New Mexico 2025 Regular Session

New Mexico House Bill HB538 Compare Versions

Only one version of the bill is available at this time.

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28	28	HOUSE BILL 538
29	29	57
30	30	TH LEGISLATURE
31	31	-
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33	33	STATE
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35	35	OF
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37	37	NEW
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39	39	MEXICO
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41	41	-
42	42	FIRST SESSION
43	43	,
44	44
45	45	2025
46	46	INTRODUCED BY
47	47	Meredith A. Dixon and Nathan P. Small and Mark Duncan
48	48	and William E. Sharer
49	49	AN ACT
50	50	RELATING TO TAXATION; CREATING THE INDUSTRIAL DECARBONIZATION
51	51	PRODUCTION CORPORATE INCOME TAX CREDIT; CREATING THE INDUSTRIAL
52	52	DECARBONIZATION INVESTMENT CORPORATE INCOME TAX CREDIT.
53	53	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
54	54	SECTION 1. A new section of the Corporate Income and
55	55	Franchise Tax Act is enacted to read:
56	56	"[NEW MATERIAL] INDUSTRIAL DECARBONIZATION PRODUCTION
57	57	CORPORATE INCOME TAX CREDIT.--
58	58	A. Prior to taxable year 2031, a taxpayer that owns
59	59	or operates a qualified industrial facility and reduces the net
60	60	carbon dioxide equivalent emissions of the product produced by
61	61	the facility to at least forty percent below the industrial
62	62	benchmark of a comparable product in the same product category
63	63	may claim a tax credit against the taxpayer's tax liability
64	64	.229740.3 underscored material = new
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91	91	imposed pursuant to the Corporate Income and Franchise Tax Act
92	92	in an amount provided in Subsection B of this section. The tax
93	93	credit provided in this section may be referred to as the
94	94	"industrial decarbonization production corporate income tax
95	95	credit".
96	96	B. The industrial decarbonization production
97	97	corporate income tax credit shall be in an amount equal to
98	98	eighty-five dollars ($85.00) per metric ton of net carbon
99	99	dioxide equivalent that is reduced below the industrial
100	100	benchmark in a taxable year, up to a maximum of ten million
101	101	dollars ($10,000,000) per qualified industrial facility per
102	102	taxable year; provided that if the department of energy
103	103	determines that a qualified industrial facility has a high
104	104	likelihood of creating new jobs, bringing significant new
105	105	investment to the state and reducing the net carbon dioxide
106	106	equivalent emissions of the product produced by the facility to
107	107	at least fifty percent below the industrial benchmark of a
108	108	comparable product in the same product category, that
109	109	department may certify up to fifteen million dollars
110	110	($15,000,000) per facility per taxable year.
111	111	C. A taxpayer that seeks to claim the tax credit
112	112	provided by this section shall apply for certification of
113	113	eligibility from the department of environment on forms and in
114	114	the manner prescribed by that department. The application
115	115	shall include evidence that the taxpayer owns or operates a
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144	144	qualified industrial facility and reduces the net carbon
145	145	dioxide equivalent emissions of the product produced by the
146	146	facility to at least forty percent below the industrial
147	147	benchmark of carbon dioxide equivalent emissions of a
148	148	comparable product in the same product category. The evidence
149	149	shall include:
150	150	(1) a life cycle assessment of the facility's
151	151	production prepared and documented in conformance with the
152	152	requirements of Section 45Q of the Internal Revenue Code, as
153	153	that section may be amended or renumbered, and standards of the
154	154	international organization for standardization;
155	155	(2) an industrial benchmark of carbon dioxide
156	156	equivalent emissions of a comparable product in the same
157	157	product category as the taxpayer's product; and
158	158	(3) any other evidence required by the
159	159	department of environment.
160	160	D. If the department of environment determines that
161	161	a taxpayer meets the requirements to claim a tax credit
162	162	pursuant to this section, that department shall issue to the
163	163	taxpayer a dated certificate of eligibility providing the
164	164	amount of the tax credit for which the taxpayer is eligible and
165	165	the taxable year in which the credit may be claimed. The
166	166	department of environment shall provide the taxation and
167	167	revenue department with the certificates of eligibility issued
168	168	pursuant to this subsection in an electronic format at
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197	197	regularly agreed-upon intervals.
198	198	E. A taxpayer shall not be eligible to claim the
199	199	industrial decarbonization production corporate income tax
200	200	credit if the taxpayer claims in the same taxable year for the
201	201	same facility a federal carbon dioxide sequestration tax credit
202	202	pursuant to Section 45Q of the Internal Revenue Code, as that
203	203	section may be amended or renumbered.
204	204	F. The total annual aggregate amount of industrial
205	205	decarbonization production corporate income tax credits that
206	206	may be certified in a calendar year is thirty million dollars
207	207	($30,000,000) in 2026, fifty million dollars ($50,000,000) in
208	208	2027 and one hundred million dollars ($100,000,000) in each
209	209	year thereafter. Completed applications shall be considered in
210	210	the order received. The department of environment shall
211	211	publish on the department of environment's website on a regular
212	212	basis the number of industrial decarbonization production
213	213	corporate income tax credits that have been certified in each
214	214	calendar year.
215	215	G. To receive a tax credit provided by this
216	216	section, a taxpayer shall claim the credit on forms and in the
217	217	manner prescribed by the department within twelve months
218	218	following the calendar year in which the certificate of
219	219	eligibility was issued.
220	220	H. A certificate of eligibility issued pursuant to
221	221	this section may either be submitted by the taxpayer with that
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250	250	taxpayer's return or be sold, exchanged or otherwise
251	251	transferred to another taxpayer for the full value of the
252	252	credit. The parties to such a transaction shall notify the
253	253	department of the sale, exchange or transfer within ten days of
254	254	the sale, exchange or transfer in a format prescribed by the
255	255	department.
256	256	I. That portion of an industrial decarbonization
257	257	production corporate income tax credit that exceeds a
258	258	taxpayer's tax liability in the taxable year in which the tax
259	259	credit is claimed shall not be refunded but may be carried
260	260	forward for three consecutive taxable years.
261	261	J. The credit provided by this section shall be
262	262	included in the tax expenditure budget pursuant to Section
263	263	7-1-84 NMSA 1978, including the total annual aggregate cost of
264	264	the credit.
265	265	K. As used in this section:
266	266	(1) "industrial benchmark" means the average
267	267	carbon dioxide equivalent emissions on a per unit basis of a
268	268	product system from a federally recognized and used metric,
269	269	such as the greenhouse gases, regulated emissions and energy
270	270	use in technologies life cycle assessment suite of models;
271	271	(2) "qualified industrial facility" means an
272	272	industrial facility located in New Mexico that produces:
273	273	(a) concrete, cement, asphalt, iron,
274	274	steel, glass, hydrogen or a critical mineral as designated by
275	275	.229740.3
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303	303	the United States department of the interior; or
304	304	(b) a product through refinement; and
305	305	(3) "refinement" means a chemical or physical
306	306	process to remove impurities from a substance or form."
307	307	SECTION 2. A new section of the Corporate Income and
308	308	Franchise Tax Act is enacted to read:
309	309	"[NEW MATERIAL] INDUSTRIAL DECARBONIZATION INVESTMENT
310	310	CORPORATE INCOME TAX CREDIT.--
311	311	A. Prior to taxable year 2031, a taxpayer that owns
312	312	or operates a qualified industrial facility that makes
313	313	qualified expenditures for the facility may claim a tax credit
314	314	against the taxpayer's tax liability imposed pursuant to the
315	315	Corporate Income and Franchise Tax Act in an amount provided in
316	316	Subsection B of this section. The tax credit provided in this
317	317	section may be referred to as the "industrial decarbonization
318	318	investment corporate income tax credit".
319	319	B. The industrial decarbonization investment
320	320	corporate income tax credit shall be in an amount equal to the
321	321	lesser of ten percent of the cost of qualified expenditures
322	322	made by the taxpayer in a taxable year for a qualified
323	323	industrial facility or five million dollars ($5,000,000) per
324	324	facility; provided that if the department of environment
325	325	determines a qualified industrial facility has a high
326	326	likelihood of creating new jobs, bringing significant new
327	327	investment to the state and reducing the net carbon dioxide
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356	356	equivalent emissions of the product produced by the facility to
357	357	at least fifty percent below the industrial benchmark of a
358	358	comparable product in the same product category, that
359	359	department may certify up to seven million five hundred
360	360	thousand dollars ($7,500,000) per facility per taxable year.
361	361	C. A taxpayer that seeks to claim the tax credit
362	362	provided by this section shall, within twelve months of
363	363	claiming an industrial decarbonization production corporate
364	364	income tax credit provided pursuant to Section 1 of this 2025
365	365	act, apply for certification from the department of environment
366	366	on forms and in the manner prescribed by that department. An
367	367	application for certification shall include information
368	368	required by the department of environment to determine
369	369	eligibility for the tax credit, including evidence that the
370	370	taxpayer is a qualified industrial facility, substantiating
371	371	qualified expenditures and that the equipment purchased with
372	372	the qualified expenditures was installed and a certificate of
373	373	eligibility for an industrial decarbonization production
374	374	corporate income tax credit provided for the same taxpayer and
375	375	facility pursuant to Section 1 of this 2025 act.
376	376	D. If the department of environment determines that
377	377	a taxpayer meets the requirements of this section, that
378	378	department shall issue to the taxpayer a dated certificate of
379	379	eligibility providing the amount of the tax credit for which
380	380	the taxpayer is eligible and the taxable year in which the
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409	409	credit may be claimed. Only one certificate of eligibility
410	410	shall be issued for all activities performed at a qualified
411	411	industrial facility, regardless of ownership of the facility.
412	412	The department of environment shall provide the taxation and
413	413	revenue department with the certificates of eligibility issued
414	414	pursuant to this subsection in an electronic format at
415	415	regularly agreed-upon intervals.
416	416	E. The total annual aggregate amount of industrial
417	417	decarbonization investment corporate income tax credits that
418	418	may be certified in a calendar year is thirty million dollars
419	419	($30,000,000) in 2026, fifty million dollars ($50,000,000) in
420	420	2027 and one hundred million dollars ($100,000,000) in each
421	421	year thereafter. Completed applications shall be considered in
422	422	the order received. The department of environment shall
423	423	publish on the department of environment's website on a regular
424	424	basis the number of industrial decarbonization investment
425	425	corporate income tax credits that have been certified in each
426	426	calendar year.
427	427	F. To receive a tax credit provided by this
428	428	section, a taxpayer shall claim the credit on forms and in the
429	429	manner prescribed by the department within twelve months
430	430	following the calendar year in which the certificate of
431	431	eligibility was issued.
432	432	G. A certificate of eligibility issued pursuant to
433	433	this section may either be submitted by the taxpayer with that
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462	462	taxpayer's return or be sold, exchanged or otherwise
463	463	transferred to another taxpayer for the full value of the
464	464	credit. The parties to such a transaction shall notify the
465	465	department of the sale, exchange or transfer within ten days of
466	466	the sale, exchange or transfer in a format prescribed by the
467	467	department.
468	468	H. That portion of an industrial decarbonization
469	469	investment corporate income tax credit that exceeds a
470	470	taxpayer's tax liability in the taxable year in which the tax
471	471	credit is claimed shall not be refunded but may be carried
472	472	forward for three consecutive taxable years.
473	473	I. The credit provided by this section shall be
474	474	included in the tax expenditure budget pursuant to Section
475	475	7-1-84 NMSA 1978, including the total annual aggregate cost of
476	476	the credit.
477	477	J. As used in this section:
478	478	(1) "industrial benchmark" means the typical
479	479	carbon dioxide equivalent emissions of a product system from a
480	480	federally recognized and used metric, such as the greenhouse
481	481	gases, regulated emissions, and energy use in technologies life
482	482	cycle assessment suite of models;
483	483	(2) "qualified expenditure" means an
484	484	expenditure made on or after January 1, 2025 and prior to
485	485	January 1, 2031 for the purchase of that portion of the costs
486	486	of equipment dedicated to and necessary for producing a
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514	514	qualified industrial facility's product in a way that reduces
515	515	the product's net carbon dioxide equivalent emissions;
516	516	(3) "qualified industrial facility" means an
517	517	industrial facility located in New Mexico that produces:
518	518	(a) concrete, cement, asphalt, iron,
519	519	steel, glass, hydrogen or a critical mineral as designated by
520	520	the United States department of the interior; or
521	521	(b) a product through refinement; and
522	522	(4) "refinement" means a chemical or physical
523	523	process to remove impurities from a substance or form."
524	524	SECTION 3. DELAYED REPEAL.--Sections 1 and 2 of this act
525	525	are repealed effective January 1, 2033.
526	526	SECTION 4. APPLICABILITY.--The provisions of this act
527	527	apply to taxable years beginning on or after January 1, 2025.
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