HOUSE BILL 291

56th legislature - STATE OF NEW MEXICO - second session, 2024

INTRODUCED BY

Yanira Gurrola and Kathleen Cates and Susan K. Herrera and Eleanor Chávez

 

 

 

 

AN ACT

RELATING TO WATER; ALLOWING COUNTIES AND MUNICIPALITIES TO REQUIRE WATER HARVESTING, RECYCLING AND REUSE; CREATING THE WATER HARVESTING INCOME TAX CREDIT; CREATING STANDARDS FOR THE DESIGN, CONSTRUCTION, INSTALLATION AND INSPECTION OF RAINWATER AND STORM WATER CATCHMENT SYSTEMS; REQUIRING PERMITTING; PROVIDING MATCHING FUNDS FOR RAINWATER AND STORM WATER CATCHMENT SYSTEMS IN PUBLIC BUILDINGS AND FACILITIES.

 

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

     SECTION 1. A new section of Chapter 3 NMSA 1978 is enacted to read:

     "[NEW MATERIAL] WATER RESOURCES--COUNTY OR MUNICIPAL REQUIREMENTS.--

          A. For the purpose of preserving and protecting water resources and to provide an assured water supply for the community, a county or municipality may adopt an ordinance to require:

                (1) water harvesting and storage; or

                (2) water recycling and reuse.

          B. The state engineer shall promulgate rules necessary to carry out the provisions of this section.

          C. Agricultural water users or agricultural water rights owners are excluded from the provisions of Subsection A of this section."

     SECTION 2. A new section of the Income Tax Act is enacted to read:

     "[NEW MATERIAL] WATER HARVESTING INCOME TAX CREDIT.--

          A. A taxpayer who is not a dependent of another individual and who purchases and installs a permitted rainwater or storm water catchment system after January 1, 2024 and before December 31, 2034 in a residence or business in New Mexico owned by that taxpayer may apply for a tax credit against the taxpayer's tax liability imposed pursuant to the Income Tax Act in an amount up to twenty percent of the purchase and installation costs of the system. The tax credit provided by this section may be referred to as the "water harvesting income tax credit".

          B. The purpose of the water harvesting income tax credit is to provide an incentive for homeowners and businesses to collect and store harvested water for future use.

          C. The water harvesting income tax credit shall not exceed five thousand dollars ($5,000). The department shall allow a water harvesting income tax credit only for a water harvesting system permitted by the regulation and licensing department.

          D. The department may allow a maximum annual aggregate of two million dollars ($2,000,000) in water harvesting income tax credits per year. Applications for the tax credit shall be considered in the order received by the department.

          E. A taxpayer may claim a water harvesting income tax credit in the taxable year in which the taxpayer purchases and installs a water harvesting system. To receive a water harvesting income tax credit, a taxpayer shall apply to the department on forms and in the manner prescribed by the department. The application shall include a certification made pursuant to Subsection J of this section.

          F. If the requirements of this section have been complied with, the department shall issue to the applicant a document granting the tax credit allowed pursuant to this section. The document shall be numbered for identification and shall declare its date of issuance and the amount of the tax credit allowed pursuant to this section. The document may be submitted by the applicant with that taxpayer's income tax return or may be sold, exchanged or otherwise transferred to another taxpayer. 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.

          G. That portion of a water harvesting income tax credit that exceeds a taxpayer's tax liability in the taxable year in which the tax credit is claimed may be carried forward for a maximum of ten consecutive taxable years.

          H. 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 water harvesting income tax credit that would have been claimed on a joint return.

          I. A taxpayer may be allocated the right to claim a water harvesting 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 and that business entity has met all of the requirements to be eligible for the tax credit. The total tax credit claimed by all members of the partnership or limited liability company shall not exceed the allowable tax credit pursuant to Subsection C of this section.

          J. Prior to July 1, 2024, the regulation and licensing department, in consultation with the state engineer, shall adopt rules establishing procedures to provide certification of water harvesting systems for the purposes of obtaining a water harvesting income tax credit. The rules shall address technical specifications and requirements relating to safety, code and standards compliance, minimum and maximum system sizes, system applications and lists of eligible components. The regulation and licensing department may modify the specifications and requirements as necessary to maintain a high level of system quality and performance.

          K. A taxpayer allowed a water harvesting income tax credit pursuant to this section shall report the amount of the tax credit to the department in a manner required by the department.

          L. The department shall compile an annual report on the water harvesting income tax credit pursuant to this section that shall include the number of taxpayers approved by the department to receive the tax credit, the aggregate amount of tax credits approved and any other information necessary to evaluate the effectiveness of the tax credit. Beginning in 2028 and every five years thereafter that the tax credit is in effect, the department shall compile and present the annual reports to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the effectiveness and cost of the tax credit and whether the tax credit is performing the purpose for which it was created.

          M. As used in this section, "rainwater or storm water catchment system" means a system that is designed to provide for the collection of rainwater, storm water or untreated wastewater that has not come into contact with toilet waste for use as potable or non-potable water."

     SECTION 3. A new section of the Construction Industries Licensing Act is enacted to read:

     "[NEW MATERIAL] DIVISION--ADDITIONAL DUTIES--RAINWATER AND STORM WATER CATCHMENT SYSTEMS--RULES.--

          A. On or before January 1, 2025, the division shall, with the approval of the commission and after public hearing, adopt rules for:

                (1) the design, construction, installation and inspection of rainwater and storm water catchment systems that conform with generally recognized national standards; and

                (2) a person to become certified to design, construct, install or inspect a rainwater or storm water catchment system that conforms with generally recognized national standards, including qualifying certification programs.

          B. Upon the adoption of the division's rules for standards and certifications, the commission shall adopt rules:

                (1) to require a permit prior to the construction or installation of a rainwater or storm water catchment system, including a reasonable fee for the issuance of a permit; and

                (2) establishing wage standards for a person who designs, constructs, installs or inspects a rainwater or storm water catchment system.

          C. The division shall:

                (1) develop by rule a system to monitor the use of rainwater and storm water catchment systems that are permitted by the commission;

                (2) prepare a report of best practices for the operation of a rainwater and storm water catchment system and post it on the division's website; and

                (3) develop a list of entities that meet the division's standards for providing certification to design, construct, install or inspect a rainwater or storm water catchment system and post it on the division's website.

          D. As used in this section, "rainwater and storm water catchment system" or "rainwater or storm water catchment system" means a system that is designed to provide for the collection of rainwater, storm water or untreated wastewater that has not come into contact with toilet waste for use as potable or non-potable water."

     SECTION 4. A new section of the Environmental Improvement Act is enacted to read:

     "[NEW MATERIAL] MATCHING FUNDS--CONSTRUCTION AND INSTALLATION OF RAINWATER AND STORM WATER CATCHMENT SYSTEMS.--

          A. A person responsible for the management of a publicly owned building or facility may apply to the department for matching funds to construct or install a rainwater or storm water catchment system for the publicly owned building or facility.

          B. The department shall award matching funds, after review and approval of the project by the department, on a first-come, first-served basis.

          C. Except for a project that has an established labor agreement, a project awarded matching funds pursuant to this section shall:

                (1) pay wages to a person who designs, constructs, installs or inspects a rainwater or storm water catchment system in compliance with the wage standards developed by the construction industries commission;

                (2) use workers who are certified to design, construct, install or inspect a rainwater or storm water catchment system; and

                (3) maintain a workforce with fifteen percent registered with an apprenticeship program.

          D. As used in this section, "rainwater or storm water catchment system" means a system that is designed to provide for the collection of rainwater, storm water or untreated wastewater that has not come into contact with toilet waste for use as potable or non-potable water."

     SECTION 5. APPLICABILITY.--The provisions of Section 2 of this act apply to taxable years beginning on or after January 1, 2024.