45th legislature - STATE OF NEW MEXICO - first session, 2001

RELATING TO TAXATION; ENACTING A SECTION OF THE CORPORATE INCOME AND FRANCHISE TAX ACT TO PROVIDE A TAX CREDIT FOR CORPORATIONS THAT MAKE CONTRIBUTIONS TO ELIGIBLE COMMUNITY DEVELOPMENT PROJECTS; PROVIDING FOR ADMINISTRATION OF A COMMUNITY CONTRIBUTION TAX CREDIT PROGRAM.

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] COMMUNITY CONTRIBUTION TAX CREDIT-- CERTIFICATION PROGRAM.--

A. To encourage the participation of private corporations in community housing development projects and revitalization projects undertaken by public redevelopment organizations, a taxpayer who files a corporate income tax return and who has been certified by the division as a participating business may claim a credit in an amount not to exceed fifty percent of the value of a community contribution to a community development project not to exceed two hundred thousand dollars ($200,000) in the aggregate for all community contributions to community development projects made in the taxable year for which the return is filed.

B. A taxpayer may claim the tax credit provided in this section for each taxable year in which the taxpayer was certified by the division as a participating business that made a community contribution to a community development project and may only claim the credit in the amount certified by the division, not to exceed the maximum amount allowable in Subsection A of this section. The division shall not certify credits pursuant to this section in any taxable year that exceed ten million dollars ($10,000,000) in the aggregate.

C. The credit provided in this section may only be deducted from the taxpayer's corporate income tax liability for the taxable year. Any portion of the maximum tax credit that remains unused at the end of the taxpayer's taxable year may be carried forward for five consecutive taxable years, provided the total tax credits claimed under this section shall not exceed the maximum allowable under Subsection A of this section.

D. The division shall establish a community contribution tax credit program to take applications for and certify eligible sponsors, community development projects and participating businesses; to approve and determine the value of community contributions made by participating businesses to community development projects; and to certify the tax credits for which participating businesses are eligible for each taxable year. Annually, for each business eligible for a tax credit pursuant to this section, the division shall transmit to the department, by the date and in the manner required by the department, the name of each participating business, the taxpayer identification number, the amount of tax credit certified for each business and such other information as is required by the department. The division shall certify the amounts of community contributions eligible for a credit under this section in the order of receipt of application, and shall certify tax credits until the amount of the credits allowed for the taxable year reaches the maximum amount in Subsection B of this section. Thereafter, no credits shall be certified for that taxable year.

E. As used in this section:

(1) "community contribution" means a grant to a community development project that consists of cash or other liquid assets, real property or goods or other physical resources identified by the division, and is:

(a) used exclusively for the purposes of that project; and

(b) not used for the administrative or operational costs of the eligible sponsor of the project;

(2) "community development project" means any activity undertaken by an eligible sponsor that:

(a) is designed to construct, improve or substantially rehabilitate housing or commercial, industrial or public resources and facilities or to improve entrepreneurial or job development opportunities for low-income persons; and

(b) has been determined by resolution of the local governmental unit in which it is located to be consistent with applicable local plans and regulations;

(3) "division" means the local government division of the department of finance and administration;

(4) "eligible sponsor" means a municipality, a county, a community housing development organization, a regional housing authority or nonprofit corporation created by an authority pursuant to the Regional Housing Law, a community development agency created pursuant to the Community Development Law, a metropolitan redevelopment agency created pursuant to the Metropolitan Redevelopment Code, a local government or its designated management organization administering an enterprise zone pursuant to the Enterprise Zone Act or similar agency or entity designated by rule of the division;

(5) "community housing development organization" means a nonprofit corporation in New Mexico that has been granted an exemption from the federal income tax by the United States commissioner of internal revenue as an organization described in Section 501(c)(3) of the Internal Revenue Code and that is a "community housing development organization" as that term is defined in 42 USCA 12704(6) for purposes of the Cranston-Gonzalez National Affordable Housing Act; and

(6) "participating business" means a corporation that:

(a) has been certified by the division as making or proposing to make a community contribution that has been accepted or is acceptable to a community development project; and

(b) has no financial interest in the eligible sponsor of the community development project to which the business makes the community contribution."

Section 2. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2001.