HB0213

HOUSE BILL 213

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

INTRODUCED BY

Joanne J. Ferrary and Kathleen Cates and Debra M. Sariñana

AN ACT

RELATING TO TAXATION; CREATING THE SCHOOL SOLAR INCOME TAX CREDIT AND THE SCHOOL SOLAR CORPORATE INCOME TAX CREDIT.

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

SECTION 1. A new section of the Income Tax Act is enacted to read:

"[NEW MATERIAL] SCHOOL SOLAR INCOME TAX CREDIT.--

A. For taxable years prior to January 1, 2037, a taxpayer who is not a dependent of another individual and who, on or after the effective date of this section, installs a photovoltaic system on public school property or the property of a public post-secondary educational institution for the purpose of providing electricity to the school's or educational institution's buildings in New Mexico may claim a credit against the taxpayer's tax liability imposed pursuant to the Income Tax Act in an amount provided in Subsection B of this section. The tax credit provided by this section may be referred to as the "school solar income tax credit".

B. The amount of tax credit that may be allowed shall be in an amount equal to forty percent of:

(1) the cost to install the photovoltaic system on a public school property or the property of a public post-secondary educational institution, including labor, engineering, permitting, interconnection, support structure, racking, batteries, subcontracting costs as normally invoiced by the installer and other related costs; or

(2) the value of the system, as determined by a licensed appraiser and established by the taxpayer's application to the federal internal revenue service for a federal tax credit for a photovoltaic system.

C. A taxpayer who seeks to claim the tax credit provided by this section shall apply for certification of eligibility in the taxable year that the solar panels of the photovoltaic system are installed 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:

(1) proof of installation of a photovoltaic system on public school property or the property of a public post-secondary educational institution;

(2) proof that the system meets technical specifications and requirements relating to safety, code and standards compliance;

(3) proof that the system has passed inspection by an inspector certified by a political subdivision of the state or, if there is no certified inspector that services the location of the system's installation, a statement of such fact;

(4) proof that the system has system applications appropriate to the school or educational institution;

(5) a list of eligible components;

(6) if using appraised valuation to determine the amount of tax credit pursuant to Paragraph (2) of Subsection B of this section, proof of appraisal by a licensed appraiser, including the taxpayer's application to the federal internal revenue service for a federal tax credit for the photovoltaic system; and

(7) any additional information that the energy, minerals and natural resources department may require to determine eligibility for the credit.

D. If the energy, minerals and natural resources department determines that the taxpayer meets the requirements to claim the tax credit, that department shall issue to the taxpayer a dated certificate of eligibility providing the amount of the tax credit for which the taxpayer is eligible and the taxable year in which the credit may be claimed. The energy, minerals and natural resources department shall provide the department with the certificates of eligibility issued pursuant to this subsection in an electronic format at regularly agreed-upon intervals.

E. The total aggregate amount of school solar income tax credits and school solar corporate income tax credits pursuant to Section 2 of this 2025 act that may be certified as eligible is three hundred million dollars ($300,000,000), and the maximum that may be certified for a calendar year prior to 2028 is one hundred million dollars ($100,000,000). 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 department shall issue the taxpayer a certificate of eligibility for the next taxable year in which there are available certifications.

F. To receive the tax credit provided by this section, a taxpayer shall claim the credit on forms and in the manner prescribed by the department. The claim shall include a certificate of eligibility issued pursuant to this section.

G. That portion of 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.

H. A certificate of eligibility for the tax credit may be sold, exchanged or otherwise transferred to another taxpayer for the full value 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.

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 tax credit that would have been claimed on a joint return.

J. A taxpayer may be allocated the right to claim the 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. The department shall include the tax credit in the tax expenditure budget compiled pursuant to Section 7-1-84 NMSA 1978.

L. As used in this section:

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

(2) "public school" means that part of a school district that is a single attendance center in which instruction is offered by one or more teachers and is discernible as a building or group of buildings generally recognized as either an elementary, middle, junior high or high school or any combination of those and includes a charter school; and

(3) "public school property" means real property owned by a school district."

SECTION 2. A new section of the Corporate Income and

Franchise Tax Act is enacted to read:

"[NEW MATERIAL] SCHOOL SOLAR CORPORATE INCOME TAX

CREDIT.--

A. For taxable years prior to January 1, 2037, a taxpayer that installs a photovoltaic system on public school property or the property of a public post-secondary educational institution for the purpose of providing electricity to the school's or educational institution's buildings in New Mexico may claim a tax credit against the taxpayer's tax liability for that taxable year imposed pursuant to the Corporate Income and Franchise Tax Act. The tax credit provided by this section may be referred to as the "school solar corporate income tax credit".

B. The amount of tax credit that may be allowed shall be in an amount equal to forty percent of:

C. A taxpayer shall apply for certification of eligibility in the taxable year that the solar panels of the photovoltaic system are installed 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:

(1) proof of installation of a photovoltaic system on public school property or the property of a public post-secondary educational institution;

(2) proof that the system meets technical specifications and requirements relating to safety, code and standards compliance;

(4) proof that the system has system applications appropriate to the school or educational institution;

(5) a list of eligible components;

(7) any additional information that the energy, minerals and natural resources department may require to determine eligibility for the credit.

E. The total aggregate amount of school solar corporate income tax credits and school solar income tax credits pursuant to Section 1 of this 2025 act that may

be certified as eligible is three hundred million dollars

($300,000,000), and the maximum that may be certified for a calendar year prior to 2028 is one hundred million dollars ($100,000,000). 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 department shall issue the taxpayer a certificate of eligibility for the next taxable year in which there are available certifications.

G. That portion of 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. A taxpayer may be allocated the right to claim

the 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.

J. The department shall include the tax credit in the tax expenditure budget compiled pursuant to Section 7-1-84 NMSA 1978.

K. As used in this section:

(1) "photovoltaic system" means an energy

system that collects or absorbs sunlight for conversion into

electricity;

(2) "public school" means that part of a school district that is a single attendance center in which

instruction is offered by one or more teachers and is discernible as a building or group of buildings generally

recognized as either an elementary, middle, junior high or high

school or any combination of those and includes a public charter school; and

(3) "public school property" means real property owned by a school district."

SECTION 3. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2025.

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