HOUSE BILL 163

52nd legislature - STATE OF NEW MEXICO - second session, 2016

INTRODUCED BY

Carl Trujillo

AN ACT

RELATING TO TAXATION; CREATING THE HOME ENERGY AND WATER EFFICIENCY INCOME TAX CREDIT.

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] HOME ENERGY AND WATER EFFICIENCY INCOME TAX CREDIT.--

          A. Prior to January 1, 2022, a taxpayer who is not a dependent of another individual; who makes improvements to the energy or indoor water use efficiency of the taxpayer's primary residence, as certified by a qualified assessor approved by the energy, minerals and natural resources department; and who meets the requirements of this section may apply for, and the taxation and revenue department may allow, a one-time credit against the taxpayer's tax liability imposed pursuant to the Income Tax Act. The credit provided by this section may be referred to as the "home energy and water efficiency income tax credit".

          B. The purpose of the home energy and water efficiency income tax credit is to increase the efficiency of energy and indoor water use of existing residences in the state.

          C. A taxpayer who is allowed a home energy and water efficiency income tax credit in a taxable year shall not be allowed a credit pursuant to Section 7-2-18.14 NMSA 1978 in the same taxable year.

          D. The home energy and water efficiency income tax credit may be allowed as follows:

                (1) if the energy efficiency of a taxpayer's primary residence is improved by:

                     (a) fifteen percent up to twenty-five percent, one thousand two hundred dollars ($1,200);

                     (b) twenty-five percent up to thirty-five percent, two thousand five hundred dollars ($2,500); or

                     (c) thirty-five percent or more, four thousand dollars ($4,000); and

                (2) if the efficiency of the indoor water use of a taxpayer's primary residence is improved by:

                     (a) fifteen percent up to twenty-five percent, five hundred dollars ($500);

                     (b) twenty-five percent up to thirty-five percent, seven hundred fifty dollars ($750); or

                     (c) thirty-five percent or more, one thousand dollars ($1,000).

          E. For credits claimed beginning January 1, 2017 through December 31, 2019, the department may allow a maximum annual aggregate of one million dollars ($1,000,000) in home energy and water efficiency income tax credits per calendar year. For credits claimed beginning January 1, 2020 through December 31, 2022, the department may allow a maximum annual aggregate of two million dollars ($2,000,000) in home energy and water efficiency income tax credits per calendar year. Completed applications for the credit shall be considered in the order received by the department. A taxpayer who applies for a credit but is unable to receive the credit because the applications for the year exceed the limitation in this subsection shall be placed at the front of a queue of credit applicants in the subsequent calendar year.

          F. A taxpayer may claim a home energy and water efficiency income tax credit:

                (1) for the taxable year in which the taxpayer makes improvements to increase the energy or indoor water use efficiency in the taxpayer's primary residence; and

                (2) no later than one year following the end of the calendar year in which the improvement was made.

          G. If a portion of a home energy and water efficiency income tax credit exceeds a taxpayer's income tax liability in a taxable year, the excess shall be refunded to the taxpayer.

          H. To be eligible for a home energy and water efficiency income tax credit, a taxpayer shall have made improvements to the taxpayer's primary residence that increase the energy or indoor water use efficiency of the primary residence by at least fifteen percent. To determine if the improvements have increased the primary residence's energy or indoor water use efficiency, the taxpayer shall have an inspection made of the primary residence by a qualified assessor who is approved by the energy, minerals and natural resources department prior to and after the improvements are made to the primary residence. The taxpayer shall be responsible for the costs of the inspection. If the improvements have increased the energy or indoor water use efficiency of the primary residence by at least fifteen percent, the energy, minerals and natural resources department shall provide a certificate to the taxpayer indicating the amount of increase.

          I. To receive a home energy and water efficiency income tax credit, a taxpayer shall apply to the department on forms and in the manner prescribed by the department. The application shall include a certification made pursuant to Subsection H of this section.

          J. The energy, minerals and natural resources department shall adopt rules establishing procedures for certification of the increase in energy and indoor water use efficiency of a primary residence for purposes of obtaining a home energy and water efficiency income tax credit. The rules shall address procedures for measuring the energy efficiency in a taxpayer's primary residence using industry standard software programs before and after improvements are made and procedures for making recommendations on what improvements may be made to maximize energy efficiency before improvements are made to the taxpayer's primary residence.

          K. Married individuals filing separate returns for a taxable year for which they could have filed a joint return may each claim only one-half of the home energy and water efficiency income tax credit that would have been claimed on a joint return.

          L. A taxpayer allowed a credit pursuant to this section shall report the amount of the credit to the department in a manner required by the department.

          M. The department shall compile an annual report on the home energy and water efficiency income tax credit that shall include the number of taxpayers approved by the department to receive the credit, the aggregate amount of credits approved and any other information necessary to evaluate the effectiveness of the credit. The department shall compile and present the annual reports to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the effectiveness and cost of the credit and whether the credit is performing the purpose for which it was created.

          N. As used in this section:

                (1) "improvements" means physical changes made to a taxpayer's home that increase the energy and indoor water use efficiency of a taxpayer's primary residence; and

                (2) "primary residence" means the domicile where a person resides for most of the year, and, if the person is temporarily out of the state, the address where a person will return when the person returns to New Mexico or the address that a person uses for purposes of a driver's license or passport."

     SECTION 2. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2016.

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