AGRICULTURAL BIOMASS TAX CREDIT AMOUNTS

SB0113

SENATE BILL 113

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

INTRODUCED BY

Antonio Maestas

AN ACT

RELATING TO TAXATION; INCREASING THE AMOUNT OF AN AGRICULTURAL
BIOMASS INCOME TAX CREDIT AND AN AGRICULTURAL BIOMASS CORPORATE
INCOME TAX CREDIT.

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

SECTION 1.
Section 7-2-18.26 NMSA 1978 (being Laws 2010,
Chapter 84, Section 1, as amended) is amended to read:

"7-2-18.26. AGRICULTURAL BIOMASS INCOME TAX CREDIT.--

A. A taxpayer who owns a dairy or feedlot and who
files an individual New Mexico income tax return for a taxable
year ending prior to January 1, 2030, may claim, and the
department may allow, a tax credit equal to [
five dollars
($5.00)
]
ten dollars ($10.00)
per wet ton of agricultural
biomass transported from the taxpayer's dairy or feedlot to a
facility that uses agricultural biomass to generate electricity
or make biocrude or other liquid or gaseous fuel for commercial
use. The tax credit created in this section may be referred to
as the "agricultural biomass income tax credit".

B. Subject to the limitations pursuant to
Subsection D of this section, a taxpayer shall apply for
certification of eligibility for the agricultural biomass
income tax credit from the energy, minerals and natural
resources department on forms and in the manner prescribed by
that department. Completed applications shall be considered in
the order received. A dated certificate of eligibility shall
be issued to the taxpayer providing the amount of credit for
which the taxpayer is eligible and the taxable year in which
the credit may be claimed.

C. The energy, minerals and natural resources
department shall:

(1) adopt rules establishing procedures to
provide certification of transportation of agricultural biomass
to a qualified facility that uses agricultural biomass to
generate electricity or make biocrude or other liquid or
gaseous fuel for commercial use for purposes of obtaining an
agricultural biomass income tax credit; and

(2) provide the department appropriate
information for all certificates of eligibility in a secure
manner on regular intervals agreed upon by both departments.

D. The aggregate amount of agricultural biomass
income tax credits and agricultural biomass corporate income
tax credits that may be certified is five million dollars
($5,000,000) per calendar year. Applications for certification
received after this limitation shall not be approved. Any
amount of credit that remains unused in a taxable year may be
available for certification for a maximum of four consecutive
taxable years until the credit is fully utilized.

E. Any portion of the agricultural biomass income
tax credit that exceeds a taxpayer's income tax liability in
the taxable year in which the credit is being claimed may be
carried forward for up to three consecutive taxable years. A
certificate of eligibility for an agricultural biomass income
tax credit may be sold, exchanged or otherwise transferred to
another taxpayer for the full value of the credit. The parties
to such a transaction shall notify the department of the sale,
exchange or transfer within ten days of the sale, exchange or
transfer.

F. A taxpayer who otherwise qualifies
for
and
claims an agricultural biomass income tax credit with respect
to a dairy or feedlot owned by a partnership or other business
association of which the taxpayer is a member may claim the
credit only in proportion to that taxpayer's interest in the
partnership or business association. The total agricultural
biomass income tax credits claimed in the aggregate with
respect to the same dairy or feedlot by all members of the
partnership or business association shall not exceed the amount
of the credit that could have been claimed by a single owner of
the dairy or feedlot.

G. Married individuals 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 credit that would
have been allowed on a joint return.

H. A taxpayer who claims an agricultural biomass
income tax credit shall not also claim an agricultural biomass
corporate income tax credit for transportation of the same
agricultural biomass on which the claim for that agricultural
biomass income tax credit is based.

I. A taxpayer allowed a tax credit pursuant to this
section shall claim the credit on forms and in a manner
required by the department.

J. The tax credit provided by this section shall be
included in the tax expenditure budget pursuant to Section
7-1-84 NMSA 1978, including the annual aggregate cost of the
tax credit.

K. As used in this section:

(1) "agricultural biomass" means wet manure
meeting specifications established by the energy, minerals and
natural resources department from either a dairy or feedlot
commercial operation;

(2) "biocrude" means a nonfossil form of
energy that can be transported and refined using existing
petroleum refining facilities and that is made from
biologically derived feedstocks and other agricultural biomass;

(3) "feedlot" means an operation that fattens
livestock for market; and

(4) "dairy" means a facility that raises
livestock for milk production."

SECTION 2.
Section 7-2A-26 NMSA 1978 (being Laws 2010,
Chapter 84, Section 2, as amended) is amended to read:

"7-2A-26. AGRICULTURAL BIOMASS CORPORATE INCOME TAX
CREDIT.--

A. A taxpayer that files a New Mexico corporate
income tax return for a taxable year ending prior to January 1,
2030 for a dairy or feedlot owned by the taxpayer may claim
against the taxpayer's corporate income and franchise tax
liability, and the department may allow, a tax credit equal to
[
five dollars ($5.00)
]
ten dollars ($10.00)
per wet ton of
agricultural biomass transported from the taxpayer's dairy or
feedlot to a facility that uses agricultural biomass to
generate electricity or make biocrude or other liquid or
gaseous fuel for commercial use. The credit provided in this
section may be referred to as the "agricultural biomass
corporate income tax credit".

B. Subject to the limitations of Subsection C of
this section, a taxpayer shall apply for certification of
eligibility for the agricultural biomass corporate income tax
credit from the energy, minerals and natural resources
department on forms and in the manner prescribed by that
department. Completed applications shall be considered in the
order received. A dated certificate of eligibility shall be
issued to the taxpayer providing the amount of the agricultural
biomass corporate income tax credit for which the taxpayer is
eligible and the taxable year in which the credit may be
claimed. The energy, minerals and natural resources department
shall adopt rules establishing procedures to provide
certification of transportation of agricultural biomass to a
qualified facility that uses agricultural biomass to generate
electricity or make biocrude or other liquid or gaseous fuel
for commercial use for purposes of obtaining an agricultural
biomass corporate income tax credit.

C. The aggregate amount of agricultural biomass
income tax credits and agricultural biomass corporate income
tax credits that may be certified is five million dollars
($5,000,000) per calendar year, and applications for
certification received after this limitation shall not be
approved. Any remaining credits that remain unused in a
taxable year may be available for certification for a maximum
of four consecutive taxable years until the credits are fully
utilized. The energy, minerals and natural resources
department shall provide the department appropriate information
for all certificates of eligibility in a secure manner on
regular intervals agreed upon by both departments.

D. Any portion of the agricultural biomass
corporate income tax credit that exceeds a taxpayer's corporate
income tax liability in the taxable year in which the credit is
being claimed may be carried forward for up to three
consecutive taxable years. A certificate of eligibility for an
agricultural biomass corporate income tax credit may be sold,
exchanged or otherwise transferred to another taxpayer for the
full value of the credit. The parties to such a transaction
shall notify the department of the sale, exchange or transfer
within ten days of the sale, exchange or transfer.

E. A taxpayer that claims an agricultural biomass
corporate income tax credit shall not also claim an
agricultural biomass income tax credit for transportation of
the same agricultural biomass on which the claim for that
agricultural biomass income tax credit is based.

F. A taxpayer allowed a tax credit pursuant to this
section shall claim the credit on forms and in a manner
required by the department.

G. The tax credit provided by this section shall be
included in the tax expenditure budget pursuant to Section
7-1-84 NMSA 1978, including the annual aggregate cost of the
tax credit.

H. As used in this section:

(1) "agricultural biomass" means wet manure
meeting specifications established by the energy, minerals and
natural resources department from either a dairy or feedlot
commercial operation;

(2) "biocrude" means a nonfossil form of
energy that can be transported and refined using existing
petroleum refining facilities and that is made from
biologically derived feedstocks and other agricultural biomass;

(3) "feedlot" means an operation that fattens
livestock for market; and

(4) "dairy" means a facility that raises
livestock for milk production."

SECTION 3.
APPLICABILITY.--The provisions of this act
apply to taxable years beginning on or after January 1, 2026.

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