45th legislature - STATE OF NEW MEXICO - first session, 2001
RELATING TO THE ENVIRONMENT; ENACTING THE DRYCLEANER ENVIRONMENTAL RESPONSE ACT; REGULATING THE RELEASE OF DRYCLEANING SOLVENTS INTO THE ENVIRONMENT; PROVIDING FOR A RESPONSE PROGRAM; PRECLUDING CERTAIN ACTIONS; CREATING THE DRYCLEANER ENVIRONMENTAL RESPONSE FUND; PROVIDING FOR EXPENDITURES FROM THE FUND; ENACTING A TAX ON THE GROSS RECEIPTS OF DRYCLEANING FACILITIES; PROVIDING PENALTIES; MAKING AN APPROPRIATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 11 of this act may be cited as the "Drycleaner Environmental Response Act".
Section 2. [NEW MATERIAL] DEFINITIONS.--As used in the Drycleaner Environmental Response Act:
A. "board" means the environmental improvement board;
B. "department" means the department of environment;
C. "drycleaning facility" means a facility that is or has been engaged in drycleaning operations, other than:
(1) a coin-operated drycleaning operation;
(2) a facility located on a United States military base;
(3) a uniform service or linen supply facility; or
(4) a correctional facility;
D. "drycleaning operations" means drycleaning of apparel and household fabrics for the general public using one or more drycleaning solvents;
E. "drycleaning solvent" means a non-aqueous formulation or product that is used as a primary cleaning agent in drycleaning operations;
F. "fund" means the drycleaner environmental response fund; and
G. "gross receipts" means the gross receipts reported by a drycleaning facility pursuant to the Gross Receipts and Compensating Tax Act.
Section 3. [NEW MATERIAL] ESTABLISHMENT OF STANDARDS.--No later than December 31, 2001, the board shall, by rule, establish standards for evaluating releases of drycleaning solvent at or from drycleaning facilities and the standardized methods and techniques necessary to adequately respond to the releases of drycleaning solvent. The rules:
A. shall, to the maximum extent practicable, be applicable to all drycleaning facilities in the state and shall be cost effective, reasonable and technically feasible;
B. may include requirements for measures to prevent the release of additional contaminants from contaminated soils into ground water; and
C. may require the extraction, treatment and reinjection of ground water contaminated with drycleaning solvent if:
(1) the ground water is or may reasonably be expected to be used as a drinking water supply source;
(2) the treatment of the ground water at the time it is extracted for purposes of supplying drinking water cannot be reasonably expected to adequately protect human health and the environment; and
(3) implementing and continuing the treatment is likely to achieve significant further reductions in levels of drycleaning solvent contamination in the ground water.
Section 4. [NEW MATERIAL] DRYCLEANER RESPONSE PROGRAM.--
A. Within six months after the establishment of standards pursuant to Section 3 of the Drycleaner Environmental Response Act, the board shall, by rule, enact a drycleaner response program that:
(1) is uniform for all drycleaning facilities in the state;
(2) incorporates the standards established pursuant to Section 3 of the Drycleaner Environmental Response Act as the sole criteria for determining what, if any, response action is necessary at drycleaning facilities; and
(3) includes a plan for expending money from the fund for:
(a) an initial assessment of drycleaning facilities and the degree of compliance with the standards;
(b) prioritizing those drycleaning facilities for which a response action is necessary; and
(c) taking the appropriate response action.
B. The rules adopted pursuant to Subsection A of this section shall adequately address releases and potential noncompliant releases of drycleaning solvents from drycleaning facilities. Except as provided in those rules, the department shall take no action relating to drycleaning facilities except in a situation where a release of drycleaning solvent presents an imminent and substantial hazard to human health.
Section 5. [NEW MATERIAL] PREVENTION MEASURES FOR DRYCLEANING FACILITIES.--
A. Effective July 1, 2002:
(1) all wastes generated at a drycleaning facility containing perchloroethylene shall be managed as hazardous wastes in accordance with state and federal law;
(2) no discharges of wastewater from drycleaning machines or of drycleaning solvent from drycleaning operations shall be made to a sanitary sewer, a septic tank or the waters of this state;
(3) all newly installed drycleaning systems using perchloroethylene shall be of the dry-to-dry type and be equipped with integral refrigerated condensers for the control of perchloroethylene emissions;
(4) each drycleaning facility shall:
(a) install dikes or other containment structures around each machine or item of equipment in which any drycleaning solvent is used in order to contain any leak, spill or release of drycleaning solvent; and
(b) to the extent practicable, seal or otherwise render impervious those portions of all diked floor surfaces upon which drycleaning solvent may leak, spill or otherwise be released; and
(5) perchloroethylene drycleaning solvent shall only be delivered to drycleaning facilities by means of closed, direct-coupled delivery systems.
B. Effective July 1, 2006, no drycleaning facility shall operate transfer-type drycleaning equipment using perchloroethylene.
C. The board may adopt rules necessary to carry out the intent of this section and may, by rule, adopt an alternative measure in lieu of a requirement contained in Subsection A of this section upon a finding that the alternative measure will provide equivalent protection for human health and the environment and will achieve equivalent prevention of contamination.
Section 6. [NEW MATERIAL] DRYCLEANER ENVIRONMENTAL RESPONSE FUND--EXPENDITURES.--
A. The "drycleaner environmental response fund" is created in the state treasury. The fund shall consist of distributions and appropriations made to the fund. All earnings from investment of the fund shall be credited to the fund. Money in the fund is appropriated to the department of environment to carry out provisions of the Drycleaner Environmental Response Act. Disbursements from the fund shall be by warrant drawn by the secretary of finance and administration pursuant to vouchers signed by the secretary of environment or his designee. Any unexpended or unencumbered balance in the fund at the end of any fiscal year shall not revert.
B. Expenditures from the fund shall be used exclusively for carrying out the provisions of the Drycleaner Environmental Response Act; provided that:
(1) no more than ten percent of each expenditure shall be used for overhead and administrative costs;
(2) for each response action taken pursuant to Section 4 of the Drycleaner Environmental Response Act, the owner of the drycleaning facility shall be liable of the first ten thousand dollars ($10,000) of the cost of the response action; and
(3) no more than one hundred thousand dollars ($100,000) shall be expended from the fund for all response actions taken at a single remediation site.
Section 7. [NEW MATERIAL] PRECLUSION OF ACTIONS.--
A. Except as provided elsewhere in the Drycleaning Environmental Response Act, no person who owns or operates, or formerly owned or operated, a drycleaning facility, or who otherwise could be liable as a result of any release of drycleaning solvent at or from a drycleaning facility, shall be subject to an administrative or judicial action brought by or on behalf of a person, including the state or its agencies, instrumentalities or political subdivisions, to recover damages or other costs associated with an action to assess, clean up, remediate or otherwise respond to a release or potential noncompliant release of drycleaning solvent at or from a drycleaning facility unless the person against whom the claim is brought owned or operated the facility after July 1, 2001 and:
(1) has failed to pay the drycleaning facility gross receipts tax due pursuant to Section 11 of the Drycleaner Environmental Response Act; or
(2) has failed to comply with a substantive state or federal law or rule relating to the operation of the drycleaning facility or the release or threatened release of drycleaning solvent.
B. Except as provided elsewhere in the Drycleaner Environmental Response Act, no person who owns or operates, or formerly owned or operated, a drycleaning facility, or who otherwise could be liable as a result of any release of drycleaning solvent at or from a drycleaning facility, shall be subject to an administrative or judicial action brought by or on behalf of a person, including the state or its agencies, instrumentalities or political subdivisions, to recover damages caused by a release of drycleaning solvent at or from a drycleaning facility unless the person against whom the claim is brought owned or operated the facility after July 1, 2001 and:
(1) has failed to pay tax due under Section 11 of the Drycleaner Environmental Response Act; or
(2) has failed to comply with a substantive state or federal law or rule relating to the operation of the drycleaning facility or the release or threatened release of drycleaning solvent.
C. Nothing in this section affects the liability of a person who, in the course of delivering or supplying drycleaning solvent to a drycleaning facility, violates the provisions of Paragraph (5) of Subsection A of Section 5 of the Drycleaner Environmental Response Act.
Section 8. [NEW MATERIAL] DEPARTMENT--DUTIES--CIVIL PENALTIES.--
A. The department is responsible for the administration and enforcement of the provisions of the Drycleaner Environmental Response Act and of all rules adopted by the board pursuant to that act. The department is delegated all authority necessary and appropriate to carry out its responsibilities.
B. The department shall establish and maintain a list of active and inactive drycleaning facilities in this state.
C. Except for violations of the Tax Administration Act related to taxes due or paid pursuant to Section 11 of the Drycleaner Environmental Response Act, a person who violates a provision of the Drycleaner Environmental Response Act or a rule adopted pursuant to that act shall be subject to a civil penalty not to exceed five hundred dollars ($500) for each offense. All actions to recover the penalties provided for in this section may be brought by the department before a district court. The department may bring an action in the district court seeking injunctive relief to enforce provisions of the Drycleaner Environmental Response Act.
Section 9. [NEW MATERIAL] DRYCLEANER ADVISORY COMMITTEE.--The secretary of environment shall appoint a "drycleaner advisory committee" composed of three or more representatives from the drycleaning industry in New Mexico. The committee shall advise the department and the board on all matters relating to the adoption of rules pursuant to the Drycleaner Environmental Response Act.
Section 10. [NEW MATERIAL] STATE LIABILITY--EXEMPTION FROM NEW MEXICO INSURANCE CODE.--
A. Nothing in the Drycleaner Environmental Response Act establishes or creates any liability or responsibility on the part of the department or the state to pay the costs of a response action from any source other than the fund, in the manner described, nor shall the department or the state have any liability or responsibility to make any payments for response action costs if the balance in the fund is insufficient to cover those costs.
B. Nothing in the Drycleaner Environmental Response Act creates an insurance company or an insurance fund. The fund is not subject to the provisions of the New Mexico Insurance Code.
Section 11. [NEW MATERIAL] DRYCLEANING FACILITY GROSS RECEIPTS TAX.--
A. An excise tax is imposed on the gross receipts of any person operating a drycleaning facility in New Mexico. Until adjusted pursuant to Subsection B of this section, the rate of the tax shall be two percent. The tax imposed by this section shall be referred to as the "drycleaning facility gross receipts tax".
B. On March 31 of each year, the secretary of environment shall certify to the secretary of taxation and revenue the amount of the unexpended or unencumbered balance remaining in the fund. The rate of the tax for the succeeding fiscal year shall be as follows:
(1) if the amount certified is less than two million dollars ($2,000,000), the tax rate shall be two percent;
(2) if the amount certified is two million dollars ($2,000,000) or more but less than three million dollars ($3,000,000), the tax rate shall be one percent; and
(3) if the amount certified is three million dollars ($3,000,000) or more, the tax rate shall be zero.
C. The drycleaning facility gross receipts tax is to be paid on or before the twenty-fifth day of the month following the month in which the taxable event occurs.
D. The taxation and revenue department shall administer and enforce the collection of the drycleaning facility gross receipts tax, and the Tax Administration Act applies to the administration and enforcement of the tax.
Section 12. A new section of the Tax Administration Act is enacted to read:
"[NEW MATERIAL] DISTRIBUTION--DRYCLEANER ENVIRONMENTAL RESPONSE FUND.--Pursuant to Section 7-1-6.1 NMSA 1978, a distribution shall be made to the drycleaner environmental response fund in an amount equal to the net receipts attributable to the drycleaning facility gross receipts tax."
Section 13. Section 7-9-3 NMSA 1978 (being Laws 1978, Chapter 46, Section 1, as amended by Laws 2000, Chapter 84, Section 1 and also by Laws 2000, Chapter 101, Section 1) is amended to read:
"7-9-3. DEFINITIONS.--As used in the Gross Receipts and Compensating Tax Act:
A. "department" means the taxation and revenue department, the secretary of taxation and revenue or any employee of the department exercising authority lawfully delegated to that employee by the secretary;
B. "buying" or "selling" means any transfer of property for consideration or any performance of service for consideration;
C. "construction" means building, altering, repairing or demolishing in the ordinary course of business any:
(1) road, highway, bridge, parking area or related project;
(2) building, stadium or other structure;
(3) airport, subway or similar facility;
(4) park, trail, athletic field, golf course or similar facility;
(5) dam, reservoir, canal, ditch or similar facility;
(6) sewerage or water treatment facility, power generating plant, pump station, natural gas compressing station, gas processing plant, coal gasification plant, refinery, distillery or similar facility;
(7) sewerage, water, gas or other pipeline;
(8) transmission line;
(9) radio, television or other tower;
(10) water, oil or other storage tank;
(11) shaft, tunnel or other mining appurtenance;
(12) microwave station or similar facility;
[or]
(13) retaining wall, wall, fence gate or similar structure; or
[(13)] (14) similar work;
"construction" also means:
[(14)] (15) leveling or clearing land;
[(15)] (16) excavating earth;
[(16)] (17) drilling wells of any type,
including seismograph shot holes or core drilling; or
[(17)] (18) similar work;
D. "financial corporation" means any savings and loan association or any incorporated savings and loan company, trust company, mortgage banking company, consumer finance company or other financial corporation;
E. "engaging in business" means carrying on or causing to be carried on any activity with the purpose of direct or indirect benefit, except that:
(1) "engaging in business" does not include having a world wide web site as a third-party content provider on a computer physically located in New Mexico but owned by another nonaffiliated person; and
(2) "engaging in business" does not include using a nonaffiliated third-party call center to accept and process telephone or electronic orders of tangible personal property or licenses primarily from non-New Mexico buyers, which orders are forwarded to a location outside New Mexico for filling;
F. "gross receipts" means the total amount of money or the value of other consideration received from selling property in New Mexico, from leasing property employed in New Mexico, from selling services performed outside New Mexico the product of which is initially used in New Mexico or from performing services in New Mexico. In an exchange in which the money or other consideration received does not represent the value of the property or service exchanged, "gross receipts" means the reasonable value of the property or service exchanged.
(1) "Gross receipts" includes:
(a) any receipts from sales of tangible personal property handled on consignment;
(b) the total commissions or fees derived from the business of buying, selling or promoting the purchase, sale or leasing, as an agent or broker on a commission or fee basis, of any property, service, stock, bond or security;
(c) amounts paid by members of any cooperative association or similar organization for sales or leases of personal property or performance of services by such organization; and
(d) amounts received from transmitting messages or conversations by persons providing telephone or telegraph services.
(2) "Gross receipts" excludes:
(a) cash discounts allowed and taken;
(b) New Mexico gross receipts tax, governmental gross receipts tax, drycleaning facility gross receipts tax and leased vehicle gross receipts tax payable on transactions for the reporting period;
(c) taxes imposed pursuant to the provisions of any local option gross receipts tax that is payable on transactions for the reporting period;
(d) any gross receipts or sales taxes imposed by an Indian nation, tribe or pueblo; provided that the tax is approved, if approval is required by federal law or regulation, by the secretary of the interior of the United States; and provided further that the gross receipts or sales tax imposed by the Indian nation, tribe or pueblo provides a reciprocal exclusion for gross receipts, sales or gross receipts-based excise taxes imposed by the state or its political subdivisions;
(e) any type of time-price differential; and
(f) amounts received solely on behalf of another in a disclosed agency capacity.
(3) When the sale of property or service is made under any type of charge, conditional or time-sales contract or the leasing of property is made under a leasing contract, the seller or lessor may elect to treat all receipts, excluding any type of time-price differential, under such contracts as gross receipts as and when the payments are actually received. If the seller or lessor transfers his interest in any such contract to a third person, the seller or lessor shall pay the gross receipts tax upon the full sale or leasing contract amount, excluding any type of time-price differential;
G. "manufacturing" means combining or processing components or materials to increase their value for sale in the ordinary course of business, but does not include construction;
H. "person" means:
(1) an individual, estate, trust, receiver, cooperative association, club, corporation, company, firm, partnership, limited liability company, limited liability partnership, joint venture, syndicate or other entity, including any gas, water or electric utility owned or operated by a county, municipality or other political subdivision of the state; or
(2) a national, federal, state, Indian or other governmental unit or subdivision, or an agency, department or instrumentality of any of the foregoing;
I. "property" means real property, tangible personal property, licenses, franchises, patents, trademarks and copyrights. Tangible personal property includes electricity and manufactured homes;
J. "leasing" means an arrangement whereby, for a consideration, property is employed for or by any person other than the owner of the property, except that the granting of a license to use property is the sale of a license and not a lease;
K. "service" means all activities engaged in for other persons for a consideration, which activities involve predominantly the performance of a service as distinguished from selling or leasing property. "Service" includes activities performed by a person for its members or shareholders. In determining what is a service, the intended use, principal objective or ultimate objective of the contracting parties shall not be controlling. "Service" includes construction activities and all tangible personal property that will become an ingredient or component part of a construction project. Such tangible personal property retains its character as tangible personal property until it is installed as an ingredient or component part of a construction project in New Mexico. However, sales of tangible personal property that will become an ingredient or component part of a construction project to persons engaged in the construction business are sales of tangible personal property;
L. "use" or "using" includes use, consumption or storage other than storage for subsequent sale in the ordinary course of business or for use solely outside this state;
M. "secretary" means the secretary of taxation and revenue or the secretary's delegate;
N. "manufactured home" means a movable or portable housing structure for human occupancy that exceeds either a width of eight feet or a length of forty feet constructed to be towed on its own chassis and designed to be installed with or without a permanent foundation;
O. "initial use" or "initially used" means the first employment for the intended purpose and does not include the following activities:
(1) observation of tests conducted by the performer of services;
(2) participation in progress reviews, briefings, consultations and conferences conducted by the performer of services;
(3) review of preliminary drafts, drawings and other materials prepared by the performer of the services;
(4) inspection of preliminary prototypes developed by the performer of services; or
(5) similar activities;
P. "research and development services" means an activity engaged in for other persons for consideration, for one or more of the following purposes:
(1) advancing basic knowledge in a recognized field of natural science;
(2) advancing technology in a field of technical endeavor;
(3) the development of a new or improved product, process or system with new or improved function, performance, reliability or quality, whether or not the new or improved product, process or system is offered for sale, lease or other transfer;
(4) the development of new uses or applications for an existing product, process or system, whether or not the new use or application is offered as the rationale for purchase, lease or other transfer of the product, process or system;
(5) analytical or survey activities incorporating technology review, application, trade-off study, modeling, simulation, conceptual design or similar activities, whether or not offered for sale, lease or other transfer; or
(6) the design and development of prototypes or the integration of systems incorporating advances, developments or improvements included in Paragraphs (1) through (5) of this subsection;
Q. "local option gross receipts tax" means a tax authorized to be imposed by a county or municipality upon the taxpayer's gross receipts and required to be collected by the department at the same time and in the same manner as the gross receipts tax; "local option gross receipts tax" includes the taxes imposed pursuant to the Municipal Local Option Gross Receipts Taxes Act, Supplemental Municipal Gross Receipts Tax Act, County Local Option Gross Receipts Taxes Act, Local Hospital Gross Receipts Tax Act, County Correctional Facility Gross Receipts Tax Act and such other acts as may be enacted authorizing counties or municipalities to impose taxes on gross receipts, which taxes are to be collected by the department; and
R. "prescription drugs" means insulin and substances that are:
(1) dispensed by or under the supervision of a licensed pharmacist or by a physician or other person authorized under state law to do so;
(2) prescribed for a specified person by a person authorized under state law to prescribe the substance; and
(3) subject to the restrictions on sale contained in Subparagraph 1 of Subsection (b) of 21 USCA 353."
Section 14. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2001.