House Bill 211

HOUSE BILL 211

57th legislature - STATE OF NEW MEXICO - first session, 2025

INTRODUCED BY

Joanne J. Ferrary and Kathleen Cates and Marianna Anaya

and Debra M. Sariñana

 

 

 

 

AN ACT

RELATING TO TAXATION; AMENDING THE ELIGIBILITY AND APPLICATION REQUIREMENTS OF THE NEW SOLAR MARKET DEVELOPMENT INCOME TAX CREDIT; INCREASING THE AMOUNT OF CREDIT ALLOWED FOR SOLAR SYSTEMS WITH AT LEAST FIFTEEN KILOWATT-HOURS OF STORAGE CAPACITY; CREATING THE NEW SOLAR MARKET DEVELOPMENT CORPORATE INCOME TAX CREDIT.

 

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

     SECTION 1. Section 7-2-18.31 NMSA 1978 (being Laws 2020, Chapter 13, Section 1, as amended) is amended to read:

     "7-2-18.31. NEW SOLAR MARKET DEVELOPMENT INCOME TAX CREDIT.--

          A. For taxable years prior to January 1, 2032, a taxpayer who is not a dependent of another individual and who [on or after March 1, 2020] purchases and installs a solar thermal system or a photovoltaic system in a residence, business or agricultural enterprise in New Mexico owned by that taxpayer or by a federally recognized Indian nation, tribe or pueblo and held in leasehold by that taxpayer or a taxpayer who is not a dependent of another individual and who installs a photovoltaic system on a property and sells electricity from that system pursuant to a power purchase agreement to the owner or occupant of that property may apply for, and the department may allow, a credit against the taxpayer's tax liability imposed pursuant to the Income Tax Act in an amount provided in Subsection C of this section. The tax credit provided by this section may be referred to as the "new solar market development income tax credit".

          B. The purpose of the new solar market development income tax credit is to encourage the installation of solar thermal and photovoltaic systems in residences, businesses, nonprofit organizations and agricultural enterprises.

          C. The department may allow a new solar market development income tax credit of ten percent of the purchase and installation costs of a solar thermal or photovoltaic system or twenty percent of the purchase and installation costs of a photovoltaic system that has at least fifteen kilowatt-hours of solar storage capacity.

          D. The new solar market development income tax credit shall not exceed six thousand dollars ($6,000) per [taxpayer] property per taxable year, unless the tax credit is for a photovoltaic system that has at least fifteen kilowatt-hours of solar storage capacity, in which case the tax credit shall not exceed twelve thousand dollars ($12,000) per property per taxable year. The department shall allow a tax credit only for solar thermal and photovoltaic systems certified pursuant to Subsection E of this section.

          E. Subject to the limitation provided in Subsection F of this section, a taxpayer shall apply for certification of eligibility for the new solar market development income tax credit from the energy, minerals and natural resources department on forms and in the manner prescribed by that department. Completed applications shall be considered in the order received. The application shall include proof of purchase and installation of a solar thermal or photovoltaic system, that the system meets technical specifications and requirements relating to safety, code and standards compliance, that the system has passed inspection by an inspector certified by the political subdivision of the state in which the system is located, if required by that political subdivision, a power purchase agreement, if applicable, solar collector orientation and sun exposure, minimum system sizes, system applications and lists of eligible components and any additional information that the energy, minerals and natural resources department may require to determine eligibility for the credit. A dated certificate of eligibility shall be issued to the taxpayer providing the amount of the new solar market development income tax credit for which the taxpayer is eligible and the taxable year in which the credit may be claimed. A certificate of eligibility for a new solar market development income tax credit may be sold, exchanged or otherwise transferred to another taxpayer for the full [value] amount of the credit. The parties to such a transaction shall notify the department of the sale, exchange or transfer within ten days of the sale, exchange or transfer. Nothing in this section prohibits the sale, exchange or transfer from being agreed upon before the installation is made.

          F. The aggregate amount of credits that may be certified in a calendar year pursuant to Subsection E of this section [is as follows, and applications for certification received after these limitations have been met shall not be approved:

                (1) for calendar years 2020 through 2023, twelve million dollars ($12,000,000) for each calendar year; provided that if this limitation has been met for any of those calendar years, an additional total of twenty million dollars ($20,000,000) in credits may be certified for all of those calendar years; and provided further that credits certified pursuant to this paragraph shall be claimed only for taxable year 2023; and

                (2) for calendar years 2024 and thereafter, thirty million dollars ($30,000,000)] and Subsection D of Section 2 of this 2025 act is thirty million dollars ($30,000,000). If a taxpayer applies for and meets the requirements for the tax credit but the maximum aggregate amount of credits has been certified for that taxable year, the energy, minerals and natural resources department shall issue the taxpayer a certificate of eligibility for the next taxable year in which there are available certifications.

          G. A taxpayer may claim a new solar market development income tax credit for the taxable year in which the taxpayer purchases and installs a solar thermal or photovoltaic system. To receive a new solar market development income tax credit, a taxpayer shall apply to the department on forms and in the manner prescribed by the department within twelve months following the calendar year in which the system was installed [provided that, for a taxpayer who receives a certificate of eligibility pursuant to Paragraph (1) of Subsection F of this section, the taxpayer shall apply to the department within twelve months following the calendar year in which the certification is made]. The application shall include a certification made pursuant to Subsection E of this section.

          H. That portion of a new solar market development income tax credit that exceeds a taxpayer's tax liability in the taxable year in which the credit is claimed shall be refunded to the taxpayer.

          I. Married individuals filing separate returns for a taxable year for which they could have filed a joint return may each claim only one-half of the new solar market development income tax credit that would have been claimed on a joint return.

          J. A taxpayer may be allocated the right to claim a new solar market development income tax credit in proportion to the taxpayer's ownership interest if the taxpayer owns an interest in a business entity that is taxed for federal income tax purposes as a partnership or limited liability company and that business entity has met all of the requirements to be eligible for the credit. The total credit claimed by all members of the partnership or limited liability company shall not exceed the allowable credit pursuant to this section.

          K. A taxpayer allowed a tax credit pursuant to this section shall report the amount of the credit to the taxation and revenue department in a manner required by that department.

          L. The [taxation and revenue department shall compile an annual report on the new solar market development income tax credit that shall include] credit provided by this section shall be included in the tax expenditure budget pursuant to Section 7-1-84 NMSA 1978, including the total annual aggregate cost of the credit, the number of taxpayers approved by the department to receive the credit, the aggregate amount of credits approved and any other information necessary to evaluate the credit. [The department shall present the report to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the cost of the tax credit.]

          M. As used in this section:

                (1) "photovoltaic system" means an energy system that collects or absorbs sunlight for conversion into electricity; and

                (2) "solar thermal system" means an energy system that collects or absorbs solar energy for conversion into heat for the purposes of space heating, space cooling or water heating."

     SECTION 2. A new section of the Corporate Income and

Franchise Tax Act is enacted to read:

     SECTION 3. APPLICABILITY.--The provisions of this act apply to the purchase and installation of a solar thermal system or a photovoltaic system in taxable years beginning on or after January 1, 2025.

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