SENATE BILL 291
49th legislature - STATE OF NEW MEXICO - first session, 2009
INTRODUCED BY
Dede Feldman
AN ACT
RELATING TO TAXATION; CLARIFYING PROVISIONS OF THE SUSTAINABLE BUILDING TAX CREDITS; ALLOWING NONPROFIT ENTITIES TO RECEIVE THE SUSTAINABLE BUILDING TAX CREDITS THROUGH TRANSFERABILITY; PROVIDING GREATER FLEXIBILITY TO MULTIFAMILY RESIDENTIAL BUILDINGS REGARDING OPPORTUNITIES TO BE QUALIFIED FOR SUSTAINABLE BUILDING TAX CREDITS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 7-2-18.19 NMSA 1978 (being Laws 2007, Chapter 204, Section 3) is amended to read:
"7-2-18.19. SUSTAINABLE BUILDING TAX CREDIT.--
A. The tax credit provided by this section may be referred to as the "sustainable building tax credit". The sustainable building tax credit shall be available for the construction in New Mexico of a sustainable building, [or] the renovation of an existing building in New Mexico into a sustainable building or the permanent installation of manufactured housing, regardless of where the housing is manufactured, that is a sustainable building. The tax credit provided in this section may not be claimed with respect to the same sustainable building for which the sustainable building tax credit provided in the Corporate Income and Franchise Tax Act has been claimed.
B. A taxpayer who files an income tax return is eligible to [apply for] be granted a sustainable building tax credit by the department if the taxpayer [is:
(1) the owner of the building at the time the certification level for the building in the LEED green building rating system or the build green New Mexico rating system is awarded; or
(2) the subsequent purchaser of a sustainable building with respect to which no tax credit has been previously claimed, if the certification level for the building in the LEED green building rating system or the build green New Mexico rating system is awarded on or after January 1, 2007] submits a document issued pursuant to Subsection I of this section with the taxpayer's income tax return.
C. The amount of the sustainable building tax credit that may be claimed with respect to a sustainable commercial building shall be calculated based on the certification level the building has achieved in the LEED green building rating system and the amount of qualified occupied square footage in the building, as indicated on the following chart:
LEED Rating Level Qualified Tax Credit
Occupied per Square
Square Footage Foot
LEED-NC Silver First 10,000 $3.50
Next 40,000 $1.75
Over 50,000
up to 500,000 $ .70
LEED-NC Gold First 10,000 $4.75
Next 40,000 $2.00
Over 50,000
up to 500,000 $1.00
LEED-NC Platinum First 10,000 $6.25
Next 40,000 $3.25
Over 50,000
up to 500,000 $2.00
LEED-EB or CS Silver First 10,000 $2.50
Next 40,000 $1.25
Over 50,000
up to 500,000 $ .50
LEED-EB or CS Gold First 10,000 $3.35
Next 40,000 $1.40
Over 50,000
up to 500,000 $ .70
LEED-EB or CS Platinum First 10,000 $4.40
Next 40,000 $2.30
Over 50,000
up to 500,000 $1.40
LEED-CI Silver First 10,000 $1.40
Next 40,000 $ .70
Over 50,000
up to 500,000 $ .30
LEED-CI Gold First 10,000 $1.90
Next 40,000 $ .80
Over 50,000
up to 500,000 $ .40
LEED-CI Platinum First 10,000 $2.50
Next 40,000 $1.30
Over 50,000
up to 500,000 $ .80.
D. The amount of the sustainable building tax credit that may be claimed with respect to a sustainable residential building shall be calculated based on the certification level the building has achieved in the LEED green building rating system or the build green New Mexico rating system and the amount of qualified occupied square footage, as indicated on the following chart:
Rating System/Level Qualified Tax Credit Occupied per Square
Square Footage Foot
Build Green NM Gold First 2,000 $4.50 Next 1,000 $2.00
LEED-H Silver First 2,000 $5.00
Next 1,000 $2.50
LEED-H Gold First 2,000 $6.85
Next 1,000 $3.40
LEED-H Platinum First 2,000 $9.00
Next 1,000 $4.45
EPA ENERGY STAR
Manufactured Housing Up to 3,000 $3.00.
E. A [taxpayer] building owner may apply for [certification] a certificate of eligibility for the sustainable building tax credit from the energy, minerals and natural resources department after the construction, installation or renovation of the sustainable building is complete. Applications shall be considered in the order received. If the energy, minerals and natural resources department determines that the [taxpayer] building owner meets the requirements [of Subsection B] of this [section] subsection and that the building with respect to which the tax credit application is made meets the requirements of this section as a sustainable residential building or a sustainable commercial building, [it] the energy, minerals and natural resources department may issue a certificate of eligibility to the [taxpayer] building owner, subject to the limitation in Subsection F of this section. The certificate shall include the rating system certification level awarded to the building, the amount of qualified occupied square footage in the building and a calculation of the maximum amount of sustainable building tax credit for which the [taxpayer] building owner would be eligible. The energy, minerals and natural resources department may issue rules governing the procedure for administering the provisions of this subsection. If the certification level for the building in the LEED green building rating system or the build green New Mexico rating system is awarded on or after January 1, 2007, the energy, minerals and natural resources department may issue a certificate of eligibility to a building owner who is:
(1) the owner of the building at the time the certification level for the building in the LEED green building rating system or the build green New Mexico rating system is awarded; or
(2) the subsequent purchaser of a sustainable building with respect to which no tax credit has been previously claimed.
F. The energy, minerals and natural resources department may issue a certificate of eligibility only if the total amount of sustainable building tax credits represented by certificates of eligibility issued by the energy, minerals and natural resources department pursuant to this section and pursuant to the Corporate Income and Franchise Tax Act shall not exceed in any calendar year an aggregate amount of five million dollars ($5,000,000) with respect to sustainable commercial buildings and an aggregate amount of five million dollars ($5,000,000) with respect to sustainable residential buildings; provided that no more than one million two hundred fifty thousand dollars ($1,250,000) of the aggregate amount with respect to sustainable residential buildings shall be for manufactured housing. If in October of any taxable year, the energy, minerals and natural resources department determines that the applications for sustainable building tax credits with respect to sustainable residential buildings for that taxable year exceed the aggregate limit set in this section, the energy, minerals and natural resources department may issue certificates of eligibility as sustainable commercial buildings to building owners of multifamily dwellings that meet the requirements of the energy, minerals and natural resources department and of this section; provided that applications for sustainable building credits for other sustainable commercial buildings total less than the full amount allocated for tax credits for sustainable commercial buildings.
G. Installation of a solar thermal system or a photovoltaic system eligible for the solar market development tax credit pursuant to Section 7-2-18.14 NMSA 1978 may not be used as a component of qualification for the rating system certification level used in determining eligibility for the sustainable building tax credit, unless a solar market development tax credit pursuant to Section 7-2-18.14 NMSA 1978 has not been claimed with respect to that system and the building owner and the taxpayer [certifies] claiming the sustainable building tax credit certify that such a tax credit will not be claimed with respect to that system.
H. To be eligible for the sustainable building tax credit, the [taxpayer must] building owner shall provide to the taxation and revenue department a certificate of eligibility issued by the energy, minerals and natural resources department pursuant to the requirements of Subsection E of this section and any other information the taxation and revenue department may require to determine the amount of the tax credit [due] for which the [taxpayer] building owner is eligible.
I. If the requirements of this section have been complied with, the department shall issue to the [applicant] building owner a document granting a sustainable building tax credit. The document shall be numbered for identification and declare its date of issuance and the amount of the tax credit allowed pursuant to this section. The document may be submitted by the building owner with that taxpayer's income tax return or may be sold, exchanged or otherwise transferred to another taxpayer. 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.
J. Except as provided in Subsection K of this section, the sustainable building tax credit represented by the document issued pursuant to Subsection I of this section shall be applied against the taxpayer's income tax liability for the taxable year in which the credit is approved and the three subsequent taxable years, in increments of twenty-five percent of the total credit amount in each of the four taxable years. If the amount of the credit available in a taxable year exceeds the taxpayer's income tax liability for that taxable year, the excess may be carried forward for up to seven years.
K. If the total amount of a sustainable building tax credit approved by the department is less than twenty- five thousand dollars ($25,000), the entire amount of the credit may be applied against the taxpayer's income tax liability for the taxable year in which the credit is approved. If the amount of the credit exceeds the taxpayer's income tax liability for that taxable year, the excess may be carried forward for up to seven years.
L. A taxpayer who otherwise qualifies and claims a sustainable building tax credit with respect to a sustainable building owned by a partnership or other business association of which the taxpayer is a member may claim a credit only in proportion to that taxpayer's interest in the partnership or association. The total credit claimed in the aggregate by all members of the partnership or association with respect to the sustainable building shall not exceed the amount of the credit that could have been claimed by a sole owner of the property.
M. 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 sustainable building tax credit that would have been allowed on a joint return.
N. For the purposes of this section:
(1) "build green New Mexico rating system" means the certification standards adopted by the homebuilders association of central New Mexico;
(2) "LEED-CI" means the LEED rating system for commercial interiors;
(3) "LEED-CS" means the LEED rating system for the core and shell of buildings;
(4) "LEED-EB" means the LEED rating system for existing buildings;
(5) "LEED gold" means the rating in compliance with, or exceeding, the second-highest rating awarded by the LEED certification process;
(6) "LEED" means the most current leadership in energy and environmental design green building rating system guidelines developed and adopted by the United States green building council;
(7) "LEED-H" means the LEED rating system for homes;
(8) "LEED-NC" means the LEED rating system for new buildings and major renovations;
(9) "LEED platinum" means the rating in compliance with, or exceeding, the highest rating awarded by the LEED certification process;
(10) "LEED silver" means the rating in compliance with, or exceeding, the third-highest rating awarded by the LEED certification process;
(11) "qualified occupied square footage" means the occupied spaces of the building as determined by:
(a) the United States green building council for those buildings obtaining LEED certification;
(b) the administrators of the build green New Mexico rating system for those homes obtaining build green New Mexico certification; and
(c) the United States environmental protection agency for ENERGY STAR-certified manufactured homes;
(12) "multifamily dwelling" means a building that has multiple dwelling units for more than one family unit and may be considered to be either a sustainable residential building or a sustainable commercial building;
(13) "nonprofit organization" means a nonprofit corporation or trust that is exempt from payment of income tax pursuant to Section 7-2-4 NMSA 1978, but does not include state or local government agencies;
[(12)] (14) "sustainable building" means either a sustainable commercial building or a sustainable residential building;
[(13)] (15) "sustainable commercial building" means a building used as multifamily dwelling units, as registered and certified under the LEED-H rating system that is certified by the United States green building council as LEED-H silver or higher or by build green New Mexico as gold or higher and has achieved a home energy rating system index of sixty or lower as developed by the residential energy services network; or a building that has been registered and certified under the LEED-NC, LEED-EB, LEED-CS or LEED-CI rating system and that:
(a) is certified by the United States green building council at LEED silver or higher;
(b) achieves any prerequisite for and at least one point related to commissioning under LEED "energy and atmosphere", if included in the applicable rating system; and
(c) has reduced energy consumption, as follows: 1) through 2011, a fifty percent energy reduction will be required based on the national average for that building type as published by the United States department of energy; and beginning January 1, 2012, a sixty percent energy reduction will be required based on the national average for that building type as published by the United States department of energy; and 2) is substantiated by the United States environmental protection agency target finder energy performance results form, dated no sooner than the schematic design phase of development; and
[(14)] (16) "sustainable residential building" means:
(a) a building used as a single-family residence as registered and certified under the build green New Mexico or LEED-H rating systems that: 1) is certified by the United States green building council as LEED-H silver or higher or by build green New Mexico as gold or higher; and 2) has achieved a home energy rating system index of sixty or lower as developed by the residential energy services network;
(b) a building used as multifamily dwelling units, as registered and certified under the LEED-H rating system that: 1) is certified by the United States green building council as LEED-H silver or higher or by build green New Mexico as gold or higher; and 2) has achieved a home energy rating system index of sixty or lower as developed by the residential energy services network; or
(c) manufactured housing as defined by the United States department of housing and urban development that is ENERGY STAR-qualified by the United States environmental protection agency."
Section 2. Section 7-2A-21 NMSA 1978 (being Laws 2007, Chapter 204, Section 4) is amended to read:
"7-2A-21. SUSTAINABLE BUILDING TAX CREDIT.--
A. The tax credit provided by this section may be referred to as the "sustainable building tax credit". The sustainable building tax credit shall be available for the construction in New Mexico of a sustainable building, [or] the renovation of an existing building in New Mexico into a sustainable building or the permanent installation of manufactured housing, regardless of where the housing is manufactured, that is a sustainable building. The tax credit provided in this section may not be claimed with respect to the same sustainable building for which the sustainable building tax credit provided in the Income Tax Act has been claimed.
B. A taxpayer that files a corporate income tax return is eligible to [apply for] be granted a sustainable building tax credit by the department if the taxpayer [is:
(1) the owner of the building at the time the certification level for the building in the LEED green building rating system or the build green New Mexico rating system is awarded; or
(2) the subsequent purchaser of a sustainable building with respect to which no tax credit has been previously claimed, if the certification level for the building in the LEED green building rating system or the build green New Mexico rating system is awarded on or after January 1, 2007] submits a document issued pursuant to Subsection I of this section with the taxpayer's corporate income tax return.
C. The amount of the sustainable building tax credit that may be claimed with respect to a sustainable commercial building shall be calculated based on the certification level the building has achieved in the LEED green building rating system and the amount of qualified occupied square footage in the building, as indicated on the following chart:
LEED Rating Level Qualified Tax Credit per
Occupied Square Foot
Square Footage LEED-NC Silver First 10,000 $3.50
Next 40,000 $1.75
Over 50,000
up to 500,000 $.70
LEED-NC Gold First 10,000 $4.75 Next 40,000 $2.00
Over 50,000
up to 500,000 $1.00
LEED-NC Platinum First 10,000 $6.25
Next 40,000 $3.25
Over 50,000
up to 500,000 $2.00
LEED-EB or CS Silver First 10,000 $2.50
Next 40,000 $1.25
Over 50,000
up to 500,000 $ .50
LEED-EB or CS Gold First 10,000 $3.35
Next 40,000 $1.40
Over 50,000
up to 500,000 $ .70
LEED-EB or CS
Platinum First 10,000 $4.40
Next 40,000 $2.30
Over 50,000
up to 500,000 $1.40
LEED-CI Silver First 10,000 $1.40
Next 40,000 $ .70
Over 50,000
up to 500,000 $ .30
LEED-CI Gold First 10,000 $1.90
Next 40,000 $ .80
Over 50,000
up to 500,000 $ .40
LEED-CI Platinum First 10,000 $2.50
Next 40,000 $1.30
Over 50,000
up to 500,000 $ .80.
D. The amount of the sustainable building tax credit that may be claimed with respect to a sustainable residential building shall be calculated based on the certification level the building has achieved in the LEED green building rating system or the build green New Mexico rating system and the amount of qualified occupied square footage, as indicated on the following chart:
Rating System/Level Qualified Tax Credit
Occupied per Square
Square Footage Foot
Build Green NM Gold First 2,000 $4.50
Next 1,000 $2.00
LEED-H Silver First 2,000 $5.00
Next 1,000 $2.50
LEED-H Gold First 2,000 $6.85
Next 1,000 $3.40
LEED-H Platinum First 2,000 $9.00
Next 1,000 $4.45
EPA ENERGY STAR
Manufactured Housing Up to 3,000 $3.00.
E. A [taxpayer] building owner may apply for [certification] a certificate of eligibility for the sustainable building tax credit from the energy, minerals and natural resources department after the construction, installation or renovation of the sustainable building is complete. Applications shall be considered in the order received. If the energy, minerals and natural resources department determines that the [taxpayer] building owner meets the requirements of [Subsection B of] this [section] subsection and that the building with respect to which the tax credit application is made meets the requirements of this section as a sustainable residential building or a sustainable commercial building, [it] the energy, minerals and natural resources department may issue a certificate of eligibility to the [taxpayer] building owner, subject to the limitation in Subsection F of this section. The certificate shall include the rating system certification level awarded to the building, the amount of qualified occupied square footage in the building and a calculation of the maximum amount of sustainable building tax credit for which the [taxpayer] building owner would be eligible. The energy, minerals and natural resources department may issue rules governing the procedure for administering the provisions of this subsection. If the certification level for the building in the LEED green building rating system or the build green New Mexico rating system is awarded on or after January 1, 2007, the energy, minerals and natural resources department may issue a certificate of eligibility to a building owner who is:
(1) the owner of the building at the time the certification level for the building in the LEED green building rating system or the build green New Mexico rating system is awarded; or
(2) the subsequent purchaser of a sustainable building with respect to which no tax credit has been previously claimed.
F. The energy, minerals and natural resources department may issue a certificate of eligibility only if the total amount of sustainable building tax credits represented by certificates of eligibility issued by the energy, minerals and natural resources department pursuant to this section and pursuant to the Income Tax Act shall not exceed in any calendar year an aggregate amount of five million dollars ($5,000,000) with respect to sustainable commercial buildings and an aggregate amount of five million dollars ($5,000,000) with respect to sustainable residential buildings; provided that no more than one million two hundred fifty thousand dollars ($1,250,000) of the aggregate amount with respect to sustainable residential buildings shall be for manufactured housing. If in October of any taxable year, the energy, minerals and natural resources department determines that the applications for sustainable building tax credits with respect to sustainable residential buildings for that taxable year exceed the aggregate limit set in this section, the energy, minerals and natural resources department may issue certificates of eligibility as sustainable commercial buildings to building owners of multifamily dwellings that meet the requirements of the energy, minerals and natural resources department and of this section; provided that applications for sustainable building credits for other sustainable commercial buildings total less than the full amount allocated for tax credits for sustainable commercial buildings.
G. Installation of a solar thermal system or a photovoltaic system eligible for the solar market development tax credit pursuant to Section 7-2-18.14 NMSA 1978 may not be used as a component of qualification for the rating system certification level used in determining eligibility for the sustainable building tax credit, unless a solar market development tax credit pursuant to Section 7-2-18.14 NMSA 1978 has not been claimed with respect to that system and the building owner and the taxpayer [certifies] claiming the sustainable building tax credit certify that such a tax credit will not be claimed with respect to that system.
H. To be eligible for the sustainable building tax credit, the [taxpayer must] building owner shall provide to the taxation and revenue department a certificate of eligibility issued by the energy, minerals and natural resources department pursuant to the requirements of Subsection E of this section and any other information the taxation and revenue department may require to determine the amount of the tax credit [due] for which the [taxpayer] building owner is eligible.
I. If the requirements of this section have been complied with, the department shall issue to the [applicant] building owner a document granting a sustainable building tax credit. The document shall be numbered for identification and declare its date of issuance and the amount of the tax credit allowed pursuant to this section. The document may be submitted by the building owner with that taxpayer's income tax return or may be sold, exchanged or otherwise transferred to another taxpayer. 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.
J. Except as provided in Subsection K of this section, the sustainable building tax credit represented by the document issued pursuant to Subsection I of this section shall be applied against the taxpayer's corporate income tax liability for the taxable year in which the credit is approved and the three subsequent taxable years, in increments of twenty-five percent of the total credit amount in each of the four taxable years. If the amount of the credit available in a taxable year exceeds the taxpayer's corporate income tax liability for that taxable year, the excess may be carried forward for up to seven years.
K. If the total amount of a sustainable building tax credit approved by the department is less than twenty-five thousand dollars ($25,000), the entire amount of the credit may be applied against the taxpayer's corporate income tax liability for the taxable year in which the credit is approved. If the amount of the credit exceeds the taxpayer's corporate income tax liability for that taxable year, the excess may be carried forward for up to seven years.
L. A taxpayer that otherwise qualifies and claims a sustainable building tax credit with respect to a sustainable building owned by a partnership or other business association of which the taxpayer is a member may claim a credit only in proportion to that taxpayer's interest in the partnership or association. The total credit claimed in the aggregate by all members of the partnership or association with respect to the sustainable building shall not exceed the amount of the credit that could have been claimed by a sole owner of the property.
M. For the purposes of this section:
(1) "build green New Mexico rating system" means the certification standards adopted by the homebuilders association of central New Mexico;
(2) "LEED-CI" means the LEED rating system for commercial interiors;
(3) "LEED-CS" means the LEED rating system for the core and shell of buildings;
(4) "LEED-EB" means the LEED rating system for existing buildings;
(5) "LEED gold" means the rating in compliance with, or exceeding, the second-highest rating awarded by the LEED certification process;
(6) "LEED" means the most current leadership in energy and environmental design green building rating system guidelines developed and adopted by the United States green building council;
(7) "LEED-H" means the LEED rating system for homes;
(8) "LEED-NC" means the LEED rating system for new buildings and major renovations;
(9) "LEED platinum" means the rating in compliance with, or exceeding, the highest rating awarded by the LEED certification process;
(10) "LEED silver" means the rating in compliance with, or exceeding, the third-highest rating awarded by the LEED certification process;
(11) "qualified occupied square footage" means the occupied spaces of the building as determined by:
(a) the United States green building council for those buildings obtaining LEED certification; (b) the administrators of the build green New Mexico rating system for those homes obtaining build green New Mexico certification; and
(c) the United States environmental protection agency for ENERGY STAR-certified manufactured homes;
(12) "multifamily dwelling" means a building that has multiple dwelling units for more than one family unit and may be considered to be either a sustainable residential building or a sustainable commercial building;
(13) "nonprofit organization" means a nonprofit corporation, trust or insurance company that is exempt from payment of income tax pursuant to Section 7-2A-4 NMSA 1978 or a public school or public school district, but does not include state or local government agencies;
[(12)] (14) "sustainable building" means either a sustainable commercial building or a sustainable residential building;
[(13)] (15) "sustainable commercial building" means a building used as multifamily dwelling units, as registered and certified under the LEED-H rating system that is certified by the United States green building council as LEED-H silver or higher or by build green New Mexico as gold or higher and has achieved a home energy rating system index of sixty or lower as developed by the residential energy services network; or a building that has been registered and certified under the LEED-NC, LEED-EB, LEED-CS or LEED-CI rating system and that:
(a) is certified by the United States green building council at LEED silver or higher;
(b) achieves any prerequisite for and at least one point related to commissioning under LEED "energy and atmosphere", if included in the applicable rating system; and
(c) has reduced energy consumption, as follows: 1) through 2011, a fifty percent energy reduction will be required based on the national average for that building type as published by the United States department of energy; and beginning January 1, 2012, a sixty percent energy reduction will be required based on the national average for that building type as published by the United States department of energy; and 2) is substantiated by the United States environmental protection agency target finder energy performance results form, dated no sooner than the schematic design phase of development; and
[(14)] (16) "sustainable residential building" means:
(a) a building used as a single-family residence as registered and certified under the build green New Mexico or LEED-H rating systems that: 1) is certified by the United States green building council as LEED-H silver or higher or by build green New Mexico as gold or higher; and 2) has achieved a home energy rating system index of sixty or lower as developed by the residential energy services network;
(b) a building used as multifamily dwelling units, as registered and certified under the LEED-H rating system that: 1) is certified by the United States green building council as LEED-H silver or higher or by build green New Mexico as gold or higher; and 2) has achieved a home energy rating system index of sixty or lower as developed by the residential energy services network; or
(c) manufactured housing as defined by the United States department of housing and urban development that is ENERGY STAR-qualified by the United States environmental protection agency."
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