HB0198

HOUSE BILL 198

50th legislature - STATE OF NEW MEXICO - first session, 2011

INTRODUCED BY

Ben Lujan

FOR THE REVENUE STABILIZATION AND TAX POLICY COMMITTEE

AN ACT

RELATING TO TAXATION; PROVIDING INCOME TAX CREDITS TO ENCOURAGE CONVERSION OF VEHICLES TO THE USE OF NATURAL GAS AND TO ENCOURAGE RETAIL BUSINESSES SELLING GASOLINE TO EXPAND INTO DISPENSING NATURAL GAS FOR VEHICLE FUEL; PROVIDING FOR AN EXEMPTION FROM THE MOTOR VEHICLE EXCISE TAX FOR THE PURCHASE OF NEW MOTOR VEHICLES THAT USE NATURAL GAS AS A FUEL.

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] TAX CREDIT--VEHICLE CONVERSION TO NATURAL GAS.--

A. A taxpayer who files an individual New Mexico income tax return for a taxable year beginning on or after January 1, 2011, who is not a dependent of another taxpayer and who converts on or after January 1, 2011 and before January 1, 2017 a motor vehicle that only uses a petroleum-based fuel to use natural gas as a fuel may claim, and the department may allow, a tax credit in the amount of seventy percent of the cost, after any available federal tax credit is applied, of converting the motor vehicle from only using a petroleum-based fuel to using natural gas; provided that the motor vehicle is owned by the taxpayer. The tax credit that may be claimed pursuant to this section may be referred to as the "vehicle natural gas conversion income tax credit". The vehicle natural gas conversion income tax credit may only be claimed for conversion of a motor vehicle to natural gas use on or after January 1, 2011 and before January 1, 2017.

B. The purpose of the vehicle natural gas conversion income tax credit is to encourage the use of natural gas as a fuel for motor vehicles by providing a tax incentive to individuals who convert their motor vehicles to use natural gas as a fuel.

C. The department shall allow a vehicle natural gas conversion income tax credit only for a natural gas conversion system approved by the energy, minerals and natural resources department.

D. A portion of the vehicle natural gas conversion income tax credit that remains unused in a taxable year may be carried forward for a maximum of three consecutive taxable years following the taxable year in which the credit originates until the credit is fully expended.

E. Prior to July 1, 2011, the energy, minerals and natural resources department shall adopt rules establishing procedures and guidelines for obtaining approval of a natural gas conversion income system for purposes of the vehicle natural gas conversion tax credit. The rules shall address the basic technical specifications and requirements that are necessary for a natural gas conversion system to gain the approval of the energy, minerals and natural resources department. The energy, minerals and natural resources department shall review and modify the specifications and requirements as needed to address technological improvements in natural gas conversion systems. The energy, minerals and natural resources department shall provide a certificate to a taxpayer whose natural gas conversion income system is approved for purposes of claiming a vehicle natural gas conversion income tax credit. The certificate shall include the vehicle identification number, the vehicle registration plate number and the taxpayer's identification number. Certificates shall be numbered sequentially and recorded by the energy, minerals and natural resources department.

F. The taxation and revenue department may allow a maximum annual aggregate of two million dollars ($2,000,000) in vehicle natural gas conversion income tax credits that may be claimed pursuant to the Income Tax Act and vehicle natural gas conversion income corporate income tax credits pursuant to the Corporate Income and Franchise Tax Act. Applications for credits shall be considered in the order received by the department.

G. A taxpayer who otherwise qualifies and claims a vehicle natural gas conversion income tax credit that may be claimed by a partnership of which the taxpayer is a member may only claim a credit in proportion to the taxpayer's interest in the partnership. The total credit claimed by all members of the partnership shall not exceed the aggregate of the allowable costs pursuant to Subsection A of this section.

H. 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 vehicle natural gas conversion income tax credit that would have been allowed on a joint return.

I. The taxation and revenue department shall compile an annual report that includes the number of taxpayers approved by the department to receive a vehicle natural gas conversion income tax credit. Notwithstanding any other section of law to the contrary, the taxation and revenue department and the energy, minerals and natural resources department may disclose the number of applicants for the vehicle natural gas conversion income tax credit, the amount of each credit approved, the number of motor vehicles converted to use natural gas as a fuel and any other information required by the legislature or the taxation and revenue department to aid in evaluating the effectiveness of the vehicle natural gas conversion income tax credit.

J. As used in this section:

(1) "motor vehicle" means a vehicle that is self-propelled by an internal combustion engine and that is registered pursuant to the Motor Vehicle Code; and

(2) "natural gas conversion system" means a system for changing an internal combustion engine that operates on a petroleum-based fuel into an internal combustion engine that operates on natural gas or natural gas and petroleum-based fuel."

SECTION 2. A new section of the Income Tax Act is enacted to read:

"[NEW MATERIAL] TAX CREDIT--EXPANSION OF RETAIL FUEL STATION TO DISPENSE NATURAL GAS.--

A. A taxpayer who files an individual New Mexico income tax return for a taxable year beginning on or after January 1, 2011, who is not a dependent of another taxpayer and who purchases and installs in New Mexico, at the taxpayer's gasoline or other fuel-dispensing retail station, pumps or other devices that dispense natural gas into storage tanks for use to fuel motor vehicles may claim, and the department may allow, a tax credit in the amount of fifty percent of the cost, after any available federal tax credit is applied, of purchasing and installing pumps or other devices that dispense natural gas into one or more storage tanks of a motor vehicle for use to power the motor vehicle. The tax credit that may be claimed pursuant to this section may be referred to as the "natural gas dispensers income tax credit". The natural gas dispensers income tax credit may be claimed only for purchase and installation of a natural gas dispensing system on or after January 1, 2011 and before January 1, 2017.

B. The purpose of the natural gas dispensers income tax credit is to encourage the use of natural gas as a fuel for motor vehicles by providing a tax incentive to individuals who purchase and install natural gas dispensing systems for use by the general public.

C. The department shall allow a natural gas dispensers income tax credit only for dispensing systems approved by the energy, minerals and natural resources department.

D. A portion of the natural gas dispensers income tax credit that remains unused in a taxable year may be carried forward for a maximum of three consecutive taxable years following the taxable year in which the credit originates until the credit is fully expended.

E. Prior to July 1, 2011, the energy, minerals and natural resources department shall adopt rules establishing procedures and guidelines for obtaining approval of natural gas dispensing systems for purposes of the natural gas dispensers income tax credit. The rules shall address the basic technical specifications and requirements that are deemed necessary for the safe and effective installation of a natural gas dispensing system to gain the approval of the energy, minerals and natural resources department. The energy, minerals and natural resources department shall review and modify the specifications and requirements as needed. The energy, minerals and natural resources department shall provide a certificate to a taxpayer whose natural gas dispensing system is approved for purposes of claiming a natural gas dispensers tax credit. Certificates shall be numbered sequentially and recorded by the energy, minerals and natural resources department.

F. The taxation and revenue department may allow a maximum annual aggregate of two million dollars ($2,000,000) in natural gas dispensers income tax credits that may be claimed pursuant to the Income Tax Act and natural gas dispensers corporate income tax credits pursuant to the Corporate Income and Franchise Tax Act. Applications for credits shall be considered in the order received by the department.

G. A taxpayer who otherwise qualifies and claims a natural gas dispensers income tax credit that may be claimed by a partnership of which the taxpayer is a member may only claim a credit in proportion to the taxpayer's interest in the partnership. The total credit claimed by all members of the partnership shall not exceed the aggregate of the allowable costs pursuant to Subsection A of this section.

H. 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 natural gas dispensers income tax credit that would have been allowed on a joint return.

I. The taxation and revenue department shall compile an annual report that includes the number of taxpayers approved by the department to receive a natural gas dispensers income tax credit. Notwithstanding any other section of law to the contrary, the taxation and revenue department and the energy, minerals and natural resources department may disclose the number of applicants for the natural gas dispensers tax credit, the amount of each credit approved, the number of retail stations or other locations that installed devices that dispense natural gas into storage tanks for use to fuel motor vehicles of the general public and any other information required by the legislature or the taxation and revenue department to aid in evaluating the effectiveness of the natural gas dispensers income tax credit.

J. As used in this section:

(1) "motor vehicle" means a vehicle that is self-propelled by an internal combustion engine and is registered pursuant to the Motor Vehicle Code; and

(2) "natural gas dispensing system" means pumps or other equipment required to dispense natural gas into storage tanks of a motor vehicle that enable the motor vehicle to operate on natural gas."

SECTION 3. A new section of the Corporate Income and Franchise Tax Act is enacted to read:

"[NEW MATERIAL] TAX CREDIT--VEHICLE CONVERSION TO NATURAL GAS.--

A. A taxpayer that files a New Mexico corporate income tax return for a taxable year beginning on or after January 1, 2011 and converts on or after January 1, 2011 and before January 1, 2017 a motor vehicle that only uses a petroleum-based fuel to use natural gas as a fuel may claim, and the department may allow, a tax credit against the taxpayer's corporate income and franchise tax liabilities in the amount of seventy percent of the cost, after any available federal tax credit is applied, of converting the motor vehicle from only using a petroleum-based fuel to using natural gas; provided that the motor vehicle is owned by the taxpayer. The tax credit that may be claimed pursuant to this section may be referred to as the "vehicle natural gas conversion corporate income tax credit". The vehicle natural gas conversion corporate income tax credit may only be claimed for conversion of a motor vehicle to use natural gas on or after January 1, 2011 and before January 1, 2017.

B. The purpose of the vehicle natural gas conversion corporate income tax credit is to encourage the use of natural gas as a fuel for motor vehicles by providing a tax incentive to corporate taxpayers that convert their motor vehicles to use natural gas as a fuel.

C. The department shall allow a vehicle natural gas conversion corporate income tax credit only for a conversion system approved by the energy, minerals and natural resources department.

D. A portion of the vehicle natural gas conversion corporate income tax credit that remains unused in a taxable year may be carried forward for a maximum of three consecutive taxable years following the taxable year in which the credit originates until the credit is fully expended.

E. Prior to July 1, 2011, the energy, minerals and natural resources department shall adopt rules establishing procedures and guidelines for obtaining approval of natural gas conversion systems for purposes of the vehicle natural gas conversion corporate income tax credit. The rules shall address the basic technical specifications and requirements that are necessary for a natural gas conversion system to gain the approval of the energy, minerals and natural resources department. The energy, minerals and natural resources department shall review and modify the specifications and requirements as needed. The energy, minerals and natural resources department shall provide a certificate to a taxpayer whose natural gas conversion system is approved for purposes of claiming a vehicle natural gas conversion corporate income tax credit. Certificates shall be numbered sequentially and recorded by the energy, minerals and natural resources department.

F. The taxation and revenue department may allow a maximum annual aggregate of two million dollars ($2,000,000) in vehicle natural gas conversion corporate income tax credits and vehicle natural gas conversion income tax credits that may be claimed pursuant to the Income Tax Act. Applications for credits shall be considered in the order received by the department.

G. The taxation and revenue department shall compile an annual report that includes the number of taxpayers approved by the department to receive a vehicle natural gas conversion corporate income tax credit. Notwithstanding any other section of law to the contrary, the taxation and revenue department and the energy, minerals and natural resources department may disclose the number of applicants for the vehicle natural gas conversion corporate income tax credit, the amount of each credit approved, the number of motor vehicles converted to use natural gas as a fuel and any other information required by the legislature or the taxation and revenue department to aid in evaluating the effectiveness of the vehicle natural gas conversion corporate income tax credit.

H. As used in this section:

(1) "motor vehicle" means a vehicle that is self-propelled by an internal combustion engine and that is registered pursuant to the Motor Vehicle Code; and

SECTION 4. A new section of the Corporate Income and Franchise Tax Act is enacted to read:

"[NEW MATERIAL] TAX CREDIT--EXPANSION OF RETAIL FUEL STATION TO DISPENSE NATURAL GAS.--

A. A taxpayer that files a New Mexico corporate income tax return for a taxable year beginning on or after January 1, 2011 and that purchases and installs on or after January 1, 2011 but before January 1, 2017 in New Mexico, at the taxpayer's gasoline or other fuel-dispensing retail station, pumps or other devices that dispense natural gas into storage tanks for use to fuel motor vehicles may claim, and the department may allow, a tax credit to be claimed against the taxpayer's corporate income or franchise tax liabilities in the amount of fifty percent of the cost, after any available federal tax credit is applied, of purchasing and installing pumps or other devices that dispense natural gas into one or more storage tanks of a motor vehicle for use to power the motor vehicle. The tax credit that may be claimed pursuant to this section may be referred to as the "natural gas dispensers corporate income tax credit".

B. The purpose of the natural gas dispensers corporate income tax credit is to encourage the use of natural gas as a fuel for motor vehicles by providing a tax incentive to corporate taxpayers that purchase and install natural gas dispensing systems for use by the general public.

C. The department shall allow a natural gas dispensers corporate income tax credit only for a natural gas dispensing system approved by the energy, minerals and natural resources department.

D. A portion of the natural gas dispensers corporate income tax credit that remains unused in a taxable year may be carried forward for a maximum of three consecutive taxable years following the taxable year in which the credit originates until the credit is fully expended.

E. Prior to July 1, 2011, the energy, minerals and natural resources department shall adopt rules establishing procedures and guidelines for obtaining approval of natural gas dispensing systems for purposes of the natural gas dispensers corporate income tax credit. The rules shall address the basic technical specifications and requirements that are deemed necessary for the safe and effective installation of a natural gas dispensing system to gain the approval of the energy, minerals and natural resources department. The energy, minerals and natural resources department shall review and modify the specifications and requirements as needed. The energy, minerals and natural resources department shall provide a certificate to a taxpayer whose natural gas dispensing system is approved for purposes of claiming a natural gas dispensers corporate income tax credit. Certificates shall be numbered sequentially and recorded by the energy, minerals and natural resources department.

F. The taxation and revenue department may allow a maximum annual aggregate of two million dollars ($2,000,000) in natural gas dispensers corporate income tax credits pursuant to this section and natural gas dispensers income tax credits that may be claimed pursuant to the Income Tax Act. Applications for credits shall be considered in the order received by the department.

G. The taxation and revenue department shall compile an annual report that includes the number of taxpayers approved by the department to receive a natural gas dispensers corporate income tax credit. Notwithstanding any other section of law to the contrary, the taxation and revenue department and the energy, minerals and natural resources department may disclose the number of applicants for the natural gas dispensers corporate income tax credit, the amount of each credit approved, the number of retail stations or other locations that installed devices that dispense natural gas into storage tanks for use to fuel motor vehicles of the general public and any other information required by the legislature or the taxation and revenue department to aid in evaluating the effectiveness of the natural gas dispensers corporate income tax credit.

H. As used in this section:

(1) "motor vehicle" means a vehicle that is self-propelled by an internal combustion engine and that is registered pursuant to the Motor Vehicle Code; and

(2) "natural gas dispensing system" means pumps or other equipment required to dispense natural gas into storage tanks of a motor vehicle that enable the motor vehicle to operate on natural gas."

SECTION 5. Section 7-9-22 NMSA 1978 (being Laws 1969, Chapter 144, Section 15, as amended) is amended to read:

"7-9-22. EXEMPTION--GROSS RECEIPTS TAX--VEHICLES.--Exempted from the gross receipts tax are the receipts from selling vehicles on which a tax is imposed by the Motor Vehicle Excise Tax Act, vehicles subject to registration under Section 66-3-16 NMSA 1978 and vehicles exempt from the motor vehicle excise tax pursuant to Subsection [F] H of Section 7-14-6 NMSA 1978."

SECTION 6. Section 7-14-6 NMSA 1978 (being Laws 1988, Chapter 73, Section 16, as amended) is amended to read:

"7-14-6. EXEMPTIONS FROM TAX.--

A. A person who acquires a vehicle out of state thirty or more days before establishing a domicile in this state is exempt from the tax if the vehicle was acquired for personal use.

B. A person applying for a certificate of title for a vehicle registered in another state is exempt from the tax if the person has previously registered and titled the vehicle in New Mexico and has owned the vehicle continuously since that time.

C. A vehicle with a certificate of title owned by this state or any political subdivision is exempt from the tax.

D. A person is exempt from the tax if the person has a disability at the time the person purchases a vehicle and can prove to the motor vehicle division of the department or its agent that modifications have been made to the vehicle that are:

(1) due to that person's disability; and

(2) necessary to enable that person to drive that vehicle or be transported in that vehicle.

E. A person is exempt from the tax if the person is a bona fide resident of New Mexico who served in the armed forces of the United States and who suffered, while serving in the armed forces or from a service-connected cause, the loss or complete and total loss of use of:

(1) one or both legs at or above the ankle; or

(2) one or both arms at or above the wrist.

F. A person who acquires a vehicle for subsequent lease shall be exempt from the tax if:

(1) the person does not use the vehicle in any manner other than holding it for lease or sale or leasing or selling it in the ordinary course of business;

(2) the lease is for a term of more than six months;

(3) the receipts from the subsequent lease are subject to the gross receipts tax; and

(4) the vehicle does not have a gross vehicle weight of over twenty-six thousand pounds.

G. From July 1, 2004 through June 30, 2009, vehicles that are gasoline-electric hybrid vehicles with a United States environmental protection agency fuel economy rating of at least twenty-seven and one-half miles per gallon are eligible for a one-time exemption from the tax at the time of the issuance of the original certificate of title for the vehicle.

H. From July 1, 2011 through June 30, 2016, vehicles that use natural gas as a fuel are eligible for a one-time exemption from the tax at the time of the issuance of the original certificate of title for the vehicle."

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