HB 153 — LOW-CARBON CONSTRUCTION MATERIAL REBATE ACT

[NEW MATERIAL] REBATE STRUCTURE--LIMITS.-- c e s k 23 A.

Material buyers shall be eligible for rebates e a n b 24 for low-carbon construction material, subject to the following u [ limits:

.233983.3 - 5 - HAFC/HENRC/HB 153 (1) a maximum rebate of five hundred thousand dollars ($500,000) per project;

(2) greatest emissions reductions relative HAFC/HENRC/HB 153 Page 5 to the emissions baseline for an equivalent conventionally produced material per unit of material;

and (5) other criteria as determined by the e t 17 department.

w l n d 18 SECTION 7.

[NEW MATERIAL] VERIFICATION AND CERTIFICATION = = 19 REQUIREMENTS.-- a l i a e r 20 A.

To receive a rebate, a material buyer shall a t m m 21 submit:

d r e 22 (1) an environmental product declaration for c e s k 23 the low-carbon construction material;

e a n b 24 (2) evidence of the price paid for the low- u [ carbon construction material and the person that paid the .233983.3 - 6 - HAFC/HENRC/HB 153 price;

[NEW MATERIAL] REPORTING.-- A.

HAFC/HENRC/HB 153 Page 6 (1) the number and value of rebates issued;

(4) market availability and pricing trends for e t 17 low-carbon construction material;

and w l n d 18 (5) program effectiveness and recommendations = = 19 for improvements.

a l i a e r 20 B.

The department shall make rebate awards and a t m m 21 program data publicly available on its website.

d r e 22 SECTION 9.

[NEW MATERIAL] ANTIFRAUD PROVISIONS.-- c e s k 23 A.

A material buyer or material supplier who e a n b 24 knowingly submits false information or fraudulent documentation u [ to obtain rebates under the Low-Carbon Construction Material .233983.3 - 7 - HAFC/HENRC/HB 153 Rebate Act is guilty of a fourth degree felony pursuant to Section 31-18-15 NMSA 1978 and shall be:

The department shall establish procedures for investigating suspected fraud and shall cooperate with law HAFC/HENRC/HB 153 Page 7 enforcement authorities in prosecution of a claim of fraud.

[NEW MATERIAL] SHORT TITLE.--Sections 10 through 13 of this act may be cited as the "Environmental Product Declaration Act".

[NEW MATERIAL] DEFINITIONS.--As used in the Environmental Product Declaration Act:

e t 17 A.

w l n d 18 (1) concrete and concrete mixtures, including = = 19 a l ready-mix concrete, shotcrete, precast concrete and concrete i a e r 20 masonry units;

a t m m 21 (2) cement;

d r e 22 (3) asphalt binder and asphalt mixtures;

c e s k 23 (4) steel;

e a n b 24 (5) glass;

u [ (6) roofing materials;

.233983.3 - 8 - HAFC/HENRC/HB 153 (7) insulation materials;

"environmental product declaration" means a HAFC/HENRC/HB 153 Page 8 declaration that is independently verified, provides a life- cycle assessment of a product's global warming potential and facilitates a comparison of environmental impacts between products fulfilling the same function;

"global warming potential" means the quantity of greenhouse gas emissions associated with a product expressed as e t 17 the carbon dioxide equivalent.

w l n d 18 SECTION 12.

[NEW MATERIAL] ENVIRONMENTAL PRODUCT = = 19 DECLARATION PROGRAM--CREATED--AUTHORITY--POWERSPROGRAM-- CREATED--AUTHORITY--POWERS AND DUTIES.-- a l i a e r 20 A.

The "environmental product declaration program" a t m m 21 is created in the department to enable the department to:

d r e 22 (1) assist manufacturers of covered materials c e s k 23 with the creation of environmental product declarations that e a n b 24 shall be shared with the department;

u [ (2) receive and analyze data associated with a .233983.3 - 9 - HAFC/HENRC/HB 153 manufacturer's environmental product declarations;

On or before January 1, 2027, the department shall promulgate rules to implement the Environmental Product HAFC/HENRC/HB 153 Page 9 Declaration Act, including rules on environmental product declaration verification and auditing procedures and on reporting requirements and formats.

No later than October 1, 2027 and October 1 e t 17 every year thereafter, the department shall publish a report w l n d 18 that includes:

= = 19 (1) the number of environmental product a l i a e r 20 declarations provided to the department, organized by type of a t m m 21 covered material;

d r e 22 (2) the geographic distribution of c e s k 23 manufacturing facilities;

e a n b 24 (3) an assessment of the number of businesses u [ within the state that manufacture covered materials and are .233983.3 - 10 - HAFC/HENRC/HB 153 equipped to issue environmental product declarations;

HAFC/HENRC/HB 153 Page 10 SECTION 13.

[NEW MATERIAL] ENVIRONMENTAL PRODUCT DECLARATIONS--REQUIREMENTS.--AnDECLARATIONS-- REQUIREMENTS.--An environmental product declaration shall:

facilitate a comparison of environmental impacts e t 17 between products fulfilling the same function;

w l n d 18 D.

meet or exceed internationally recognized = = 19 standards for environmental product declarations;

a l i a e r 20 E.

have been issued within five years of the date a t m m 21 submitted to the department;

and d r e 22 F.

c e s k 23 (1) a life-cycle assessment of a product's e a n b 24 global warming potential;

u [ (2) the manufacturing facility's location;

.233983.3 - 11 - HAFC/HENRC/HB 153 (3) the scope of life-cycle analysis;

HAFC/HENRC/HB 153 Page 11 SECTION 14.

[NEW MATERIAL] SHORT TITLE.--Sections 14 through 21 of this act may be cited as the "Industrial Carbon Reduction Act".

[NEW MATERIAL] DEFINITIONS.--As used in the Industrial Carbon Reduction Act:

"carbon intensity" means the quantity of carbon dioxide emitted during the production of one ton of an eligible product, including direct scope one emissions and indirect e t 17 scope two emissions;

w l n d 18 B.

"certification of eligibility" means the = = 19 a l certification provided by the department that qualifies an i a e r 20 eligible entity to be awarded a production incentive or an a t m m 21 investment grant;

d r e 22 C.

"department" means the economic development c e s k 23 department;

e a n b 24 D.

"eligible entity" means a person that owns or u [ operates a qualified industrial facility in New Mexico;

.233983.3 - 12 - HAFC/HENRC/HB 153 E.

"eligibility threshold" means a carbon intensity that is forty percent below the industry benchmark HAFC/HENRC/HB 153 Page 12 in a given year to be eligible for a production incentive or investment grant award;

"grant" means a monetary payment to an eligible entity to offset the cost of qualified expenditures made for a qualified industrial facility that results in the reduction of e t 17 carbon intensity of at least forty percent below the industry w l n d 18 benchmark for the eligible product being manufactured or = = 19 refined in the facility;

a l i a e r 20 I.

"incentive" means a per-ton subsidy made to an a t m m 21 eligible entity that reduces carbon intensity in the production d r e 22 of eligible products by the eligibility threshold or more;

c e s k 23 J.

"industry benchmark" means the industry-wide e a n b 24 average carbon intensity for a given eligible product;

u [ K.

"qualified expenditure" means a capital .233983.3 - 13 - HAFC/HENRC/HB 153 expenditure made on or after January 1, 2026 and prior to January 1, 2039 that is dedicated to and necessary for producing an eligible product in a manner that reduces the product's carbon intensity by at least forty percent below the industry benchmark;

"qualified industrial facility" means a facility located in New Mexico that is used to manufacture or HAFC/HENRC/HB 153 Page 13 refine an eligible product;

e t 17 P.

"scope three emissions" means indirect w l n d 18 greenhouse gas emissions, excluding scope two emissions;

and = = 19 Q.

a l i a e r 20 SECTION 16.

[NEW MATERIAL] CARBON REDUCTION PRODUCTION a t m m 21 INCENTIVE PROGRAM--DEPARTMENT DUTIES--INDUSTRY BENCHMARK--BENCHMARK--CARBON d r e 22 CARBON REDUCTION ACHIEVEMENTS--CALCULATIONS BY DEPARTMENT OF c e s k 23 ENVIRONMENT.-- e a n b 24 A.

The "carbon reduction production incentive u [ program" is created in the department.

The program provides .233983.3 - 14 - HAFC/HENRC/HB 153 incentives to New Mexico industries that meet or exceed the eligibility threshold as provided in this section.

Incentives shall be granted to eligible HAFC/HENRC/HB 153 Page 14 entities that produce eligible products, which production results in meeting or exceeding the eligibility threshold for each product produced.

e t 17 D.

Only new, incremental carbon reductions are w l n d 18 eligible for incentives;

provided that the reductions are below = = 19 the industry benchmark;

and provided further that the facility a l i a e r 20 meets the eligibility threshold.

a t m m 21 E.

The department shall promulgate rules based on d r e 22 the eligibility threshold set by the department of environment.

c e s k 23 The department shall open the first application period within e a n b 24 eighteen months of the effective date of this 2026 act.

The u [ first application period may apply to a limited subset of the .233983.3 - 15 - HAFC/HENRC/HB 153 eligible products listed in the rules of the department promulgated in accordance with the Industrial Carbon Reduction Act, in consultation with the department of environment.

An eligible entity shall apply for a certification of eligibility on forms and in the manner HAFC/HENRC/HB 153 Page 15 prescribed by the department.

and e t 17 (5) any other information required by the w l n d 18 department or requested by the department of environment.

= = 19 G.

The department shall keep application periods a l i a e r 20 open for a minimum of four months.

After the close of a given a t m m 21 application period, the department, in consultation with the d r e 22 department of environment, shall select applications submitted c e s k 23 during that period to be awarded certifications of eligibility.

e a n b 24 H.

In awarding certifications of eligibility, the u [ department, in consultation with the department of environment, .233983.3 - 16 - HAFC/HENRC/HB 153 shall prioritize applications that:

(1) represent projects with the highest likelihood of success, including consideration of technical feasibility and relevant financial details pertaining to the HAFC/HENRC/HB 153 Page 16 eligible entity;

In awarding certifications of eligibility, the e t 17 department shall state the aggregate incentive amount to which w l n d 18 the eligible entity is entitled over the term of the = = 19 certification of eligibility.

In calculating the aggregate a l i a e r 20 amount for a certification of eligibility, the department shall a t m m 21 consider:

d r e 22 (1) estimates submitted by the eligible c e s k 23 entity;

e a n b 24 (2) how best to allocate available money;

and u [ (3) other criteria as determined by standards .233983.3 - 17 - HAFC/HENRC/HB 153 set by the department of environment.

The department shall not issue certifications HAFC/HENRC/HB 153 Page 17 of eligibility in a total amount that exceeds available money.

The department of environment shall reset the industry benchmark every five e t 17 years.

w l n d 18 N.

The department shall publish on the department's = = 19 website on a regular basis the:

a l i a e r 20 (1) dollar value of the certifications of a t m m 21 eligibility issued each year;

d r e 22 (2) dollar value of each incentive granted in c e s k 23 each calendar year;

and e a n b 24 (3) remaining capacity for the issuance of u [ certifications of eligibility.

.233983.3 - 18 - HAFC/HENRC/HB 153 SECTION 17.

[NEW MATERIAL] DEPARTMENT OF ENVIRONMENT--ENVIRONMENT--RULEMAKING-- RULEMAKING--DATA--INDUSTRYHAFC/HENRC/HB 153 Page 18 DATA--INDUSTRY BENCHMARK CALCULATIONS.-- A.

(3) may include scope three emissions and use environmental product declarations for eligible products if the e t 17 declarations are available and in common use in more accurately w l n d 18 measuring industry benchmarks for eligible products;

and = = 19 (4) shall include procedures for determining:

a l i a e r 20 (a) the carbon intensity of products a t m m 21 made at facilities that commenced operations prior to January d r e 22 1, 2026;

c e s k 23 (b) the carbon intensity of products e a n b 24 made at facilities that commence operations on or after JanuaryHAFC/HENRC/HB u153 [Page 19 January 1, 2026;

and .233983.3 - 19 - HAFC/HENRC/HB 153 (c) industry benchmarks.

[NEW MATERIAL] DEPARTMENT--RULEMAKING.--In addition to other rules required pursuant to the Industrial Carbon Reduction Act, the department shall promulgate rules within twelve months of the effective date of that act to include:

e t 17 SECTION 19.

[NEW MATERIAL] CARBON REDUCTION INVESTMENT w l n d 18 GRANT PROGRAM.-- = = 19 a l A.

The "carbon reduction investment grant program" i a e r 20 is created in the department.

The program provides grants to a t m m 21 eligible entities to offset capital investments in qualified d r e 22 facilities located in New Mexico.

c e s k 23 B.

Prior to January 1, 2039, an eligible entity e a n b 24 that makes qualified expenditures for a new or renovated u [ qualified industrial facility may be eligible for a carbon .233983.3 - 20 - HAFC/HENRC/HB 153 Page 20 reduction investment grant from the department.

e t 17 (1) estimates of the carbon intensity of the w l n d 18 eligible products manufactured or refined in the facility for = = 19 which a grant is being sought;

a l i a e r 20 (2) estimates of the volume of production by a t m m 21 ton for each eligible product, with production estimates for at d r e 22 least ten years from the beginning of the production made c e s k 23 possible by the qualified expenditure;

and e a n b 24 (3) an estimate of the year in which the u [ qualified industrial facility will begin production of the .233983.3 - 21 - HAFC/HENRC/HB 153 Page 21 eligible product.

e t 17 (1) the dollar value of grants issued pursuant w l n d 18 to this section each year;

and = = 19 (2) any remaining available grant funding.

a l i a e r 20 H.

The department shall include a clawback a t m m 21 provision in the department's contract with the eligible entity d r e 22 that requires the eligible entity to repay the grant in the c e s k 23 event the eligible entity fails to meaningfully meet the e a n b 24 estimates set out in Subsection E of this section.

uHAFC/HENRC/HB [153 Page 22 SECTION 20.

[NEW MATERIAL] ELIGIBILITY FOR INCENTIVE.--An .233983.3 - 22 - HAFC/HENRC/HB 153 eligible entity shall not be eligible to claim the carbon reduction production incentive if the eligible entity claims in the same taxable year for the same equipment or activity a federal carbon dioxide sequestration tax credit pursuant to Section 45Q of the federal Internal Revenue Code of 1986, as that section may be amended or renumbered.

[NEW MATERIAL] REPORTS TO LEGISLATURE.-- A.

e t 17 (4) economic impacts, including jobs created w l n d 18 or retained, by type and salary range;

= = 19 (5) analysis of program effectiveness and a l i a e r 20 recommendations for improvements;

and a t m m 21 (6) any other data or other information deemed d r e 22 relevant by the department and the department of environment.

cHAFC/HENRC/HB e153 sPage k 23 B.

The report shall be submitted to the interim e a n b 24 legislative committee that studies economic development and u [ rural policy and the legislative finance committee by October 1 .233983.3 - 23 - HAFC/HENRC/HB 153 of each year, with a copy of the report filed with the legislative library.

-HAFC/HENRC/HB 24153 -Page 724 9 1125 13 15 e t 17 w l n d 18 = = 19 a l i a e r 20 a t m m 21 d r e 22 c e s k 23 e a n b 24 u [ .233983.3