SENATE BILL 630

52nd legislature - STATE OF NEW MEXICO - first session, 2015

INTRODUCED BY

John M. Sapien

AN ACT

RELATING TO THE ENVIRONMENT; ENACTING THE CARBON CREDIT ACT; DEFINING CARBON CREDIT RIGHTS; PROVIDING FOR A CARBON CREDIT OVERSIGHT BOARD; MAKING AN APPROPRIATION.

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

     SECTION 1. [NEW MATERIAL] SHORT TITLE.--This act may be cited as the "Carbon Credit Act".

     SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Carbon Credit Act:

          A. "board" means the carbon credit oversight board;

          B. "carbon credit" or "carbon offset" means an intangible asset representing a reduction corresponding to one metric ton of carbon dioxide equivalent;

          C. "carbon dioxide equivalent" means a numerical value defined by multiplying the mass of the gas by its global warming potential;

          D. "global warming potential" means a numerical value representing the total energy that a gas absorbs over a one-hundred-year period compared to carbon dioxide as defined by the United States environmental protection agency;

          E. "greenhouse gas" means any gas, as defined by the United States environmental protection agency, having global warming potential;

          F. "natural resource" means any mineral or organic material that can be extracted or harvested and located on or beneath the surface of the earth;

          G. "real property" means all land, structures, firmly attached and integrated equipment, anything growing on the land and all interests in the property, including its natural resources;

          H. "reduction" means a decrease in greenhouse gas emissions resulting from:

                (1) changes to a business, industrial or agricultural operation, practice, process or methodology;

                (2) remediation of contaminated land or remediation of land damaged by natural disaster;

                (3) the generation of electrical power utilizing wind, solar, hydro, geothermal or nuclear sources substituted for electrical power generated using fossil fuels; or

                (4) sequestration; and

          I. "sequestration" means the removal of greenhouse gases from the atmosphere and the accumulation of those greenhouse gases in a solid or liquid form within oceans, plant matter, soil or geologic formations through an industrial, chemical or biological process.

     SECTION 3. [NEW MATERIAL] CARBON OFFSET RIGHTS.--

          A. Except as defined in Subsection B of this section, a carbon credit shall constitute a contract right.

          B. A carbon credit may be intangible real property; provided that the carbon credit is associated with a natural resource having a specified location and having a verifiable, unbroken chain of custody associating the natural resource to the carbon credit.

     SECTION 4. [NEW MATERIAL] BOARD--POWERS.--

          A. The state auditor shall establish a five-member "carbon credit oversight board" composed of the following members:

                (1) one board member representing the state auditor;

                (2) one board member representing the audit and compliance division of the taxation and revenue department;

                (3) one board member representing the energy, minerals and natural resources department; and

                (4) two industry board members who shall be New Mexico residents representing New Mexico businesses directly involved in the creation, management or transfer of carbon credits.

          B. Board members representing government agencies shall be appointed by the responsible department secretary for a one-year term. Board members representing industry shall be appointed by the governor for staggered two-year terms. The initial terms for industry board members shall be one term of two years and one term of three years.

          C. The board shall review and audit chain of title methodologies for compliance with the Carbon Credit Act.

          D. Industry board members shall not receive a salary but shall be entitled to per diem pursuant to the Per Diem and Mileage Act. 

     SECTION 5. APPROPRIATION.--

          A. One hundred thousand dollars ($100,000) is appropriated from the general fund to the state auditor for expenditure in fiscal year 2016 to undertake the duties and activities described in the Carbon Credit Act, to be allocated as follows:

                (1) eighty thousand dollars ($80,000) for carbon credit oversight board operations; and

                (2) twenty thousand dollars ($20,000) for per diem and mileage reimbursement and other reasonable expenses relating to the performance of the duties of the carbon credit oversight board.

          B. Any unexpended or unencumbered balance remaining at the end of fiscal year 2016 shall revert to the general fund.

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