2005 House Bill text for HB0950

HOUSE BILL 950

47th legislature - STATE OF NEW MEXICO - first session, 2005

INTRODUCED BY

Brian K. Moore

AN ACT

RELATING TO TAXATION; EXPANDING CRITERIA FOR ELIGIBILITY FOR THE RENEWABLE ENERGY PRODUCTION TAX CREDIT.

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

Section 1. Section 7-2A-19 NMSA 1978 (being Laws 2002, Chapter 59, Section 1, as amended) is amended to read:

"7-2A-19. RENEWABLE ENERGY PRODUCTION TAX CREDIT--LIMITATIONS--DEFINITIONS--CLAIMING THE CREDIT.--

A. The tax credit provided in this section may be referred to as the "renewable energy production tax credit". A taxpayer [that owns a qualified energy generator certified by the energy, minerals and natural resources department] is eligible for a tax credit in an amount equal to one cent ($.01) per kilowatt-hour for the first four hundred thousand megawatt-hours of electricity produced by the qualified energy generator using a qualified energy resource in the taxable year if the taxpayer:

(1) holds title to a qualified energy generator;

(2) directly or indirectly owns at least five percent of a business entity that holds title to a qualified energy generator;

(3) leases property upon which a qualified energy generator operates from a county or municipality under authority of an industrial revenue bond; or

(4) is allocated part of or an entire amount of a renewable energy production tax credit pursuant to Subsection E of this section.

B. A taxpayer eligible for a renewable energy production tax credit pursuant to Subsection A of this section shall be eligible for the tax credit for ten consecutive years, beginning on the date the qualified energy generator begins producing electricity. [The tax credit provided in this section may be referred to as the "renewable energy production tax credit".

B.] C. As used in this section:

(1) "biomass" means agricultural or animal waste; thinnings from trees less than fifteen inches in diameter, slash and brush; lumbermill or sawmill residues; and salt cedar and other phreatophytes removed from watersheds or river basins;

(2) "qualified energy generator" means a facility with at least ten megawatts generating capacity located in New Mexico that produces electricity using a qualified energy resource and that sells that electricity to an unrelated person; and

(3) "qualified energy resource" means a resource that generates electrical energy by means of a fluidized bed technology or similar low-emissions technology or a zero-emissions generation technology that has substantial long-term production potential and that uses only the following energy sources:

(a) solar light;

(b) solar heat;

(d) biomass.

[C.] D. A taxpayer that holds title to a facility generating electricity from a qualified energy resource or one that leases such a facility from a county or municipality pursuant to an industrial revenue bond may request certification of eligibility for the renewable energy production tax credit from the energy, minerals and natural resources department, which shall determine if the applicant is [a qualified energy generator] eligible for the tax credit pursuant to Subsection A of this section; provided that the department may certify the eligibility of an energy generator only if the total amount of electricity that may be produced annually by all qualified energy generators that are certified will not exceed two million megawatt-hours. Applications shall be considered in the order received. The energy, minerals and natural resources department may estimate the annual power-generating potential of a generating facility for the purposes of this section. The energy, minerals and natural resources department shall issue a certificate to the applicant stating whether the applicant is [an] eligible [qualified energy generator] for the renewable energy production tax credit pursuant to Subsection A of this section and the estimated annual production potential of the generating facility owned or leased by the taxpayer, which shall be the limit of that facility's energy production eligible for the tax credit for the taxable year. The energy, minerals and natural resources department may issue rules governing the procedure for administering the provisions of this subsection.

[D. To claim a renewable energy production tax credit, a taxpayer that has been certified as eligible pursuant to Subsection C of this section shall submit]

E. A taxpayer certified as eligible for the renewable energy production tax credit pursuant to Subsection D of this section and that is taxed for federal income tax purposes as a partnership may allocate all or a portion of the right to claim the renewable energy production tax credit to a taxpayer who owns an interest in that partnership. The taxpayer shall provide notice to the taxation and revenue department of that allocation in a form prescribed by the department. The department shall certify the allocation in writing to the recipient of the allocation.

F. A taxpayer that receives certification pursuant to Subsection D of this section shall claim a renewable energy production tax credit by submitting to the taxation and revenue department the certificate issued by the energy, minerals and natural resources department, documentation of the amount of electricity produced by the taxpayer's facility in the taxable year and any other information the taxation and revenue department may require to determine the amount of the tax credit due the taxpayer.

G. A taxpayer that receives certification pursuant to Subsection E of this section shall claim the renewable energy production tax credit by submitting to the taxation and revenue department, in a form prescribed by the department, a copy of that certification, documentation of the amount of electricity produced by the qualified energy generator owned or leased by the partnership of which the taxpayer owns an interest and any other information required by the department for determination of the amount of the tax credit due.

[E.] H. Once a taxpayer has been granted a renewable energy production tax credit for a given facility, that taxpayer shall be allowed to retain its original date of application for tax credits for that facility until either the facility goes out of production for more than six consecutive months in a year or until the facility's ten-year eligibility has expired.

[F.] I. The renewable energy production tax credit may be deducted from the taxpayer's New Mexico corporate income tax liability for the taxable year. If the amount of the tax credit claimed exceeds the taxpayer's corporate income tax liability, the excess may be carried forward for up to five consecutive taxable years."

Section 2. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2005.

- 6 -