SB 630: CARBON CREDIT ACT

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.

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MOD SB 630
CARBON CREDIT ACT

Legislative URL:

SB 630 on nmlegis.gov

Emergency Clause:

No

Germane:

N/A

Location:

SCONC

Action:

[10] SCONC/SJC/SFC-SCONC API.

Issue(s):

Air Quality

Related Legislators

Bill Sponsor:

John Sapien

Related Documents

Downloads:

Introduced
Fiscal Impact Report

Summary

This bill creates the Carbon Credit Act and requires that the State Auditor establish a five-member Carbon Credit Oversight Board with representatives of the State Auditor; the Audit and Compliance Division of the Taxation and Revenue Department; the Energy, Minerals and Natural Resources Department; and

two New Mexico residents appointed by the governor and representing New Mexico businesses directly involved in the creation, management or transfer of carbon credits.

The bill provides that a carbon credit is a contract right; and that a carbon credit may be intangible real property, provided that it 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.

A “carbon credit” or “carbon offset” is defined as an intangible asset representing a decrease in greenhouse gas emissions equivalent to one metric ton of carbon dioxide and 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, i.e. 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.

The bill’s sole requirement, other than establishment of the Carbon Credit Oversight Board, is that the board “review and audit chain of title methodologies for compliance with the Carbon Credit Act.”

$100,000 is appropriated from the General Fund to the State Auditor for fiscal year 2016, including $80,000 for board operations; and $20,000 for per diem and mileage reimbursement and other reasonable expenses relating to the performance of the Carbon Credit Oversight Board.

A potential benefit of the bill might be additional encouragement for reduced greenhouse emissions stimulated by the use of carbon credits and the introduction of state-level oversight of an increasingly important economic and conservation activity. Potential concerns might include the bill’s lack of any detail as to the board’s objectives, responsibilities or powers; and the lack of any clear indication as to what “compliance with the Carbon Credit Act” would entail.

There is good information about carbon credits and the current state of credit activity in New Mexico and other Southwestern states at:
http://www.nrcs.usda.gov/Internet/FSE_DOCUMENTS/nrcs144p2_066823.pdf
and http://www.rmfu.org/rmfu-carbon-credit-program-expands/