Governor Susana Martinez today signed HB 120, Locomotive Fuel Gross Receipts Tax exemption legislation, designed to encourage further growth of the railroad industry, as well as continued growth of exports and manufacturing in New Mexico.
HB 120 will allow railroad operators to be eligible to receive GRT-free fuel after making a capital investment of at least $50 million on eligible infrastructure improvements, including railroad locomotive refueling facilities, railroad track and signals, and supporting railroad networks located in New Mexico after July 1, 2012.
"Encouraging businesses to invest in our state and expand our existing infrastructure for commerce is vital to strengthening New Mexico's economy and creating jobs," says Governor Martinez. "New Mexico has a deep and rich history with rail transportation and economic development, and the growth and vitality we are currently seeing in Santa Teresa in the wake of new investment by Union Pacific shows remarkable progress in our efforts to position New Mexico well for the production and movement of goods in our state."
The gross receipts tax deduction for railroad fuel was adopted by the 2011 legislature in order to encourage development of the new railroad re-fueling facility in southern New Mexico. This legislation lowers the new investment requirements for this GRT deduction.
Belen-area Representative Alonso Baldonado worked closely with Representative Patty Lundstrom and Senator Phil Griego to get this legislation to the Governor's desk.
"Many generations of New Mexico families have made their living by working for the railroads. I grew up in Belen, which is a major refueling point for the BNSF railway, and I can tell you firsthand about the families that have thrived because of the jobs provided here," says Rep. Baldonado. "This is an industry that invests millions of dollars in infrastructure that roots them in our communities, ensuring they will be here for future generations. By enacting HB 120, the New Mexico Legislature and Governor Martinez have come together to bring permanent great paying jobs to our citizens."
Governor Martinez also recently announced that her administration and BNSF have signed an agreement that requires BNSF to return $5 million to the State of New Mexico, funds that had been expended in 2008 to purchase a portion of railroad track from Lamy to the Colorado border - a section of track over which the State never officially took ownership. The agreement also converts a $50 million escrow
account for liability protections on the RailRunner track to a line of credit that will allow these funds to no longer be encumbered and instead allowed to be used for highway construction and maintenance projects in New Mexico.
"This agreement was long overdue for New Mexico taxpayers who have been on the hook for this money for far too long. I'm thankful we can return this money to New Mexicans and use it to address our state's pressing transportation priorities," said Governor Martinez.