Natural Gas Laws and Incentives in New Mexico

The list below contains summaries of all New Mexico laws and incentives related to natural gas.

Laws and Regulations

Alternative Fuel Definition

Alternative fuels are defined as natural gas, liquefied petroleum gas (propane), 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 pure biodiesel (B100) standards. (Reference New Mexico Statutes 13-1B-2 and 57-19-27)

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

A minimum of 75% of state government and educational institution fleet light-duty vehicles purchased must be HEVs or bi-fuel or dedicated AFVs. 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, effective July 1, 2018. Funds must be used for the purchase of vehicles that operate on natural gas, liquefied petroleum gas (propane), electricity, or hydrogen. The maximum amount of a loan per vehicle must not exceed the incremental cost of acquiring the vehicle or the following amounts:

Gross Vehicle Weight Rating (GVWR)Incentive Amount
Up to 14,000 pounds (lbs.)$5,000
14,000 lbs.-26,000 lbs.$10,000
Over 26,000 lbs.$20,000

Projected fuel cost savings from using the AFV is considered when the loan repayment schedule is developed.

(Reference House Bill 165, 2018 and New Mexico Statutes 13-1B-1 through 13-1B-7)

Alternative Fuels Tax

Alternative fuels subject to the New Mexico excise tax include liquefied petroleum gas (propane), compressed natural gas (CNG), and liquefied natural gas (LNG). The excise tax imposed on propane is $0.12 per gallon, and the excise tax imposed on CNG and LNG is $0.133 and $0.206 per gallon, respectively. A gallon is measured as 3.785 liters of propane, 5.66 pounds (lbs.) or 126.67 standard cubic feet of CNG, and 6.06 lbs. of LNG. 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. For tax forms and instructions, refer to the New Mexico Taxation and Revenue Department website. (Reference New Mexico Statutes 7-16B-1 through 7-16B-10)

State Incentives

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 and Natural Gas Vehicle (NGV) 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 (lbs.) to compensate for the additional weight of the idle reduction technology. A vehicle primarily powered by natural gas may exceed the state's gross vehicle weight limits by a weight equal to the difference between the average weight of the vehicle with the natural gas tank and fueling system and the average weight of a comparable vehicle with a diesel tank and fueling system. The NGV maximum gross weight may not exceed 82,000 lbs. (Reference New Mexico Statutes 66-7-410)

More Laws and Incentives

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