HOUSE BILL 472

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

INTRODUCED BY

Jonathan A. Henry and Rebecca Dow

AN ACT

RELATING TO TAXATION; CREATING THE ABANDONED BUILDING REVITALIZATION CORPORATE INCOME TAX CREDIT.

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

     SECTION 1. A new section of the Corporate Income and

Franchise Tax Act is enacted to read:

     "[NEW MATERIAL] ABANDONED BUILDING REVITALIZATION CORPORATE INCOME TAX CREDIT.--

          A. A taxpayer that, beginning on the effective date of this section and prior to January 1, 2036, incurs rehabilitation expenses for the rehabilitation of an abandoned building in New Mexico may claim a credit against the taxpayer's tax liability imposed pursuant to the Corporate Income and Franchise Tax Act. The tax credit provided by this section may be referred to as the "abandoned building revitalization corporate income tax credit".

          B. The credit provided by this section shall be in an amount equal to twenty-five percent of the rehabilitation expenses incurred, up to a maximum of seven hundred thousand dollars ($700,000) per taxpayer; provided that the rehabilitation expenses are at least eighty percent but not more than one hundred twenty-five percent of the estimated rehabilitation expenses stated in the notice of intent to rehabilitate pursuant to Subsection C of this section.

          C. Prior to incurring rehabilitation expenses, a taxpayer shall apply for pre-certification from the economic development department on forms and in the manner prescribed by that department. The application shall include a proposal for the abandoned building rehabilitation project and a notice of intent to rehabilitate. If the economic development department determines that the projected costs are likely to meet the requirements to be rehabilitation expenses eligible for the tax credit, that department shall issue a pre-certification to the taxpayer; provided that pre-certification received pursuant to this subsection shall not mean that the actual costs for the abandoned building rehabilitation project will be approved for a credit provided by this section.

          D. Within one calendar year of the date the building is placed in service, the taxpayer shall apply for certification of eligibility from the economic development department on forms and in the manner prescribed by that department and including an affidavit from a certified public accountant verifying that the rehabilitation expenses were incurred by the taxpayer and meet the requirements of this section. The aggregate amount of credits that may be certified as eligible in a calendar year is twenty million dollars ($20,000,000). Completed applications shall be considered in the order received. If a taxpayer is eligible for the credit, a dated certificate of eligibility shall be issued to the taxpayer providing the amount of credit for which the taxpayer is eligible; provided that applications for certification received after the limitation on the aggregate amount of credits has been met in a calendar year shall not be approved.

          E. A certificate of eligibility provided by this section 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.

          F. That portion of approved credit claimed by a taxpayer that exceeds the taxpayer's income tax liability in the taxable year in which the credit is claimed may be carried forward for five consecutive taxable years.

          G. To receive a tax credit provided by this section, a taxpayer shall claim the credit on forms and in the manner prescribed by the department within twelve months following the calendar year in which the certificate of eligibility was issued.

          H. The credit provided by this section shall be included in the tax expenditure budget pursuant to Section 7-1-84 NMSA 1978, including the annual aggregate cost of the credit.

          I. As used in this section:

                (1) "abandoned building" means a structure or part of a structure in New Mexico that has been unoccupied and non-operational for income-producing purposes for at least five years prior to the filing of a notice of intent to rehabilitate;

                (2) "building site" means an abandoned building and the parcel of land upon which it is located, including any improvements directly related to the building's income-producing use;

                (3) "notice of intent to rehabilitate" means a letter submitted by a taxpayer prior to incurring rehabilitation expenses that provides the building's location, estimated expenses and proposed use upon completion;

                (4) "placed in service" means the rehabilitation of the building site is complete and the building is ready for its intended use; and

                (5) "rehabilitation expenses" means capital expenditures incurred in the renovation or redevelopment of an abandoned building, including structural repairs, environmental remediation, site improvements and new construction related to the project, but excluding costs related to acquisition and personal property."

     SECTION 2. DELAYED REPEAL.--Section 1 of this act is repealed effective January 1, 2037.

     SECTION 3. APPLICABILITY.--The provisions of this act

apply to taxable years beginning on or after January 1, 2025.

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