SENATE BILL 237
49th legislature - STATE OF NEW MEXICO - first session, 2009
INTRODUCED BY
Carlos R. Cisneros
AN ACT
RELATING TO TAXATION; AMENDING A SECTION OF CHAPTER 7 NMSA 1978 TO PROVIDE FOR A TAX CREDIT FOR INTERESTS IN GEOTHERMAL, SOLAR THERMAL AND SOLAR PHOTOVOLTAIC ELECTRIC GENERATING FACILITIES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 7-9G-2 NMSA 1978 (being Laws 2007, Chapter 229, Section 1) is amended to read:
"7-9G-2. ADVANCED ENERGY TAX CREDIT--GROSS RECEIPTS TAX--COMPENSATING TAX--WITHHOLDING TAX--PERSONAL INCOME TAX--CORPORATE INCOME TAX.--
A. A taxpayer that holds an interest in a qualified generating facility located in New Mexico may claim a credit to be computed pursuant to the provisions of this section. The credit provided by this section may be referred to as the "advanced energy tax credit".
B. As used in this section:
(1) "department" means the taxation and revenue department;
(2) "eligible generation plant costs" means expenditures for the development and construction of a qualified generating facility, including permitting; site characterization and assessment; engineering; design; carbon dioxide capture, treatment, compression, transportation and sequestration; site and equipment acquisition; and fuel supply development used directly and exclusively in a qualified generating facility;
(3) "entity" means any individual, estate, trust, receiver, cooperative association, club, corporation, company, firm, partnership, limited liability company, limited liability partnership, joint venture, syndicate, other association or gas, water or electric utility owned or operated by a county or municipality;
(4) "geothermal electric generating facility" means a geothermal electric generating facility with a name plate capacity of one megawatt or more that uses geothermal energy to generate electricity, including a facility that captures and provides geothermal energy to a preexisting electric generating facility using other fuels in part;
(5) "interest in a qualified generating facility" means title to a qualified generating facility; a leased interest in a qualified generating facility; an ownership interest in a business or entity that is taxed for federal income tax purposes as a partnership that holds title to or a leasehold interest in a qualified generating 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 or a leasehold interest in a qualified generating facility;
(6) "name plate capacity" means the maximum rated output of the facility measured as alternating current or the equivalent direct current measurement;
[(3)] (7) "qualified generating facility" means a new solar [thermal] electric generating facility that may include an associated renewable energy storage facility; a new geothermal electric generating facility; or a recycled energy [projects that] project if that facility or project begins construction no later than December 31, 2015 [or]. "Qualified generating facility" also includes a new or re-powered coal-based electric generating unit and an associated coal gasification facility, if any, that begins construction no later than December 31, 2015 that meets the following specifications:
(a) emits the lesser of: 1) what is achievable with the best available control technology; or 2) thirty-five thousandths pound per million British thermal units of sulfur dioxide, twenty-five thousandths pound per million British thermal units of oxides of nitrogen and one hundredth pound per million British thermal units of total particulates in the flue gas;
(b) removes the greater of: 1) what is achievable with the best available control technology; or 2) ninety percent of the mercury from the input fuel;
(c) captures and sequesters or controls carbon dioxide emissions so that by the later of January 1, 2017 or eighteen months after the commercial operation date of the qualified generating facility, no more than one thousand one hundred pounds per megawatt-hour of carbon dioxide is emitted into the atmosphere; (d) all infrastructure required for sequestration is in place by the later of January 1, 2017 or eighteen months after the commercial operation date of the qualified generating facility;
(e) includes methods and procedures to monitor the disposition of the carbon dioxide captured and sequestered from the facility; and (f) does not exceed seven hundred net megawatts name plate capacity;
[(4)] (8) "recycled energy" means energy produced by a generation unit with a name plate capacity of not more than fifteen megawatts that converts the otherwise lost energy from the exhaust stacks or pipes to electricity without combustion of additional fossil fuel; [and
(5)] (9) "sequester" means to store, or chemically convert, carbon dioxide in a manner that prevents its release into the atmosphere and may include the use of geologic formations and enhanced oil, coalbed methane or natural gas recovery techniques; and
(10) "solar electric generating facility" means a solar thermal or solar photovoltaic electric generating facility with a name plate capacity of one megawatt or more that uses solar energy to generate electricity, including a facility that captures and provides solar energy to a preexisting electric generating facility using other fuels in part.
C. Subject to the limit imposed in Subsection H of this section, the advanced energy tax credit shall equal no more than six percent of the eligible generation plant costs of a qualified generating facility.
D. A taxpayer may apply for the advanced energy tax credit by submitting to the taxation and revenue department a certificate issued by the department of environment pursuant to Subsection I of this section, documentation showing the taxpayer's interest in the qualified generating facility identified in the certificate and other information the taxation and revenue department requests to determine the amount of tax credit due to the taxpayer.
E. A taxpayer having applied for and been granted approval for a credit by the department pursuant to this section may claim an amount of available credit against the taxpayer's personal income tax, corporate income tax, gross receipts tax, compensating tax or withholding tax due to the state.
F. A taxpayer that is liable for the payment of gross receipts or compensating tax with respect to the ownership, development, construction, maintenance or operation of a new coal-based electric generating facility that does not meet the criteria for a qualified generating facility and that begins construction after January 1, 2007 shall not claim an advanced energy tax credit pursuant to this section or a gross receipts tax credit, a compensating tax credit or a withholding tax credit pursuant to any other state law.
G. If the amount of the tax credit claimed exceeds the taxpayer's liability, the excess may be carried forward for up to [five] ten years.
H. The aggregate amount of tax credit that may be claimed with respect to each qualified generating facility shall not exceed sixty million dollars ($60,000,000).
I. An entity that holds [title to] an interest in a qualified generating facility may request a certificate of eligibility from the department of environment to enable the requester to apply for the advanced energy tax credit. The department of environment:
(1) shall determine if the facility is a qualified generating facility;
(2) shall require that the requester provide the department of environment with the information necessary to assess whether the requester's facility meets the criteria to be a qualified generating facility;
(3) shall issue a certificate to the requester stating that the facility is or is not a qualified generating facility within one hundred eighty days after receiving all information necessary to make a determination;
(4) shall:
(a) issue rules governing the procedure for administering the provisions of this subsection and Subsection J of this section;
(b) issue a schedule of fees in which no fee exceeds one hundred fifty thousand dollars ($150,000); and
(c) deposit fees collected pursuant to this paragraph in the state air quality permit fund created pursuant to Section 74-2-15 NMSA 1978; and
(5) shall report annually to the appropriate interim legislative committee information that will allow the legislative committee to analyze the effectiveness of the advanced energy tax credit, including the identity of qualified generating facilities, the energy production means used, the amount of emissions identified in this section reduced and removed by those qualified generating facilities and whether any requests for certificates of eligibility could not be approved due to program limits.
J. If the department of environment issues a certificate of eligibility to a taxpayer stating that the taxpayer [is] holds an interest in a qualified generating facility and the taxpayer does not sequester or control carbon dioxide emissions to the extent required by this section by the later of January 1, 2017 or eighteen months after the commercial operation date of the qualified generating facility, the taxpayer's certification as a qualified generating facility shall be revoked by the department of environment and the taxpayer shall refund to the state tax credits granted pursuant to this section; provided that if the taxpayer demonstrates to the department of environment that the taxpayer made every effort to sequester or control carbon dioxide emissions to the extent feasible and the facility's inability to meet the sequestration requirements of a qualified generating facility was beyond the facility's control, in which case the department of environment shall determine, after a public hearing, the amount of the tax credit that should be refunded. The department of environment, in its determination, shall consider the environmental performance of the facility and the extent to which the inability to meet the sequestration requirements of a qualified generating facility was in the control of the taxpayer. The refund as determined by the department of environment shall be paid within one hundred eighty days following a final order by the department of environment.
K. Expenditures for which a taxpayer claims a credit pursuant to this section are ineligible for credits pursuant to the provisions of the Investment Credit Act or any other credit against personal income tax, corporate income tax, compensating tax, gross receipts tax or withholding tax.
L. A taxpayer shall apply for approval for a credit within one year following the end of the calendar year in which the eligible generation plant costs are incurred."
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