HOUSE BILL 784
49th legislature - STATE OF NEW MEXICO - first session, 2009
INTRODUCED BY
Keith J. Gardner
AN ACT
RELATING TO TAXATION; PROVIDING CORPORATE AND PERSONAL INCOME TAX CREDITS FOR BIOGAS FUEL PRODUCTION FACILITIES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. A new section of the Income Tax Act is enacted to read:
"[NEW MATERIAL] BIOGAS FUEL PRODUCTION INCOME TAX CREDIT.--
A. The tax credit that may be claimed pursuant to this section may be referred to as the "biogas fuel production income tax credit".
B. A taxpayer who holds an interest in a qualified biogas fuel production facility and who files an individual New Mexico income tax return may claim a biogas fuel production income tax credit in an amount equal to no more than two dollars ninety-two cents ($2.92) for every one million British thermal units of biogas produced, subject to the limitations imposed in this section.
C. To claim the biogas fuel production income tax credit, a taxpayer shall submit with the taxpayer's New Mexico income tax return a certificate of eligibility from the energy, minerals and natural resources department stating that the facility in which the taxpayer holds a proportionate interest is a qualified biogas fuel production facility, the verifiable production amount of the facility for the taxable year and that the taxpayer may be eligible for biogas fuel production tax credits. The energy, minerals and natural resources department shall consider applications for certificates of eligibility in the order received. The taxation and revenue department shall determine the amount of the biogas fuel production income tax credit for which the taxpayer may apply.
D. A taxpayer eligible for a biogas fuel production income tax credit shall remain eligible to receive the credit for ten consecutive years, beginning on the date the qualified biogas fuel production facility begins producing biogas fuel. Once a taxpayer has been granted a biogas fuel production income tax credit for a given facility, that taxpayer shall be allowed to keep the facility's original date of application for tax credits for that facility until either the facility goes out of production for six months or the facility's ten-year eligibility has expired.
E. A husband and wife who file separate returns for a taxable year in which they could have filed a joint return may each claim only one-half of the biogas fuel production income tax credit that would have been allowed on a joint return.
F. A taxpayer who otherwise qualifies and claims a biogas fuel production income tax credit and who is a member of a partnership or owns interest in an entity that is a qualified biogas fuel production facility may claim the biogas fuel production income tax credit only in relation to the taxpayer's interest in the partnership or entity. The total biogas fuel production income tax credit claimed by all members of the partnership or all of the owners of the entity shall not exceed the proportionate interest allowed by the department for that partnership or entity. The total amount of all biogas fuel production tax credits claimed shall not exceed the total amount determined by the department to be allowable pursuant to this section and the Corporate Income and Franchise Tax Act.
G. If the biogas fuel production income tax credit exceeds the amount of the taxpayer's tax liabilities pursuant to the Income Tax Act in the taxable year in which it is claimed, the balance of the unpaid credit may be carried forward for five years. The biogas fuel production income tax credit is not refundable.
H. A taxpayer claiming the biogas fuel production income tax credit pursuant to this section is ineligible for credits pursuant to any other credit that may be taken pursuant to the Income Tax Act or the Corporate Income and Franchise Tax Act for the same facility.
I. The aggregate amount of all biogas fuel production tax credits that may be claimed with respect to all qualified biogas fuel production facilities shall not exceed five hundred thousand dollars ($500,000) per taxable year.
J. As used in this section:
(1) "biogas" means a gas that is derived by processing a qualified energy source and that contains at least fifty percent methane;
(2) "biogas fuel production tax credit" means the biogas fuel production income tax credit and the biogas fuel production corporate income tax credit;
(3) "interest in a qualified biogas fuel production facility" means title to a qualified biogas fuel production facility; an ownership interest in a business or entity that is taxed for federal income tax purposes as a partnership that holds title to qualified biogas fuel production facility; or an ownership interest, through one or more intermediate entities that are each taxed for federal income tax purposes as a partnership, in a business that holds title to a qualified biogas fuel production facility;
(4) "proportionate interest" means a taxpayer's direct and indirect ownership of an interest in a qualified biogas fuel production facility, provided that
the total of all interests of taxpayers claiming biogas fuel production tax credits for the same qualified biogas fuel production facility shall not exceed one hundred percent;
(5) "qualified biogas fuel production facility" means a facility located in New Mexico that begins production on or before January 1, 2013 and:
(a) uses anaerobic digesters, gasification or other biological, chemical or thermal processes to convert a qualified energy source into biogas; and
(b) the biogas output of which is: 1) marketed through interconnection with a natural gas distribution or transmission pipeline; or 2) reasonably expected to be used in a quantity sufficient to offset the consumption of five thousand million British thermal units annually of commercially marketed fuel derived from coal, crude oil, natural gas, propane or other fossil fuels;
(6) "qualified energy source" means:
(a) manure of agricultural livestock, including litter, wood shavings, straw, rice hulls, bedding material and other materials incidentally collected with the manure; or
(b) any nonhazardous, cellulosic or other organic agricultural or food industry byproduct or waste material that is derived from renewable biomass, wastes or byproducts from fermentation processes, ethanol production, biodiesel production, slaughter of agricultural livestock, food production, food processing or food service, or other organic wastes, byproducts or sources, but does not include methane collected in or from landfills or landfill waste; and
(7) "renewable biomass" means feed grains, other agricultural commodities, algae or waste material, such as crop residue, animal waste and byproducts, including fats, oils and greases, and food waste."
Section 2. A new section of the Corporate Income and Franchise Tax Act is enacted to read:
"[NEW MATERIAL] BIOGAS FUEL PRODUCTION CORPORATE INCOME TAX CREDIT.--
A. The tax credit that may be claimed pursuant to this section may be referred to as the "biogas fuel production corporate income tax credit".
B. A taxpayer that holds an interest in a qualified biogas fuel production facility and that files a New Mexico corporate income tax return may claim a biogas fuel production corporate income tax credit in an amount equal to no more than two dollars ninety-two cents ($2.92) for every one million British thermal units of biogas produced, subject to the limitations imposed in this section.
C. To claim the biogas fuel production corporate income tax credit, a taxpayer shall submit with the taxpayer's New Mexico corporate income tax return a certificate of eligibility from the energy, minerals and natural resources department stating that the facility in which the taxpayer holds a proportionate interest is a qualified biogas fuel production facility, the verifiable production amount of the facility for the taxable year and that the taxpayer may be eligible for biogas fuel production tax credits. The energy, minerals and natural resources department shall consider applications for certificates of eligibility in the order received. The taxation and revenue department shall determine the amount of biogas fuel production corporate income tax credit for which the taxpayer may apply.
D. A taxpayer eligible for a biogas fuel production corporate income tax credit shall remain eligible to receive the credit for ten consecutive years, beginning on the date the qualified biogas fuel production facility begins producing biogas fuel. Once a taxpayer has been granted a biogas fuel production corporate income tax credit for a given facility, that taxpayer shall be allowed to keep the facility's original date of application for tax credits for that facility until either the facility goes out of production for six months or the facility's ten-year eligibility has expired.
E. A taxpayer that otherwise qualifies and claims a biogas fuel production corporate income tax credit and that is a member of a partnership or owns interest in an entity that is a qualified biogas fuel production facility may claim the biogas fuel production corporate income tax credit only in relation to the taxpayer's interest in the partnership or entity. The total biogas fuel production corporate income tax credit claimed by all members of the partnership or all of the owners of the entity shall not exceed the proportionate interest allowed by the department for that partnership or entity. The total amount of all biogas fuel production tax credits claimed shall not exceed the total amount determined by the department to be allowable pursuant to this section and the Income Tax Act.
F. If the biogas fuel production corporate income tax credit exceeds the amount of the taxpayer's tax liabilities pursuant to the Corporate Income and Franchise Tax Act in the taxable year in which it is claimed, the balance of the unpaid credit may be carried forward for five years. The biogas fuel production corporate income tax credit is not refundable.
G. A taxpayer claiming the biogas fuel production corporate income tax credit pursuant to this section is ineligible for credits pursuant to any other credit that may be taken pursuant to the Corporate Income and Franchise Tax Act or Income Tax Act for the same facility.
H. The aggregate amount of all biogas fuel production tax credits that may be claimed with respect to all qualified biogas fuel production facilities shall not exceed five hundred thousand dollars ($500,000) per taxable year.
I. As used in this section:
(1) "biogas" means a gas that is derived by processing a qualified energy source and that contains at least fifty percent methane;
(2) "biogas fuel production tax credit" means the biogas fuel production income tax credit and the biogas fuel production corporate income tax credit;
(3) "interest in a qualified biogas fuel production facility" means title to a qualified biogas fuel production facility; an ownership interest in a business or entity that is taxed for federal income tax purposes as a partnership that holds title to a qualified biogas fuel production facility; or an ownership interest, through one or more intermediate entities that are each taxed for federal income tax purposes as a partnership, in a business that holds title to a qualified biogas fuel production facility;
(4) "proportionate interest" means a taxpayer's direct and indirect ownership of an interest in a qualified biogas fuel production facility, provided that
the total of all interests of taxpayers claiming biogas fuel production tax credits for the same qualified biogas fuel production facility shall not exceed one hundred percent;
(5) "qualified biogas fuel production facility" means a facility located in New Mexico that begins production on or before January 1, 2013 and:
(a) uses anaerobic digesters, gasification or other biological, chemical or thermal processes to convert a qualified energy source into biogas; and
(b) the biogas output of which is: 1) marketed through interconnection with a natural gas distribution or transmission pipeline; or 2) reasonably expected to be used in a quantity sufficient to offset the consumption of five thousand million British thermal units annually of commercially marketed fuel derived from coal, crude oil, natural gas, propane or other fossil fuels;
(6) "qualified energy source" means:
(a) manure of agricultural livestock, including litter, wood shavings, straw, rice hulls, bedding material and other materials incidentally collected with the manure; or
(b) any nonhazardous, cellulosic or other organic agricultural or food industry byproduct or waste material that is derived from renewable biomass, wastes or byproducts from fermentation processes, ethanol production, biodiesel production, slaughter of agricultural livestock, food production, food processing or food service, or other organic wastes, byproducts or sources, but does not include methane collected in or from landfills or landfill waste; and
(7) "renewable biomass" means feed grains, other agricultural commodities, algae or waste material, such as crop residue, animal waste and byproducts, including fats, oils and greases, and food waste."
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