ,d i a º r system provides for overflow into the sewer system or on-site e r = t e w d m a n o wastewater treatment and disposal system;

(2)d am gray: water storage tank is covered to restrict access and to eliminate habitat for mosquitos or other e t 17 vectors;

wb lr e t º o t n = .229637.3AIC February 16, 2025 (11:52am) s k m e - 9 - e a n e d 18r (3)e l u [ A d (2) a gray water systemstorage tank is sitedcovered outsideto ofrestrict aaccess =and =to 19eliminate ahabitat lfor floodway;mosquitos or other vectors;

i(3) a e r 20 (4) gray water system is verticallysited separatedoutside atof a tfloodway; m m 21 least five feet above the ground water table;

d(4) r e 22 (5) gray water pressure piping is clearlyvertically cseparated eat sleast kfive 23feet identifiedabove asthe aground nonpotable water conduit;table;

e(5) a n b 24 (6) gray water ispressure usedpiping on the site where it is uclearly [identified generatedas anda doesnonpotable notwater runconduit; off the property lines;

.229637.3(6) - 9 - (7) gray water is appliedused inon athe mannersite thatwhere minimizesit theis potentialgenerated forand contactdoes withnot peoplerun oroff domesticthe pets;property lines;

(8)(7) ponding is prohibited, application of gray water is managedapplied toin minimizea standingmanner waterthat onminimizes the surfacepotential andfor tocontact ensurewith thatpeople theor hydraulicdomestic capacitypets; of the soil is not exceeded;

(9)(8) ponding is prohibited, application of gray water is managed to minimize standing water on the surface and h to ensure that the hydraulic capacity of the soil is not sprayed;g o t hr exceeded;

(10)g e i k (9) gray water is not dischargedsprayed; to a watercourse;

andh (11)r grayi waters use(10) withingray municipalitieswater oris countiesnot compliesdischarged with all applicable municipal or county ordinances enacted pursuant to Chaptera 3,h Article, 53t, NMSAwatercourse; 1978;

O.and e u g e b l e e h (11) gray water use within municipalities or n d d i = = o h counties complies with all applicable municipal or county l ] b ,d i a º e ordinances enacted pursuant to Chapter 3, Article 53 NMSA 1978;

shallr coordinatei application= proceduresr andt funding cycles for loans and grants from the federal government and from other sources, public or private, with the local e t 17 government division of the department of finance and w l n d 18m administration pursuant to the New Mexico Community Assistance = = 19 a ln Act;o O.

ishall acoordinate eapplication rprocedures 20and P.d m :

shallb adopte [regulations]d ruless toº beo a t mn m= 21.229637.3AIC administeredFebruary by16, the2025 department(11:52am) of environment for the d r e 22 [discharge, handling, transport, storage, recycling or c e s k 23m treatmente for- the10 disposition- of treated produced water, e a n be 24d includingr dispositione inl road construction maintenance, roadway u [ iceA ord dustfunding controlcycles orfor otherloans construction,and orgrants infrom the .229637.3federal -government 10and -from applicationother ofsources, treatedpublic producedor waterprivate, towith land,the forlocal activitiesgovernment unrelateddivision toof the exploration,department drilling, production, treatment or refinement of oilfinance orand gas]administration usepursuant ofto producedthe waterNew permittedMexico byCommunity theAssistance department.Act;

P.

shall adopt [regulations ] rules to be administered by the department of environment for the [discharge, handling, transport, storage, recycling or treatment for the disposition of treated produced water, including disposition in road construction maintenance, roadway ice or dust control or other construction, or in the application of treated produced water to land, for activities unrelated to the exploration, drilling, production, treatment or refinement of oil or gas] use of produced water permitted by the department.

h (1) discharge of produced water;

or u » r (2) use of produced water for agriculture, t h g e l i irrigation, potable water supplies, aquifer recharge, h r i s industrial processes, environmental restoration, road h , e h construction maintenance, roadway ice or dust control or other t u g e b l e e , gh construction;

and n d d i = = o h Q.

may adopt regulations to be administered by the l ] b ,d i a º r department of environment for surface water discharges." e r = t e w d m a n o SECTION 4.

Section 7-1-2 NMSA 1978 (being Laws 1965, Chapterd 248,m Section: 2, as amended) is amended to read:

b r e t º o t n = .229637.3AIC February 16, 2025 (11:52am) s k m e - 11 - e a n e d r e l u [ A d Chapter 248, Section 2, as amended) is amended to read:

APPLICABILITY.--The Tax Administration Act e t 17 applies to and governs:

w l n d 18 A.

the administration and enforcement of the = = 19 a l following taxes or tax acts as they now exist or may hereafter i a e r 20 be amended:

a t m m 21 (1) Income Tax Act;

d r e 22 (2) Withholding Tax Act;

c e s k 23 (3) Oil and Gas Proceeds and Pass-Through e a n b 24 Entity Withholding Tax Act;

u [ (4) Gross Receipts and Compensating Tax Act, .229637.3 - 11 - Interstate Telecommunications Gross Receipts Tax Act and Leased Vehicle Gross Receipts Tax Act;

(7) any municipal local option gross receipts h tax or municipal compensating tax;

g o t hr (8) any county local option gross receipts tax g e i k or county compensating tax;

h r i s (9) Special Fuels Supplier Tax Act;

h , t, (10) Gasoline Tax Act;

e u g e b l e e h (11) petroleum products loading fee, which fee n d d i = = o h shall be considered a tax for the purpose of the Tax l ] b ,d i a º e Administration Act;

r i = r t e w d m a n o (12) Alternative Fuel Tax Act;

(13)d Cigarettem Tax: Act;

b e d s º o t n = .229637.3AIC February 16, 2025 (11:52am) s k m e - 12 - e a n e d r e l u [ A d (13) Cigarette Tax Act;

e t 17 (15) Railroad Car Company Tax Act;

w l n d 18 (16) Investment Credit Act, rural job tax = = 19 a l credit, Laboratory Partnership with Small Business Tax Credit i a e r 20 Act, Technology Jobs and Research and Development Tax Credit a t m m 21 Act, Film Production Tax Credit Act, Affordable Housing Tax d r e 22 Credit Act and high-wage jobs tax credit;

c e s k 23 (17) Corporate Income and Franchise Tax Act;

e a n b 24 (18) Uniform Division of Income for Tax u [ Purposes Act;

.229637.3 - 12 - (19) Multistate Tax Compact;

(21) the telecommunications relay service surcharge imposed by Section 63-9F-11 NMSA 1978, which surcharge shall be considered a tax for the purposes of the Tax h Administration Act;

g o t hr (22) the Insurance Premium Tax Act;

g e i k (23) the Health Care Quality Surcharge Act;

h r i s (24) the Cannabis Tax Act;

and h , t, (25) the Health Care Delivery and Access Act;

e u g e b l e e h B.

the administration and enforcement of the n d d i = = o h following taxes, surtaxes, advanced payments or tax acts as l ] b ,d i a º e they now exist or may hereafter be amended:

r i = r t e w d m a n o (1) Resources Excise Tax Act;

(2)d Severancem Tax: Act;

b e d s º o t n = .229637.3AIC February 16, 2025 (11:52am) s k m e - 13 - e a n e d r e l u [ A d (2) Severance Tax Act;

e t 17 (4) Oil and Gas Severance Tax Act;

w l n d 18 (5) Oil and Gas Conservation Tax Act;

= = 19 a l (6) Oil and Gas Emergency School Tax Act;

i a e r 20 (7) Oil and Gas Ad Valorem Production Tax Act;

a t m m 21 (8) Natural Gas Processors Tax Act;

d r e 22 (9) Oil and Gas Production Equipment Ad c e s k 23 Valorem Tax Act;

e a n b 24 (10) Copper Production Ad Valorem Tax Act;

u [ (11) any advance payment required to be made .229637.3 - 13 - by any act specified in this subsection, which advance payment shall be considered a tax for the purposes of the Tax Administration Act;

(13) Natural Gas and Crude Oil Production h Incentive Act;

and g o t hr (14) intergovernmental production tax credit g e i k and intergovernmental production equipment tax credit;

h r i s C.

the administration and enforcement of the h , t, following taxes, surcharges, fees or acts as they now exist or e u g e b l e e h may hereafter be amended:

n d d i = = o h (1) Weight Distance Tax Act;

l ] b ,d i a º e (2) the workers' compensation fee authorized r i = r t e w d m a n o by Section 52-5-19 NMSA 1978, which fee shall be considered a taxd form purposes: of the Tax Administration Act;

b e d s º o t n = .229637.3AIC February 16, 2025 (11:52am) s k m e - 14 - e a n e d r e l u [ A d tax for purposes of the Tax Administration Act;

e t 17 (4) 911 emergency surcharge and the network w l n d 18 and database surcharge, which surcharges shall be considered = = 19 a l taxes for purposes of the Tax Administration Act;

i a e r 20 (5) the solid waste assessment fee authorized a t m m 21 by the Solid Waste Act, which fee shall be considered a tax for d r e 22 purposes of the Tax Administration Act;

c e s k 23 (6) the water conservation fee imposed by e a n b 24 Section 74-1-13 NMSA 1978, which fee shall be considered a tax u [ for the purposes of the Tax Administration Act;

[and][and .229637.3] - 14 - (7) the gaming tax imposed pursuant to the Gaming Control Act;

the administration and enforcement of all other laws, with respect to which the department is charged with h responsibilities pursuant to the Tax Administration Act, but u » r only to the extent that the other laws do not conflict with the t h g e l i Tax Administration Act." h r i s - 15 - 11h 13, 15 e h t 17u wg e b l e e , gh n d 18d i = = 19o ah l i] ab e,d ri 20 a tº m m 21 d r e 22r c= t e sw kd 23m e a n bo 24d um [: .229637.3

b r e t º o t n = .229637.3AIC February 16, 2025 (11:52am) s k m e e a n e d r e l u [ A d