2004 House Bill text for HB0326

HOUSE BILL 326

46th legislature - STATE OF NEW MEXICO - second session, 2004

INTRODUCED BY

Joe M. Stell

AN ACT

RELATING TO TAXATION; PROVIDING FOR A TAX CREDIT FOR WATER RIGHTS DONATED TO THE STRATEGIC WATER RESERVE.

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] TAX CREDIT--DONATION OF WATER RIGHTS TO THE STRATEGIC WATER RESERVE.--

A. A person who files an individual New Mexico income tax return who is not a dependent of another taxpayer may take a tax credit in an amount equal to one thousand dollars ($1,000) per acre-foot of water rights donated during the taxable year to the strategic water reserve administered by the interstate stream commission pursuant to Section 72-14-3 NMSA 1978, but not to exceed one hundred thousand dollars ($100,000) per year.

B. A taxpayer may apply for certification of eligibility for the tax credit provided in this section from the interstate stream commission, which shall determine the sufficiency of the applicant's water rights to meet the criteria of the strategic water reserve. The interstate stream commission shall issue a certification of eligibility to the applicant containing this information.

C. To claim the credit provided in this section, a taxpayer shall submit to the department a certification of eligibility issued by the interstate stream commission pursuant to Subsection B of this section, along with any other information the department may require to determine the amount of the tax credit due the taxpayer.

D. A husband and wife who file separate returns for a taxable year in which they could have filed a joint return may each claim only one-half of the credit that would have been allowed on a joint return.

E. The tax credit provided in this section may only be deducted from the taxpayer's income tax liability for the taxable year. Any portion of the tax credit provided in this section that remains unused at the end of the taxpayer's taxable year may be carried forward for three consecutive taxable years.

F. As used in this section, "water right" means:

(1) a title to use water as decreed by a state district court pursuant to a water rights adjudication; or

(2) a water right recognized by the state engineer as having sufficient seniority and consistent historic beneficial use to effectively contribute to the purpose of the strategic water reserve."

Section 2. A new section of the Corporate Income and Franchise Tax Act is enacted to read:

"[NEW MATERIAL] TAX CREDIT--DONATION OF WATER RIGHTS TO THE STRATEGIC WATER RESERVE.--

A. A taxpayer that files a New Mexico corporate income tax return may take a tax credit in an amount equal to one thousand dollars ($1,000) per acre-foot of water rights donated during the taxable year to the strategic water reserve administered by the interstate stream commission pursuant to Section 72-14-3 NMSA 1978, and not to exceed one hundred thousand dollars ($100,000) per year.

D. The tax credit provided in this section may be deducted from the taxpayer's corporate income tax liability for the taxable year. Any portion of the tax credit provided in this section that remains unused at the end of the taxpayer's taxable year may be carried forward for three consecutive taxable years.

E. As used in this section, "water right" means:

(1) a title to use water as decreed by a state district court pursuant to a water rights adjudication; or

(2) a water right recognized by the state engineer as having sufficient seniority and consistent historic beneficial use to effectively contribute to the purpose of the strategic water reserve."

Section 3. CONTINGENCY.--The provisions of Sections 1 and 2 of this act are effective contingent upon enactment into law of legislation that creates a strategic water reserve administered by the interstate stream commission.

- 4 -