SENATE BILL 99

57th legislature - STATE OF NEW MEXICO - first session, 2025

INTRODUCED BY

Antoinette Sedillo Lopez

AN ACT

RELATING TO CLEAN TRANSPORTATION FUELS; PROHIBITING TRANSPORTATION FUELS FROM BEING ASSIGNED A CARBON INTENSITY VALUE OF LESS THAN ZERO.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. Section 74-1-18 NMSA 1978 (being Laws 2024, Chapter 54, Section 4) is amended to read:

     "74-1-18. CLEAN TRANSPORTATION FUEL STANDARD PROGRAM--RULES.--

          A. The board shall promulgate rules to implement a clean transportation fuel standard program no later than July 1, 2026.

          B. Prior to the board promulgating rules pursuant to this section, the secretary shall convene an advisory committee composed of stakeholders from in-state and out-of-state producers of transportation fuels, transportation fuel distributors, local governments, utilities, tribal governments, environmental protection groups, environmental justice groups and other individuals or entities with relevant expertise to provide input and periodically review program rules.

          C. The clean transportation fuel standard program rules shall:

                (1) establish a statewide technology-neutral clean transportation fuel standard based on a schedule for annually decreasing the carbon intensity of transportation fuels used in the state;

                (2) apply the clean transportation fuel standard to account for the fuel lifecycle in order to reduce the carbon intensity of transportation fuels used in the state by at least twenty percent below 2018 carbon intensity levels by 2030 and at least thirty percent below 2018 carbon intensity levels by 2040;

                (3) establish technology-neutral mechanisms for generating, obtaining, trading, selling and retiring credits among transportation fuel producers, fuel distributors and other individuals or entities in the transportation fuel market, including additional credit opportunities from activities and projects that support the reduction or removal of greenhouse gas emissions associated with transportation in the state;

                (4) establish mechanisms, including cost- containment measures and credit holding limits, to allow credits to be banked for future compliance periods to stabilize and incentivize investment in the transportation fuel credit market, verify the validity of compliance obligations, maximize savings and limit consumer costs, ensure program compliance, trade credits and allow for market participation by persons who register in the market to facilitate credit generation;

                (5) require a utility that elects to participate in the program to invest all revenues from the sale of credits, not including administrative program costs, into distribution, grid modernization, infrastructure and other projects that support transportation decarbonization, with at least fifty percent of such revenues supporting low-income and underserved communities and with investor-owned utilities receiving regulatory treatment consistent with Section 62-8-12 NMSA 1978;

                (6) consider similar programs in other jurisdictions, allow for coordination with other jurisdictions to promote regional reductions or removal of greenhouse gas emissions and allow market participants to generate credits under any overlapping current and future federal transportation fuel regulations;

                (7) not discriminate against fuels solely on the basis of having originated in another state or jurisdiction;

                (8) establish a periodic review process that includes input from the advisory committee convened pursuant to Subsection B of this section to provide input on program rules and performance and determine potential adjustments if deemed necessary after review, including the superseding of the state program by federal legislation;

                (9) allow for a deferral of the program based on emergency or forecasted conditions; and

                (10) establish fees for the cost of the department's administration and enforcement of the program; provided that any fees are deposited in the state air quality permit fund.

          D. For the purposes of the clean transportation fuel standard program, a transportation fuel shall not be assigned a carbon intensity value of less than zero.

          [D.] E. As used in this section:

                (1) "low-income" means annual household adjusted gross income, as defined in the Income Tax Act, of equal to or less than two hundred percent of the federal poverty level; and

                (2) "underserved community" means an area in this state, including a county, municipality or neighborhood, or subset of such area where the median income of the area is low-income."