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New Mexico Incentives and Laws

Listed below are the summaries of all current New Mexico incentives, laws, regulations, funding opportunities, and other initiatives related to alternative fuels and vehicles, advanced technologies, or air quality. You can go directly to summaries of:

• State Incentives (7)
• Utility/Private Incentives (1)
• Laws and Regulations (8)

State Incentives

Biodiesel Blend Tax Credit

A tax credit against the state corporate income tax liability is available for each gallon of blended biodiesel fuel containing a minimum of 2% biodiesel (B2), as long as the state special fuel excise tax was paid on the fuel. From January 1, 2012, through December 31, 2012, the credit amount is $0.01 per gallon. (Reference New Mexico Statutes 7-2A-23)

Biodiesel Blending Facility Tax Credit

A tax credit is available for up to 30% of the cost of purchasing or installing equipment used to produce biodiesel blends containing at least 2% biodiesel (B2). The tax credit is limited to $50,000 per facility and is claimed against gross receipts tax or compensating tax. Individuals or organizations must apply for and obtain a certificate of eligibility from the New Mexico Energy, Minerals, and Natural Resources Department before claiming the credit. (Reference New Mexico Statutes 7-9-79.2)

Biofuels Production Tax Deduction

The cost associated with purchasing qualified biomass feedstocks to be processed into biofuels may be deducted in computing the compensating tax due under the New Mexico Gross Receipts and Compensating Tax Act. For the purpose of this incentive, biofuels include ethanol, methanol, methane, and hydrogen. (Reference New Mexico Statutes 7-9-98)

Alternative Fuel and Advanced Vehicle System Manufacturing Incentive

The Alternative Energy Product Manufacturers Tax Credit is a credit against combined reporting taxes (gross receipts, compensating, and withholding) for qualified manufacturers of alternative energy products, which includes hydrogen and fuel cell vehicle systems, and electric and hybrid electric vehicles. The credit is limited to 5% of qualifying expenditures, and manufacturers must fulfill job creation requirements to be eligible. Qualified manufacturers must apply for and receive approval from the New Mexico Taxation and Revenue Department before they may claim the credit. (Reference New Mexico Statutes 7-9J)

Alternative Fuel Vehicle (AFV) and Fueling Infrastructure Grants

The New Mexico Energy, Minerals, and Natural Resources Department administers the Clean Energy Grants Program, which provides grants for projects using clean energy technologies (including alternative fuel vehicles and fueling infrastructure) and projects that provide clean energy education, technical assistance, and training programs. These grants are provided on a competitive basis to qualifying entities such as municipalities and county governments, state agencies, state universities, public schools, post-secondary educational institutions, and Indian nations, tribes, and pueblos. As of April 2012, funding for this program is unavailable. (Reference New Mexico Statutes 71-7-1 to 71-7-7)

Alternative Fuel Tax Exemption

Alternative fuel distributed by or used for U.S. government, state government, or Indian nation, tribe or pueblo purposes, is exempt from the state excise tax. (Reference New Mexico Statutes 7-16B-5)

Idle Reduction Weight Exemption

Any vehicle or combination of vehicles equipped with idle reduction technology may exceed the state's gross and axle weight limits by up to 400 pounds to compensate for the additional weight of the idle reduction technology. (Reference New Mexico Statutes 66-7-410)

Utility/Private Incentives

Natural Gas Fleet Services

Clean Energy Fuels offers services to the natural gas vehicle industry that include competitive compressed natural gas pricing for larger fleet customers, as well as alternative fuel vehicle financing.

Laws and Regulations

Biodiesel Blend Mandate

All diesel fuel sold to state agencies, political subdivisions of the state, and public schools for use in on-road motor vehicles must contain at least 5% biodiesel (B5). After July 1, 2012, all diesel fuel sold to consumers for use in on-road motor vehicles must contain at least B5. The New Mexico Department of Agriculture and the Energy, Minerals, and Natural Resources Department may suspend these requirements for up to six months if there are insufficient amounts of biodiesel available or if the price of biodiesel significantly exceeds the price of diesel fuel for at least two months. (Reference New Mexico Statutes 57-19-28 and 57-19-29)

Low Emission Vehicle (LEV) Standards

All new passenger vehicles, light-duty trucks, and medium-duty vehicles offered for sale or lease in or imported into New Mexico must be certified to California motor vehicle emissions standards as specified in Title 13 of the California Code of Regulations. (Reference New Mexico Administrative Code 20.2.88)

Green Jobs Training Program

Under the Green Jobs Act, the New Mexico Higher Education Department (Department) must establish a state plan for the development of green jobs training programs focusing on rural and tribal communities, including biofuel production and distribution. In addition, the Department must develop a state research program in partnership with the Workforce Solutions Department to collect labor market data for renewable energy industries. The New Mexico Green Jobs Portal was created to support job seekers through education and career development resources and the New Mexico Department of Finance and Administration administers a green jobs fund to support the programs. (Reference New Mexico Statutes 9-15D)

Biofuels Strategic Plan

The Green Jobs Cabinet prepared a statewide strategic plan for clean energy and clean technology economic development and job creation, to include biofuels. The New Mexico Department of Agriculture must work with the biofuels industry, state universities, national laboratories, and industry groups to evaluate the economic opportunities of biofuel production in the state. Toward a New Mexico State Plan for Biofuels Leadership, published in May 2010, provides recommendations to grow and develop the biofuels sector in the state. (Reference Executive Order 2009-002, 2009, and Executive Order 2010-001, 2010)

Alternative Fuel Vehicle (AFV) and Hybrid Electric Vehicle (HEV) Acquisition Requirements

A minimum of 75% of state government and educational institution fleet vehicles purchased must be HEVs or bi-fuel or dedicated AFVs, which includes plug-in electric vehicles. Vehicles must meet or exceed the federal corporate average fuel economy standards. Certified law enforcement pursuit vehicles and emergency vehicles are exempt from this requirement. The New Mexico Energy, Minerals and Natural Resources Department may grant additional exemptions based on the availability and suitability of vehicles, as well as fuel availability and cost.

Up to $5 million is authorized for a revolving loan fund for AFV acquisitions by state agencies, political subdivisions, and educational institutions. The maximum amount of a loan per vehicle must not exceed the actual cost of acquiring the vehicle, or $3,000, whichever is less. Projected fuel cost savings from using the AFV is considered when the loan repayment schedule is developed.

(Reference New Mexico Statutes 13-1B)

Neighborhood Electric Vehicle (NEV) Access to Roadways

A NEV is defined as a four-wheeled electric motor vehicle that has a maximum speed of at least 20 miles per hour (mph) but not more than 25 mph and complies with the federal requirements specified in Title 49 of the Code of Federal Regulations, section 571.500. NEVs may only be used on roads with speed limits of up to 35 mph, though NEVs may cross roads or highways with greater speed limits at intersections or permitted crossing points. A local authority or the New Mexico Department of Transportation may prohibit the operation of NEVs on any road under its jurisdiction if the governing body determines that the prohibition is necessary in the interest of safety. (Reference New Mexico Statutes 66-1-4.12 and 66-3-1103)

Alternative Fuel Definition

The definition of an alternative fuel includes natural gas, liquefied petroleum gas, electricity, hydrogen, fuel mixtures containing not less than 85% ethanol or methanol, and fuel mixtures containing not less than 20% vegetable oil, or a water-phased hydrocarbon fuel emulsion in an amount not less than 20% by volume. Biodiesel is defined as a renewable, biodegradable, mono alkyl ester combustible liquid fuel that is derived from agricultural plant oils or animal fats and meets current ASTM biodiesel standards. (Reference New Mexico Statutes 13-1B-2 and 57-19-27)

Alternative Fuels Tax

The excise tax imposed on an alternative fuel distributed in New Mexico is $0.12 per gallon. Alternative fuels subject to the excise tax include liquefied petroleum gas or propane, compressed natural gas, and liquefied natural gas. Alternative fuel purchased for distribution is not subject to the excise tax at the time of purchase or acquisition, but the tax is due on any alternative fuel at the time it is dispensed or delivered into the tank of a motor vehicle. Alternative fuel distributors must be licensed by the state.

In lieu of the per gallon tax, owners of alternative fuel vehicles with a gross vehicle weight rating (GVWR) not exceeding 54,000 pounds (lbs.) may pay an annual tax according to the following schedule:

(Reference New Mexico Statutes 7-16B)