RENEWABLE ENERGY PRODUCTION TAX ACT

HB0113

HOUSE BILL 113

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

John Block

AN ACT

RELATING TO TAXATION; ENACTING THE RENEWABLE ENERGY PRODUCTION
TAX ACT; IMPOSING AN EXCISE TAX ON ELECTRICITY GENERATED FROM
RENEWABLE ENERGY RESOURCES; DISTRIBUTING REVENUE FROM THE TAX
TO THE SEVERANCE TAX PERMANENT FUND.

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

SECTION 1.
[
NEW MATERIAL
] SHORT TITLE.--Sections 1
through 5 of this act may be cited as the "Renewable Energy
Production Tax Act".

SECTION 2.
[
NEW MATERIAL
] DEFINITIONS.--As used in the
Renewable Energy Production Tax Act:

A. "department" means the taxation and revenue
department;

B. "generating facility" means a facility that
produces electricity by the use of renewable energy resources;
and

C. "renewable energy resource" means solar, wind,
hydropower, geothermal or biomass used as an energy resource.
As used in this subsection, "biomass" includes agriculture or
animal waste, small diameter timber, salt cedar and other
phreatophyte or woody vegetation removed from river basins or
watersheds in New Mexico, landfill gas and anaerobically
digested waste biomass.

SECTION 3.
[
NEW MATERIAL
] IMPOSITION OF TAX--RATE--
TAXABLE VALUE--DENOMINATION AS "RENEWABLE ENERGY PRODUCTION
TAX".--

A. For the privilege of generating electricity from
renewable energy resources, there is imposed on a generating
facility an excise tax equal to three and three-fourths percent
of the taxable value of each megawatt-hour, or portion thereof,
of electricity generated from renewable energy resources in
this state.

B. The taxable value for electricity generated from
renewable energy resources shall be the wholesale value of
electricity established by the United States energy information
administration for the southwest regional wholesale market.
The taxable event occurs when the electricity is generated.
The wholesale value shall be the monthly average wholesale
price for the month in which the taxable event occurs.

C. The tax imposed by this section shall be known
as the "renewable energy production tax".

SECTION 4.
[
NEW MATERIAL
] EXEMPTIONS.--

A. Exempted from the renewable energy production
tax is electricity produced from renewable energy resources by:

(1) the United States or any agency,
department or instrumentality thereof;

(2) the state of New Mexico or any political
subdivision thereof;

(3) any Indian nation, tribe or pueblo from
activities or transactions occurring on its sovereign
territory; or

(4) any foreign nation or agency,
instrumentality or political subdivision thereof, but only when
required by a treaty in force to which the United States is a
party.

B. Exempted from the renewable energy production
tax is electricity produced from renewable energy resources for
the personal consumption of the producer, including any excess
production of electricity not consumed by the producer that
does not exceed five hundred kilowatt-hours in a twenty-four-hour period.

SECTION 5.
[
NEW MATERIAL
] DATE PAYMENT DUE.--The tax
imposed by the Renewable Energy Production Tax Act is to be
paid on or before the twenty-fifth day of the month following
the month in which the taxable event occurs.

SECTION 6.
Section 7-1-2 NMSA 1978 (being Laws 1965,
Chapter 248, Section 2, as amended) is amended to read:

"7-1-2. APPLICABILITY.--The Tax Administration Act
applies to and governs:

A. the administration and enforcement of the
following taxes or tax acts as they now exist or may hereafter
be amended:

(1) Income Tax Act;

(2) Withholding Tax Act;

(3) Oil and Gas Proceeds and Pass-Through
Entity Withholding Tax Act;

(4) Gross Receipts and Compensating Tax Act,
Interstate Telecommunications Gross Receipts Tax Act and Leased
Vehicle Gross Receipts Tax Act;

(5) Liquor Excise Tax Act;

(6) Local Liquor Excise Tax Act;

(7) any municipal local option gross receipts
tax or municipal compensating tax;

(8) any county local option gross receipts tax
or county compensating tax;

(9) Special Fuels Supplier Tax Act;

(10) Gasoline Tax Act;

(11) petroleum products loading fee, which fee
shall be considered a tax for the purpose of the Tax
Administration Act;

(12) Alternative Fuel Tax Act;

(13) Cigarette Tax Act;

(14) Estate Tax Act;

(15) Railroad Car Company Tax Act;

(16) Investment Credit Act, rural job tax
credit, Laboratory Partnership with Small Business Tax Credit
Act, Technology Jobs and Research and Development Tax Credit
Act, Film Production Tax Credit Act, Affordable Housing Tax
Credit Act and high-wage jobs tax credit;

(17) Corporate Income and Franchise Tax Act;

(18) Uniform Division of Income for Tax
Purposes Act;

(19) Multistate Tax Compact;

(20) Tobacco Products Tax Act;

(21) the telecommunications relay service
surcharge imposed by Section 63-9F-11 NMSA 1978, which
surcharge shall be considered a tax for the purposes of the Tax
Administration Act;

(22) the Insurance Premium Tax Act;

(23) the Health Care Quality Surcharge Act;

(24) the Cannabis Tax Act; [
and
]

(25) the Health Care Delivery and Access Act;

and

(26) the Renewable Energy Production Tax Act;

B. the administration and enforcement of the
following taxes, surtaxes, advanced payments or tax acts as
they now exist or may hereafter be amended:

(1) Resources Excise Tax Act;

(2) Severance Tax Act;

(3) any severance surtax;

(4) Oil and Gas Severance Tax Act;

(5) Oil and Gas Conservation Tax Act;

(6) Oil and Gas Emergency School Tax Act;

(7) Oil and Gas Ad Valorem Production Tax Act;

(8) Natural Gas Processors Tax Act;

(9) Oil and Gas Production Equipment Ad
Valorem Tax Act;

(10) Copper Production Ad Valorem Tax Act;

(11) any advance payment required to be made
by any act specified in this subsection, which advance payment
shall be considered a tax for the purposes of the Tax
Administration Act;

(12) Enhanced Oil Recovery Act;

(13) Natural Gas and Crude Oil Production
Incentive Act; and

(14) intergovernmental production tax credit
and intergovernmental production equipment tax credit;

C. the administration and enforcement of the
following taxes, surcharges, fees or acts as they now exist or
may hereafter be amended:

(1) Weight Distance Tax Act;

(2) the workers' compensation fee authorized
by Section 52-5-19 NMSA 1978, which fee shall be considered a
tax for purposes of the Tax Administration Act;

(3) Uniform Unclaimed Property Act (1995);

(4) 911 emergency surcharge and the network
and database surcharge, which surcharges shall be considered
taxes for purposes of the Tax Administration Act;

(5) the solid waste assessment fee authorized
by the Solid Waste Act, which fee shall be considered a tax for
purposes of the Tax Administration Act;

(6) the water conservation fee imposed by
Section 74-1-13 NMSA 1978, which fee shall be considered a tax
for the purposes of the Tax Administration Act; and

(7) the gaming tax imposed pursuant to the
Gaming Control Act; and

D. the administration and enforcement of all other
laws, with respect to which the department is charged with
responsibilities pursuant to the Tax Administration Act, but
only to the extent that the other laws do not conflict with the
Tax Administration Act."

SECTION 7.
A new section of the Tax Administration Act is
enacted to read:

"[
NEW MATERIAL
] DISTRIBUTION--RENEWABLE ENERGY PRODUCTION
TAX.--A distribution pursuant to Section 7-1-6.1 NMSA 1978
shall be made to the severance tax permanent fund equal to the
net receipts attributable to the renewable energy production
tax."

SECTION 8.
APPLICABILITY.--The provisions of this act
apply to the production of electricity from renewable energy
resources beginning on and after January 1, 2027.

SECTION 9.
EFFECTIVE DATE.--The effective date of the
provisions of this act is January 1, 2027.

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