SENATE FLOOR SUBSTITUTE FOR

SENATE BILL 210

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

AN ACT

RELATING TO TAXATION; ENACTING A NEW SECTION OF THE CORPORATE INCOME AND FRANCHISE TAX ACT TO PROVIDE FOR A HYDROGEN FUEL PRODUCTION CORPORATE INCOME TAX CREDIT.

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

     SECTION 1. A new section of the Corporate Income and Franchise Tax Act is enacted to read:

     "[NEW MATERIAL] HYDROGEN FUEL PRODUCTION CORPORATE INCOME TAX CREDIT.--

          A. A taxpayer that files a New Mexico corporate income tax return may claim the hydrogen fuel production corporate income tax credit if the taxpayer holds title to a qualified hydrogen fuel or hydrogen resource generator that first produced and sold hydrogen on or before January 1, 2018.

          B. The tax credit provided in this section may be referred to as the "hydrogen fuel production corporate income tax credit". The purpose of the hydrogen fuel production corporate income tax credit is to stimulate the production and sale of hydrogen as a renewable fuel and energy source.

          C. The tax credit provided in this section shall not be claimed as an addition to the renewable energy production tax credit pursuant to Section 7-2-18.18 or 7-2A-19 NMSA 1978.

          D. The amount of the tax credit shall equal the cost of generating the hydrogen but shall not exceed one dollar ($1.00) per kilogram of the first four million kilograms of hydrogen fuel produced and sold by the qualified hydrogen fuel or hydrogen resource generator in the taxable year.

          E. A taxpayer eligible for a hydrogen fuel production corporate income tax credit shall be eligible for the tax credit for five consecutive years, beginning on the date the qualified hydrogen fuel or hydrogen resource generator begins producing hydrogen. Any portion of the tax credit allowed pursuant to this section that remains unused at the end of the taxpayer's taxable year may be carried forward for five consecutive years.

          F. No later than October 30 of each year, the department shall compile a report in regard to the hydrogen fuel production corporate income tax credit provided pursuant to the Corporate Income and Franchise Tax Act for the revenue stabilization and tax policy committee that includes:

                (1) the number of people applying for a hydrogen fuel production corporate income tax credit;

                (2) the number and amount of hydrogen fuel production corporate income tax credits allowed;

                (3) the number of new jobs created in New Mexico in the taxable year by construction and installation of hydrogen fuel or resource systems, the level of production of hydrogen fuel by qualified hydrogen fuel or hydrogen resource generators claiming the tax credit and the total production level in the state;

                (4) the number of people employed in the generation of hydrogen for fuel and the average and median wages of those employed; and

                (5) any other data or information deemed necessary by the department to aid the committee in determining the impact of the hydrogen fuel production personal and corporate income tax credits.

          G. Notwithstanding any other section of law to the contrary, the department may reveal to the revenue stabilization and tax policy committee the number of applicants seeking hydrogen fuel production corporate income tax credits pursuant to this section and the amount of each tax credit approved.

          H. The revenue stabilization and tax policy committee shall review the impact of the hydrogen fuel production corporate income tax credit every five years beginning in 2014.

          I. Acceptance by a person of a hydrogen fuel production corporate income tax credit pursuant to this section is authorization by the person receiving the credit for the department to reveal information to the legislature necessary to analyze the impact of the tax credit on state revenues.

          J. As used in this section, "qualified hydrogen fuel or hydrogen resource generator" means a hydrogen fuel generator or hydrogen resource generator that uses:

                (1) renewably powered electrolysis such as that which is:

                     (a) solar-light-derived;

                     (b) solar-heat-derived;

                     (c) wind-derived;

                     (d) hydroelectric-derived; or

                     (e) geothermal-derived;

                (2) renewably powered pyrolysis such as that which is:

                     (a) solar-light-derived;

                     (b) solar-heat-derived;

                     (c) plasma-derived

                     (d) wind-derived;

                     (e) hydroelectric-derived; or

                     (f) geothermal-derived; or

                (3) biomass or cellulose."

     SECTION 2. APPLICABILITY.--The provisions of this act are applicable to taxable years beginning on or after January 1, 2011.

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