HB0319

HOUSE BILL 319

52nd legislature - STATE OF NEW MEXICO - second session, 2016

INTRODUCED BY

David M. Gallegos

AN ACT

RELATING TO TAXATION; CREATING A CLEAN-BURNING MOTOR VEHICLE FUEL EQUIPMENT TAX CREDIT AGAINST PERSONAL AND CORPORATE INCOME TAXES.

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] CLEAN-BURNING MOTOR VEHICLE FUEL EQUIPMENT INCOME TAX CREDIT.--

A. A taxpayer who is not a dependent of another taxpayer may claim a credit against the taxpayer's liability imposed by the Income Tax Act if, after December 31, 2017 and before January 1, 2024, the taxpayer purchases and installs a qualified clean-burning motor vehicle fuel equipment device and otherwise meets the requirements of this section. The credit provided by this section may be referred to as the "clean-burning motor vehicle fuel equipment income tax credit".

B. The purpose of the clean-burning motor vehicle fuel equipment income tax credit is to address a concern for the environment, improve air quality, reduce dependence on volatile sources of foreign oil and enhance the state's economic base by promoting the use of and network for the state's abundant supply of natural gas and other clean-burning motor vehicle fuels.

C. A taxpayer may only claim a clean-burning motor vehicle fuel equipment income tax credit:

(1) for the taxable year in which:

(a) the taxpayer completes installation, within one mile of an interstate highway that is owned, operated or maintained by the department of transportation, of one or more qualified clean-burning motor vehicle fuel equipment devices; or

(b) the taxpayer, having been eligible in a previous taxable year for a certificate of eligibility for the credit, but who did not receive a certificate because the annual credit limit established in Paragraph (2) of Subsection D of this section was reached, receives a postponed certificate of eligibility for the credit;

(2) in an amount up to:

(a) fifty percent of the cost of the purchase and installation if installation is completed in 2018;

(b) forty-five percent of the cost of the purchase and installation if installation is completed in 2019;

(d) thirty-five percent of the cost of the purchase and installation if installation is completed in 2021;

(e) thirty percent of the cost of the purchase and installation if installation is completed in 2022; and

(f) twenty-five percent of the cost of the purchase and installation if installation is completed in 2023;

(3) once per device and location;

(4) for no more than five hundred thousand dollars ($500,000) per device and location; and

(5) by claiming the credit on forms and in the manner prescribed by the taxation and revenue department and including a certificate of eligibility received in accordance with Subsection D of this section.

D. Upon completed installation of a clean-burning motor vehicle fuel equipment device, a taxpayer may request from the energy, minerals and natural resources department a certificate of eligibility for a clean-burning motor vehicle fuel equipment income tax credit. The energy, minerals and natural resources department shall:

(1) consider applications for certificates of eligibility of clean-burning motor vehicle fuel equipment income tax credits and clean-burning motor vehicle fuel equipment corporate income tax credits in the order received and issue certificates in that order;

(2) each year, issue no more than five million dollars ($5,000,000) in certificates of eligibility for clean-burning motor vehicle fuel equipment income tax credits and clean-burning motor vehicle fuel equipment corporate income tax credits;

(3) issue a certificate of eligibility to the taxpayer if it determines that the taxpayer meets the requirements of this section and that the annual credit limit established in Paragraph (2) of this subsection has not been reached;

(4) maintain a chronologically ordered list of taxpayers who, had the annual credit limit not been reached, would be eligible to receive the credit;

(5) issue postponed certificates of eligibility to those taxpayers in order of eligibility and as the annual credit limit allows;

(6) include in each certificate of eligibility the taxable year for which the taxpayer is eligible to claim the credit and a calculation of the maximum amount of the credit for which the taxpayer is eligible; and

(7) promulgate rules as necessary for the issuance of certificates of eligibility for the credit.

E. That portion of a clean-burning motor vehicle fuel equipment income tax credit that exceeds a taxpayer's tax liability in the taxable year in which the credit is claimed may be carried forward for a maximum of five consecutive taxable years.

F. Married individuals filing separate returns for a taxable year for which they could have filed a joint return may each claim no more than one-half of the clean-burning motor vehicle fuel equipment income tax credit that could have been claimed on a joint return.

G. A taxpayer who is a co-owner of a business entity that is treated as a pass-through entity for federal income tax purposes, including a partner in a partnership, a member of a limited liability company or a shareholder of an S corporation as defined in Section 1361 of the Internal Revenue Code, may claim the clean-burning motor vehicle fuel equipment income tax credit in proportion to the taxpayer's ownership interest in the business entity; provided that the business entity has met all the requirements to be eligible for the credit and that the total credit amount claimed by all owners of the entity does not exceed the amount allowed by Subsection C of this section.

H. The taxation and revenue department shall compile an annual report on the clean-burning motor vehicle fuel equipment income tax credit that includes the number of taxpayers who claimed the credit, the aggregate amount of credits claimed and any other information necessary to evaluate the effectiveness of the credit. Beginning in 2019 and every year thereafter that the credit is in effect, the department shall present the report to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the effectiveness and cost of the credit and whether the credit is performing the purpose for which it was created.

I. As used in this section:

(1) "clean-burning motor vehicle fuel" means a compressed, liquefied or renewable natural gas fuel that emits oxides of nitrogen, volatile organic compounds, carbon monoxide, particulates or any combination of these at a level lower than gasoline or diesel and that meets or exceeds federal clean air standards;

(2) "clean-burning motor vehicle fuel equipment device":

(a) means a fueling device used directly to deliver clean-burning motor vehicle fuel for commercial purposes or for a fee into the fuel tanks of motor vehicles propelled by that fuel;

(b) includes compression equipment and storage tanks for clean-burning motor vehicle fuel at the fuel-delivery location if that equipment or tank is not used to deliver fuel into any other type of storage tank or receptacle and if that fuel is used only to propel motor vehicles; and

(3) "location" means a business premises where one or more devices are available for the commercial dispensation of fuel into a motor vehicle."

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

"[NEW MATERIAL] CLEAN-BURNING MOTOR VEHICLE FUEL EQUIPMENT CORPORATE INCOME TAX CREDIT.--

A. A taxpayer that files a New Mexico corporate income tax return may claim a credit against the taxpayer's liability imposed by the Corporate Income and Franchise Tax Act if, after December 31, 2017 and before January 1, 2024, the taxpayer purchases and installs a qualified clean-burning motor vehicle fuel equipment device and otherwise meets the requirements of this section. The credit provided by this section may be referred to as the "clean-burning motor vehicle fuel equipment corporate income tax credit".

B. The purpose of the clean-burning motor vehicle fuel equipment corporate income tax credit is to address a concern for the environment, improve air quality, reduce dependence on volatile sources of foreign oil and enhance the state's economic base by promoting the use of and network for the state's abundant supply of natural gas and other clean-burning motor vehicle fuels.

C. A taxpayer may only claim a clean-burning motor vehicle fuel equipment corporate income tax credit:

(1) for the taxable year in which:

(b) the taxpayer, having been eligible in a previous taxable year for a certificate of eligibility for the credit, but that did not receive a certificate because the annual credit limit established in Paragraph (2) of Subsection D of this section was reached, receives a postponed certificate of eligibility for the credit;

(2) in an amount up to:

(a) fifty percent of the cost of the purchase and installation if installation is completed in 2018;

(b) forty-five percent of the cost of the purchase and installation if installation is completed in 2019;

(d) thirty-five percent of the cost of the purchase and installation if installation is completed in 2021;

(e) thirty percent of the cost of the purchase and installation if installation is completed in 2022; and

(f) twenty-five percent of the cost of the purchase and installation if installation is completed in 2023;

(3) once per device and location;

(4) for no more than five hundred thousand dollars ($500,000) per device and location; and

D. Upon completed installation of a clean-burning motor vehicle fuel equipment device, a taxpayer may request from the energy, minerals and natural resources department a certificate of eligibility for a clean-burning motor vehicle fuel equipment corporate income tax credit. The energy, minerals and natural resources department shall:

(4) maintain a chronologically ordered list of taxpayers that, had the annual credit limit not been reached, would be eligible to receive the credit;

(5) issue postponed certificates of eligibility to those taxpayers in order of eligibility and as the annual credit limit allows;

(7) promulgate rules as necessary for the issuance of certificates of eligibility for the credit.

E. That portion of a clean-burning motor vehicle fuel equipment corporate income tax credit that exceeds a taxpayer's tax liability in the taxable year in which the credit is claimed may be carried forward for a maximum of five consecutive taxable years.

F. A taxpayer that is a co-owner of a business entity that is treated as a pass-through entity for federal income tax purposes, including a partner in a partnership or a member of a limited liability company, may claim the clean-burning motor vehicle fuel equipment corporate income tax credit in proportion to the taxpayer's ownership interest in the business entity, provided that the business entity has met all the requirements to be eligible for the credit and that the total credit amount claimed by all owners of the entity does not exceed the amount allowed by Subsection C of this section.

G. The taxation and revenue department shall compile an annual report on the clean-burning motor vehicle fuel equipment corporate income tax credit that includes the number of taxpayers that claimed the credit, the aggregate amount of credits claimed and any other information necessary to evaluate the effectiveness of the credit. Beginning in 2019 and every year thereafter that the credit is in effect, the department shall present the report to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the effectiveness and cost of the credit and whether the credit is performing the purpose for which it was created.

H. As used in this section:

(2) "clean-burning motor vehicle fuel equipment device":

(a) means a fueling device used directly to deliver clean-burning motor vehicle fuel for commercial purposes or for a fee into the fuel tanks of motor vehicles propelled by that fuel;

(3) "location" means a business premises where one or more devices are available for the commercial dispensation of fuel into a motor vehicle."

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