SB 269

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AN ACT

RELATING TO TAXATION; ENACTING A SOLAR MARKET DEVELOPMENT

INCOME TAX CREDIT FOR PURCHASE AND INSTALLATION OF

PHOTOVOLTAIC SYSTEMS AND SOLAR THERMAL SYSTEMS; DECLARING AN

EMERGENCY.

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:

"SOLAR MARKET DEVELOPMENT TAX CREDIT--RESIDENTIAL AND

SMALL BUSINESS SOLAR THERMAL AND PHOTOVOLTAIC MARKET

DEVELOPMENT TAX CREDIT.--

A. Except as provided in Subsection B of this

section, a taxpayer who files an individual New Mexico income

tax return for a taxable year beginning on or after January 1,

2006 and who purchases and installs after January 1, 2006 but

before December 31, 2015 a solar thermal system or a

photovoltaic system in a residence, business or agricultural

enterprise in New Mexico owned by that taxpayer may apply

for, and the department may allow, a solar market development

tax credit of up to thirty percent of the purchase and

installation costs of the system; provided that under no

circumstances shall the federal and state tax credits

allowed, when combined, total more than thirty percent of the

purchase and installation cost of the system. To determine

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the amount of the state solar market development tax credit

due pursuant to this section, the amount of the allowable

federal tax credit, whether claimed or not claimed by the

taxpayer, shall be deducted from thirty percent of the

purchase and installation cost of the system. The total solar

market development tax credit allowed for either a

photovoltaic system or a solar thermal system shall not

exceed nine thousand dollars ($9,000). The department shall

allow solar market development tax credits only for solar

thermal systems and photovoltaic systems certified by the

energy, minerals and natural resources department.

B. Solar market development tax credits may not be

claimed or allowed for:

(1) a heating system for a swimming pool or

a hot tub; or

(2) a commercial or industrial photovoltaic

system other than an agricultural photovoltaic system on a

farm or ranch that is not connected to an electric utility

transmission or distribution system.

C. The department may allow a maximum annual

aggregate of:

(1) two million dollars ($2,000,000) in

solar market development tax credits for solar thermal

systems; and

(2) three million dollars ($3,000,000) in

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solar market development tax credits for photovoltaic

systems.

D. A portion of the solar market development tax

credit that remains unused in a taxable year may be carried

forward for a maximum of ten consecutive taxable years

following the taxable year in which the credit originates

until fully expended.

E. Prior to July 1, 2006, the energy, minerals and

natural resources department shall adopt rules establishing

procedures to provide certification of solar thermal systems

and photovoltaic systems for purposes of obtaining a solar

market development tax credit. The rules shall address

technical specifications and requirements relating to safety,

code and standards compliance, solar collector orientation

and sun exposure, minimum system sizes, system applications

and lists of eligible components. The energy, minerals and

natural resources department may modify the specifications

and requirements as necessary to maintain a high level of

system quality and performance.

F. As used in this section:

(1) "photovoltaic system" means an energy

system that collects or absorbs sunlight for conversion into

electricity; and

(2) "solar thermal system" means an energy

system that collects or absorbs solar energy for conversion

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into heat for the purposes of space heating, space cooling or

water heating."

Section 2. APPLICABILITY.--The provisions of this act

apply to taxable years beginning on or after January 1, 2006.

Section 3. EMERGENCY.--It is necessary for the public

peace, health and safety that this act take effect

immediately.