HB0252CT1

FIFTY-SIXTH LEGISLATURE

SECOND SESSION, 2024 HB252/a

February 11, 2024

Mr. President:

Your TAX, BUSINESS AND TRANSPORTATION COMMITTEE, to whom has been referred

HOUSE TAXATION & REVENUE COMMITTEE SUBSTITUTE

FOR HOUSE BILL 252

has had it under consideration and reports same with recommendation that it DO PASS, amended as follows:

1. On page 1, line 24, strike "REQUIRING", strike line 25, on page 2, line 1, strike "FACTOR;" and strike lines 9 and 10 and insert in lieu thereof:

"INCREASING THE AMOUNT OF THE SPECIAL NEEDS ADOPTED CHILD TAX CREDIT; PROVIDING AN INCOME TAX DEDUCTION FOR SCHOOL SUPPLIES PURCHASED BY A PUBLIC SCHOOL TEACHER; EXTENDING THE GEOTHERMAL GROUND-COUPLED HEAT PUMP TAX CREDITS PURSUANT TO THE INCOME TAX ACT AND THE CORPORATE INCOME AND FRANCHISE TAX ACT, INCREASING THE ANNUAL AGGREGATE CAP FOR EACH CREDIT, MAKING THE CREDIT REFUNDABLE AND AMENDING THE DEFINITION OF "GEOTHERMAL GROUND-COUPLED HEAT PUMP"; CREATING THE CLEAN CAR INCOME TAX CREDIT, THE CLEAN CAR CHARGING UNIT INCOME TAX CREDIT, THE CLEAN CAR CORPORATE INCOME TAX CREDIT AND THE CLEAN CAR CHARGING UNIT CORPORATE INCOME TAX CREDIT; REMOVING A SUNSET DATE TO ALLOW A TAXPAYER ENGAGED IN CERTAIN ELECTRICITY GENERATION TO APPORTION BUSINESS INCOME BY THE SINGLE SALES FACTOR PERMANENTLY; REQUIRING CERTAIN RECEIPTS FOR SERVICES PROVIDED BY A HEALTH CARE PRACTITIONER THAT ARE DEDUCTIBLE FROM GROSS RECEIPTS TO BE WITHIN THE SCOPE OF PRACTICE OF THE PRACTITIONER AND DEFINING "COPAYMENT" IN THE DEDUCTION; CREATING A GROSS RECEIPTS TAX CREDIT FOR LEGAL SERVICES FOR WILDFIRE COMPENSATION RECOVERY; CREATING A GROSS RECEIPTS TAX CREDIT FOR DYED DIESEL USED FOR AGRICULTURAL PURPOSES; PROVIDING AN OIL AND GAS SEVERANCE TAX EXEMPTION FOR THE SEVERANCE OF OIL AND NATURAL GAS FROM A PRODUCTION COMPLIANCE PROJECT COMPLETED TO COMPLY WITH CERTAIN AGENCY RULES; REMOVING THE SUNSET DATE OF AN INCOME TAX EXEMPTION FOR ARMED FORCES RETIREMENT PAY AND EXTENDING THE EXEMPTION TO THE SURVIVING SPOUSE OF AN ARMED FORCES RETIREE; CREATING THE GEOTHERMAL ELECTRICITY GENERATION INCOME TAX CREDIT AND THE GEOTHERMAL ELECTRICITY GENERATION CORPORATE INCOME TAX CREDIT; CREATING THE ADVANCED ENERGY EQUIPMENT INCOME TAX CREDIT AND THE ADVANCED ENERGY EQUIPMENT CORPORATE INCOME TAX CREDIT; RESTORING CERTAIN INCOME IN THE AMOUNT OF INCOME USED TO DETERMINE CORPORATE INCOME TAX LIABILITY, CLARIFYING AN AMOUNT OF CERTAIN INTANGIBLE INCOME USED TO DETERMINE THAT LIABILITY AND INCLUDING CORPORATIONS THAT HAVE TWENTY PERCENT OR MORE OF THEIR PROPERTY, PAYROLL AND SALES SOURCED TO LOCATIONS WITHIN THE UNITED STATES OR ITS POSSESSIONS OR TERRITORIES IN A WATER'S EDGE GROUP; AMENDING OWNERSHIP ELIGIBILITY REQUIREMENTS FOR THE NEW SOLAR MARKET DEVELOPMENT INCOME TAX CREDIT AND INCREASING THE ANNUAL AGGREGATE AMOUNT OF CREDITS THAT MAY BE CERTIFIED IN CERTAIN CALENDAR YEARS; CREATING GROSS RECEIPTS TAX AND COMPENSATING TAX DEDUCTIONS FOR GEOTHERMAL ELECTRICITY GENERATION FACILITY CONSTRUCTION COSTS; PROVIDING DELAYED REPEALS.".

2. On page 31, lines 17 and 18, strike "site-built", on line 22, strike "site-built", on page 32, line 10, strike "site-built", on line 25, strike "site-built", on page 33, line 2, after "builder", insert "or manufacturer", on line 4, after "builder", strike the remainder of the line and on line 5, strike "site-built" and insert in lieu thereof "or manufacturer of the home that the construction of the".

3. On page 35, line 3, strike the semicolon and insert in lieu thereof:

"and is:

(a) constructed permanently on a taxpayer's property with a foundation and that cannot be moved; or

(b) a manufactured home or modular home that is a single-family dwelling with a heated area of at least thirty-six by twenty-four feet and at least eight hundred sixty-four square feet and constructed in a factory to the standards of the United States department of housing and urban development, the National Manufactured Housing Construction and Safety Standards Act of 1974 and the Housing and Urban Development Zone Code 2 or the Uniform Building Code, as amended to the date of the unit's construction, and installed consistent with the Manufactured Housing Act and with the rules made pursuant thereto relating to permanent foundations; and".

4. On page 35, line 4, strike "site-built", on line 5, strike "of a site-built" and insert in lieu thereof "or manufacture of a", on line 8, after "construction", insert ", manufacture", on line 10, strike "; and", strike lines 11 through 13 and strike line 14 up to the period and insert in lieu thereof "or from insurance or other source of compensation".

5. On pages 35 through 40, strike Sections 11 and 12.

6. On page 42, line 14, strike "modification services" and insert in lieu thereof "modifications".

7. On page 45, strike Sections 16 through 18 and insert in lieu thereof:

"SECTION 14. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:

"[NEW MATERIAL] CREDIT--GROSS RECEIPTS TAX--LEGAL SERVICES FOR WILDFIRE COMPENSATION RECOVERY.--

A. A taxpayer who sells legal services to and at the request of a person eligible to receive compensation pursuant to the federal Hermit's Peak/Calf Canyon Fire Assistance Act may claim a tax credit against gross receipts taxes due in an amount equal to the amount of gross receipts tax due on the receipt for the sale; provided that:

(1) the legal services are directly related to recovering the compensation;

(2) the taxpayer did not pass the amount of gross receipts tax on to the person eligible to receive the federal compensation; and

(3) the legal services were sold to a person who states in writing in a manner that the department may require that the person is eligible to receive the federal compensation, the services were directly related to recovering the compensation and the gross receipts tax was not passed on to the person.

B. A taxpayer may claim the tax credit for the taxable period in which the legal services are provided. To receive the credit, the taxpayer shall apply to the department on forms and in a manner prescribed by the department. The maximum aggregate amount of tax credits that may be allowed in a fiscal year is five million dollars ($5,000,000). Completed applications shall be considered in the order received. Applications received after the aggregate amount has been met shall not be approved.

C. That portion of the tax credit claimed by a taxpayer that exceeds the taxpayer's gross receipts tax liability in the taxable period in which the credit is claimed shall not be refunded to the taxpayer but may be carried forward for thirty-six consecutive taxable periods.

D. As used in this section, "legal services" means services performed by a licensed attorney for a client, regardless of the attorney's form of business entity or whether the services are prepaid, including legal representation before courts or administrative agencies; drafting legal documents, such as contracts or patent applications; legal research; advising and counseling; arbitration; mediation; and notary public and other ancillary legal services performed for a client in conjunction with a licensed attorney. "Legal services" does not include lobbying or government relations services, title insurance agent services, licensing or selling legal software or legal document templates, insurance investigation services or any legal representation involving financial crimes or tax evasion in New Mexico."

SECTION 15. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:

"[NEW MATERIAL] CREDIT--GROSS RECEIPTS TAX--SALE OF DYED SPECIAL FUEL USED FOR AGRICULTURAL PURPOSES.--

A. Prior to July 1, 2029, a taxpayer who sells special fuel dyed in accordance with federal regulations may claim a tax credit against gross receipts taxes due in an amount equal to the amount of any gross receipts tax due on the receipt for sale; provided that:

(1) the taxpayer did not pass the amount of gross receipts tax on to the person purchasing the special fuel; and

(2) the special fuel is sold to a person who states in writing in a manner that the department may require that the person will use the special fuel primarily for agricultural purposes and the gross receipts tax was not passed on to the person.

B. A taxpayer may claim the tax credit for the taxable period in which the special fuel is sold. To receive the credit, the taxpayer shall apply to the department on forms and in a manner prescribed by the department. The maximum aggregate amount of tax credits that may be allowed in a fiscal year is ten million dollars ($10,000,000). Completed applications shall be considered in the order received. Applications received after the aggregate amount has been met shall not be approved.

SECTION 16. Section 7-29-4 NMSA 1978 (being Laws 1980, Chapter 62, Section 5, as amended) is amended to read:

"7-29-4. OIL AND GAS SEVERANCE TAX IMPOSED--COLLECTION--INTEREST OWNER'S LIABILITY TO STATE--INDIAN LIABILITY--EXCLUSIONS.--

A. There is imposed and shall be collected by the department a tax on all products that are severed and sold, except as provided in Subsection B of this section. The measure of the tax and the rates are:

(1) on natural gas severed and sold, except as provided in Paragraphs (4), (6) and (7) of this subsection, three and three-fourths percent of the taxable value determined pursuant to Section 7-29-4.1 NMSA 1978;

(2) on oil and on other liquid hydrocarbons removed from natural gas at or near the wellhead, except as provided in Paragraphs (3), (5), (8) and (9) of this subsection, three and three-fourths percent of taxable value determined pursuant to Section 7-29-4.1 NMSA 1978;

(3) on oil and on other liquid hydrocarbons removed from natural gas at or near the wellhead produced from a qualified enhanced recovery project, one and seven-eighths percent of the taxable value determined pursuant to Section 7-29-4.1 NMSA 1978, provided that the annual average price of west Texas intermediate crude oil, determined by the department by averaging the posted prices in effect on the last day of each month of the twelve-month period ending on May 31 prior to the fiscal year in which the tax rate is to be imposed, was less than twenty-eight dollars ($28.00) per barrel;

(4) on the natural gas from a well workover project that is certified by the oil conservation division of the energy, minerals and natural resources department in its approval of the well workover project, two and forty-five hundredths percent of the taxable value determined pursuant to Section 7-29-4.1 NMSA 1978, provided that the annual average price of west Texas intermediate crude oil, determined by the department by averaging the posted prices in effect on the last day of each month of the twelve-month period ending on May 31 prior to the fiscal year in which the tax rate is to be imposed, was less than twenty-four dollars ($24.00) per barrel;

(5) on the oil and on other liquid hydrocarbons removed from natural gas at or near the wellhead from a well workover project that is certified by the oil conservation division of the energy, minerals and natural resources department in its approval of the well workover project, two and forty-five hundredths percent of the taxable value determined pursuant to Section 7-29-4.1 NMSA 1978, provided that the annual average price of west Texas intermediate crude oil, determined by the department by averaging the posted prices in effect on the last day of each month of the twelve-month period ending on May 31 prior to the fiscal year in which the tax rate is to be imposed, was less than twenty-four dollars ($24.00) per barrel;

(6) on the natural gas from a stripper well property, one and seven-eighths percent of the taxable value determined pursuant to Section 7-29-4.1 NMSA 1978, provided the average annual taxable value of natural gas was equal to or less than one dollar fifteen cents ($1.15) per thousand cubic feet in the calendar year preceding July 1 of the fiscal year in which the tax rate is to be imposed;

(7) on the natural gas from a stripper well property, two and thirteen-sixteenths percent of the taxable value determined pursuant to Section 7-29-4.1 NMSA 1978, provided that the average annual taxable value of natural gas was greater than one dollar fifteen cents ($1.15) per thousand cubic feet but not more than one dollar thirty-five cents ($1.35) per thousand cubic feet in the calendar year preceding July 1 of the fiscal year in which the tax rate is to be imposed;

(8) on the oil and on other liquid hydrocarbons removed from natural gas at or near the wellhead from a stripper well property, one and seven-eighths percent of the taxable value determined pursuant to Section 7-29-4.1 NMSA 1978, provided that the average annual taxable value of oil was equal to or less than fifteen dollars ($15.00) per barrel in the calendar year preceding July 1 of the fiscal year in which the tax rate is to be imposed;

(9) on the oil and on other liquid hydrocarbons removed from natural gas at or near the wellhead from a stripper well property, two and thirteen-sixteenths percent of the taxable value determined pursuant to Section 7-29-4.1 NMSA 1978, provided that the average annual taxable value of oil was greater than fifteen dollars ($15.00) per barrel but not more than eighteen dollars ($18.00) per barrel in the calendar year preceding July 1 of the fiscal year in which the tax rate is to be imposed; and

(10) on carbon dioxide, helium and non-hydrocarbon gases, three and three-fourths percent of the taxable value determined pursuant to Section 7-29-4.1 NMSA 1978.

B. The tax imposed in Subsection A of this section shall not be imposed on:

(1) natural gas severed and sold from a production restoration project during the first ten years of production following the restoration of production, provided that the annual average price of west Texas intermediate crude oil, determined by the department by averaging the posted prices in effect on the last day of each month of the twelve-month period ending on May 31 prior to each fiscal year in which the tax exemption is to be effective, was less than twenty-four dollars ($24.00) per barrel;

(2) beginning July 1, 2024, natural gas severed from a stripper well property and sold from a production compliance project during the first ten years of production following the completion of the project or until the date the total amount of tax that would have been imposed but for this subsection equals the cost of the production compliance project, whichever occurs first;

(3) beginning July 1, 2024, oil and other liquid hydrocarbons removed from natural gas at or near the wellhead from a stripper well property production compliance project during the first ten years of production following the completion of the project or until the date the total amount of tax that would have been imposed but for this subsection equals the cost of the production compliance project, whichever occurs first; and

[(2)] (4) oil and other liquid hydrocarbons removed from natural gas at or near the wellhead from a production restoration project during the first ten years of production following the restoration of production, provided that the annual average price of west Texas intermediate crude oil, determined by the department by averaging the posted prices in effect on the last day of each month of the twelve-month period ending on May 31 prior to each fiscal year in which the tax exemption is to be effective, was less than twenty-four dollars ($24.00) per barrel.

C. Every interest owner shall be liable for the tax to the extent of [his] the interest owner's interest in such products. Any Indian tribe, Indian pueblo or Indian shall be liable for the tax to the extent authorized or permitted by law.

D. The tax imposed by this section may be referred to as the "oil and gas severance tax".

E. As used in this section, "production compliance project" means a procedure undertaken by the operator of a natural gas or crude oil well that, in order to continue production from the well, is required by rules promulgated on or after May 25, 2021 by the oil conservation commission to reduce the venting and flaring of natural gas from wells and production equipment and facilities and of natural gas from natural gas gathering systems or by the environmental improvement board to reduce ambient ozone concentrations."

SECTION 17. Section 7-29B-1 NMSA 1978 (being Laws 1995, Chapter 15, Section 1) is amended to read:

"7-29B-1. SHORT TITLE.--[Sections 1 through 6 of this act] Chapter 7, Article 29B NMSA 1978 may be cited as the "Natural Gas and Crude Oil Production Incentive Act"."

SECTION 18. Section 7-29B-2 NMSA 1978 (being Laws 1995, Chapter 15, Section 2, as amended by Laws 1999, Chapter 7, Section 2 and as further amended by Laws 1999, Chapter 256, Section 3) is amended to read:

"7-29B-2. DEFINITIONS.--As used in the Natural Gas and Crude Oil Production Incentive Act:

A. "average annual taxable value" means the average of the taxable value per barrel, determined pursuant to Section 7-31-5 NMSA 1978, of all oil produced in New Mexico for the specified calendar year as determined by the department;

B. "average daily production" means, for any crude oil or natural gas property assigned a single production number by the department, the number derived by dividing the total volume of crude oil or natural gas production from the property reported to the division during a calendar year by the sum of the number of days each eligible well within the property produced or injected during that calendar year;

C. "department" means the taxation and revenue department;

D. "division" means the oil conservation division of the energy, minerals and natural resources department;

E. "eligible well" means a crude oil or natural gas well that produces or an injection well that injects and is integral to production for any period of time during the preceding calendar year;

F. "natural gas" means any combustible vapor composed chiefly of hydrocarbons occurring naturally;

G. "operator" means the person responsible for the actual physical operation of a natural gas or oil well;

H. "person" means any individual or other legal entity, including any group or combination of individuals or other legal entities acting as a unit;

I. "production compliance project" means a procedure undertaken by the operator of a natural gas or crude oil well that, in order to continue production from the well, is required by rules promulgated on or after May 25, 2021 by the oil conservation commission to reduce the venting and flaring of natural gas from wells and production equipment and facilities and of natural gas from natural gas gathering systems or by the environmental improvement board to reduce ambient ozone concentrations;

[I.] J. "production restoration incentive tax exemption" means the tax exemption set forth in Subsection B of Section 7-29-4 NMSA 1978 for natural gas or oil produced from a production restoration project;

[J.] K. "production restoration project" means the use of any process for returning to production a natural gas or oil well that had thirty days or less of production in any period of twenty-four consecutive months beginning on or after January 1, 1993 as approved and certified by the division;

[K.] L. "severance" means the taking from the soil of any product in any manner whatsoever;

[L.] M. "stripper well property" means a crude oil or natural gas producing property that is assigned a single production unit number by the department and:

(1) if a crude oil producing property, produced an average daily production of less than ten barrels of oil per eligible well per day for the preceding calendar year;

(2) if a natural gas producing property, produced an average daily production of less than sixty thousand cubic feet of natural gas per eligible well per day during the preceding calendar year; or

(3) if a property with wells that produce both crude oil and natural gas, produced an average daily production of less than ten barrels of oil per eligible well per day for the preceding calendar year, as determined by converting the volume of natural gas produced by the well to barrels of oil by using a ratio of six thousand cubic feet to one barrel of oil;

[M.] N. "stripper well incentive tax rates" means the tax rates set forth in Paragraphs (6) through (9) of Subsection A of Section 7-29-4 NMSA 1978 and in Paragraphs (4) through (7) of Subsection A of Section 7-31-4 NMSA 1978 for natural gas or oil produced from a well within a stripper well property;

[N.] O. "well workover incentive tax rate" means the tax rate set forth in Paragraphs (4) and (5) of Subsection A of Section 7-29-4 NMSA 1978 on the natural gas or oil produced from a well workover project; and

[O.] P. "well workover project" means any procedure undertaken by the operator of a natural gas or oil well that is intended to increase the production from the well and that has been approved and certified by the division."

SECTION 19. Section 7-29B-3 NMSA 1978 (being Laws 1995, Chapter 15, Section 3, as amended by Laws 1999, Chapter 7, Section 3 and as further amended by Laws 1999, Chapter 256, Section 4) is amended to read:

"7-29B-3. APPROVAL OF PRODUCTION RESTORATION PROJECTS, PRODUCTION COMPLIANCE PROJECTS, WELL WORKOVER PROJECTS AND STRIPPER WELL PROPERTIES.--

A. A natural gas or oil well shall be approved by the division as a production restoration project if:

(1) the operator of the well makes application to the division in accordance with the provisions of the Natural Gas and Crude Oil Production Incentive Act and rules adopted pursuant to that act for approval of a production restoration project and the application is made within twelve months of the completion of the production restoration project; and

(2) the division records show that the well had thirty days or less of production in any period of twenty-four consecutive months beginning on or after January 1, 1993.

B. A natural gas or crude oil well shall be approved by the division as a production compliance project if:

(1) the operator of the well makes an application to the division in accordance with the provisions of the Natural Gas and Crude Oil Production Incentive Act and rules adopted pursuant to that act for approval of a production compliance project and the application is made within twelve months of the completion of the production compliance project;

(2) in order to continue production, the production compliance project was required by rules promulgated on or after May 25, 2021 by the oil conservation commission to reduce the venting and flaring of natural gas from wells and production equipment and facilities and of natural gas from natural gas gathering systems or by the environmental improvement board to reduce ambient ozone concentrations;

(3) the well is approved and certified by the division as a stripper well property;

(4) the operator of the well has total production in New Mexico of not more than one thousand barrels of oil equivalent per day; and

(5) the production compliance project was implemented to install, upgrade or replace the following well equipment, as approved by the division:

(a) tank controls;

(b) pneumatic devices;

(d) vapor recovery units;

(e) forward-looking infrared cameras; and

(f) smokeless combustion chambers.

[B.] C. A natural gas or oil well shall be approved by the division as a well workover project if:

(2) the division determines that the procedure performed by the operator of the well is a procedure to increase the production from the well, but is not routine maintenance performed by a prudent operator to maintain the well in operation. Such procedures may include, but are not limited to:

(a) re-entry into the well to drill deeper, to sidetrack to a different location or to recomplete for production;

(b) recompletion by reperforation of a zone from which natural gas or oil has been produced or by perforation of a different zone;

(d) fracturing, acidizing or installing compression equipment; or

(e) squeezing, cementing or installing equipment necessary for removal of excessive water, brine or condensate from the well bore in order to establish, continue or increase production from the well; and

(3) the operator of the well submits to the division evidence of a positive production increase over the production rate of the well prior to the workover. The operator must submit a production curve or tabulation made up of at least twelve months' production prior to the workover and at least three months' production following the workover that reflects a positive production increase from the workover. The production curve or tabulation must be certified by the operator as that of the well on which a workover was performed.

[C.] D. A natural gas or crude oil producing property shall be approved and certified by the division as a stripper well property if the division records show that the property is assigned a single production unit number by the department and:

(1) if a crude oil producing property, produced an average daily production of less than ten barrels of oil per eligible well per day for the preceding calendar year;

(2) if a natural gas producing property, produced an average daily production of less than sixty thousand cubic feet of natural gas per eligible well per day during the preceding calendar year; or

SECTION 20. Section 7-29B-4 NMSA 1978 (being Laws 1995, Chapter 15, Section 4, as amended) is amended to read:

"7-29B-4. APPLICATION PROCEDURES--CERTIFICATION OF APPROVAL--RULES--ADMINISTRATION.--

A. The operator of a proposed production restoration project, production compliance project or well workover project shall apply to the division for approval of a production restoration project, production compliance project or a well workover project in the form and manner prescribed by the division and shall provide any relevant material and information the division requires for that approval.

B. Upon a determination that the project complies with the provisions of the Natural Gas and Crude Oil Production Incentive Act and rules adopted pursuant to that act, the division shall approve the application and shall issue a certification of approval to the operator and designate the natural gas or oil well as a production restoration project, production compliance project or well workover project, as applicable.

C. In addition to the powers enumerated in Section 70-2-12 NMSA 1978, the division shall adopt, promulgate and enforce rules to carry out the provisions of the Natural Gas and Crude Oil Production Incentive Act.

D. The division shall consider and approve applications for approval of a production restoration project, production compliance project or well workover project without holding hearings on the applications. If the division denies approval of an application pursuant to such a process, the division, upon the request of the applicant, shall set a hearing of the application before an examiner appointed by the division to conduct the hearing. The hearing shall be conducted in accordance with the provisions of the Oil and Gas Act for such hearings."

SECTION 21. Section 7-29B-5 NMSA 1978 (being Laws 1995, Chapter 15, Section 5, as amended) is amended to read:

"7-29B-5. NOTICE TO SECRETARY OF TAXATION AND REVENUE.--The division shall notify immediately the secretary of taxation and revenue upon:

A. adoption of rules pursuant to the provisions of the Natural Gas and Crude Oil Production Incentive Act;

B. certification of the date that production has been restored on a production restoration project;

C. certification of the date that a production compliance project has been completed;

[C.] D. certification of the date that a well workover project has been completed; and

[D.] E. certification of the stripper well properties for the fiscal year."

SECTION 22. Section 7-29B-6 NMSA 1978 (being Laws 1995, Chapter 15, Section 6, as amended) is amended to read:

"7-29B-6. QUALIFICATION FOR PRODUCTION RESTORATION INCENTIVE TAX EXEMPTION, PRODUCTION COMPLIANCE PROJECT TAX EXEMPTION AND WELL WORKOVER AND STRIPPER WELL PROPERTY INCENTIVE TAX RATE--SECRETARY OF TAXATION AND REVENUE APPROVAL--REFUND.--

A. The person responsible for paying the oil and gas severance tax on natural gas or oil produced from a production restoration project shall qualify to receive a ten-year production restoration incentive tax exemption upon:

(1) application to the department in the form and manner prescribed by the department for approval for the ten-year production restoration incentive tax exemption;

(2) submission of the certification of approval from the division and designation of the natural gas or oil well as a production restoration project; and

(3) submission of any other relevant material that the secretary of taxation and revenue deems necessary to administer the applicable provisions of the Natural Gas and Crude Oil Production Incentive Act.

B. The person responsible for paying the oil and gas severance tax on natural gas or oil produced from a production compliance project shall qualify to receive a production compliance project tax exemption upon:

(1) application to the department in the form and manner prescribed by the department for approval of the production compliance project tax exemption;

(2) submission of the certification of approval from the division and designation of the natural gas or oil well as a production compliance project;

(3) submission to the department of verifiable total costs of compliance for the production compliance project for payout purposes; and

(4) submission of any other relevant material that the department deems necessary to administer the applicable provisions of the Natural Gas and Crude Oil Production Incentive Act.

[B.] C. The person responsible for payment of the oil and gas severance tax on natural gas or oil produced from a well workover project shall qualify for the well workover incentive tax rate on all the natural gas or oil produced by that project upon:

(1) application to the department in the form and manner prescribed by the department for approval to apply the well workover incentive tax rate to the natural gas or oil produced from a well workover project;

(2) submission of the certification from the division of approval and designation of the natural gas or oil well as a well workover project; and

(3) any other relevant material that the department considers necessary to administer the applicable provisions of the Natural Gas and Crude Oil Production Incentive Act.

[C.] D. The person responsible for paying the oil and gas severance tax and the oil and gas emergency school tax on natural gas and crude oil produced from a stripper well property shall qualify to receive the stripper well property incentive tax rate for the fiscal year following certification by the division in the form and manner agreed to by the division and the department designating the property as a stripper well property. The division shall certify stripper well properties for calendar year 1998 no later than June 30, 1999 and no later than June 1 of each succeeding year for the preceding calendar year.

[D.] E. The production restoration incentive tax exemption shall apply to natural gas or oil produced from a production restoration project beginning the first day of the month following the date the division certifies that production has been restored and ending the last day of the tenth year of production following that date. The well workover incentive tax rate applies to the natural gas or oil produced from a well workover project beginning the first day of the month following the date the division certifies that the well workover project has been completed. The stripper well property incentive tax rates apply to the natural gas or oil produced from a stripper well property in the twelve months beginning May 1 prior to July 1 of the fiscal year to which the certification of the property as a stripper well property applies.

[E.] F. The person responsible for payment of the oil and gas severance tax on natural gas or oil production from an approved well workover project may file a claim for credit against current tax liability or for refund in accordance with Section 7-1-26 NMSA 1978 for taxes paid in excess of the amount due using the well workover incentive tax rate. Notwithstanding the provisions of Subsection E of Section 7-1-26 NMSA 1978, any such refund granted shall be made in the form of a credit against any future oil and gas severance tax liabilities incurred by the taxpayer.

[F.] G. Well workover projects certified prior to July 1, 1999 shall be deemed to be approved and certified in accordance with the provisions of this 1999 act and natural gas or oil produced from those projects shall be eligible for the well workover incentive tax rate effective beginning July 1, 1999.

[G.] H. The secretary of taxation and revenue may adopt and promulgate rules to enforce the provisions of this section."

SECTION 23. Section 7-2-18.16 NMSA 1978 (being Laws 2007, Chapter 45, Section 10) is amended to read:

"7-2-18.16. CREDIT--SPECIAL NEEDS ADOPTED CHILD TAX CREDIT--CREATED--QUALIFICATIONS--DURATION OF CREDIT.--

A. A taxpayer who files an individual New Mexico income tax return, who is not a dependent of another individual and who adopts a special needs child on or after January 1, 2007 or has adopted a special needs child prior to January 1, 2007, may claim a

credit against the taxpayer's tax liability imposed pursuant to the

Income Tax Act. The credit authorized pursuant to this section may be referred to as the "special needs adopted child tax credit".

B. A taxpayer may claim and the department may allow a special needs adopted child tax credit in the amount of [one thousand dollars ($1,000)] one thousand five hundred dollars ($1,500) to be claimed against the taxpayer's tax liability for the taxable year imposed pursuant to the Income Tax Act.

C. A taxpayer may claim a special needs adopted child tax credit for each year that the child may be claimed as a dependent for federal taxation purposes by the taxpayer.

D. If the amount of the special needs adopted child tax credit due to the taxpayer exceeds the taxpayer's individual income tax liability, the excess shall be refunded.

E. [A husband and wife] Married individuals 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 special needs adopted child tax credit provided in this section that would have been allowed on a joint return.

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

G. The department shall compile an annual report on the credit provided by this section 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 credit. The department shall present the report to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the cost of the tax credit.

[F.] H. As used in this section, "special needs adopted child" means an individual who may be over eighteen years of age and who is certified by the children, youth and families department or a licensed child placement agency as meeting the definition of a "difficult to place child" pursuant to the Adoption Act; provided, however, if the classification as a "difficult to place child" is based on a physical or mental impairment or an emotional disturbance the physical or mental impairment or emotional disturbance shall be at least moderately disabling."

SECTION 24. A new section of the Income Tax Act is enacted

to read:

"[NEW MATERIAL] DEDUCTION--SCHOOL SUPPLIES PURCHASED BY A PUBLIC SCHOOL TEACHER.--

A. A taxpayer who is not a dependent of another individual and is a public school teacher may claim a deduction from net income in an amount equal to the costs of school supplies purchased by the public school teacher in a taxable year, not to exceed:

(1) for a taxable year beginning on January 1, 2024 and prior to January 1, 2025, five hundred dollars ($500); and

(2) for a taxable year beginning on January 1, 2025 and prior to January 1, 2029, one thousand dollars ($1,000).

B. To claim a deduction pursuant to this section, a taxpayer shall submit to the department information required by the secretary establishing that the taxpayer is eligible to claim a deduction pursuant to this section.

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

D. The department shall compile an annual report on the deduction provided by this section that shall include the number of taxpayers approved by the department to receive the deduction, the aggregate amount of deductions approved and any other information necessary to evaluate the deduction. The department shall present the report to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the cost of the deduction.

E. As used in this section:

(1) "public school teacher" means a person who is licensed as a teacher pursuant to the Public School Code and who teaches at a public school, as that term is defined in the Public School Code; and

(2) "school supplies" means items purchased by a public school teacher and used by the students of the teacher in the teacher's classroom for educational purposes, including notebooks, paper, writing instruments, crayons, art supplies, rulers, maps and globes, but not including computers or other similar digital devices, watches, radios, digital music players, headphones, sporting equipment, portable or desktop telephones, cellular telephones or other electronic communication devices, copiers, office equipment, furniture or fixtures."

SECTION 25. Section 7-2-18.24 NMSA 1978 (being Laws 2009, Chapter 271, Section 1) is amended to read:

"7-2-18.24. GEOTHERMAL GROUND-COUPLED HEAT PUMP INCOME TAX CREDIT.--

A. A taxpayer who files an individual New Mexico income tax return for a taxable year beginning on or after January 1, [2010] 2024 and who purchases and installs after [January 1, 2010] the effective date of this section but before December 31, [2020] 2034 a geothermal ground-coupled heat pump in a residence, business or agricultural enterprise in New Mexico owned by that taxpayer may apply for, and the department may allow, a tax credit of up to thirty percent of the purchase and installation costs of the system. The credit provided in this section may be referred to as the "geothermal ground-coupled heat pump income tax credit". The total geothermal ground-coupled heat pump income tax credit allowed to a taxpayer shall not exceed nine thousand dollars ($9,000). The department shall allow a geothermal ground-coupled heat pump income tax credit only for geothermal ground-coupled heat pumps that are installed by a nationally accredited ground source heat pump installer certified by the energy, minerals and natural resources department.

B. [A] That portion of [the] a geothermal ground-coupled heat pump income tax credit that [remains unused in a] exceeds a taxpayer's tax liability in the taxable year [may be carried forward for a maximum of ten consecutive taxable years following the taxable year in which the credit originates until the credit is fully expended] in which the credit is claimed shall be refunded to the taxpayer.

C. [Prior to July 1, 2010] The energy, minerals and natural resources department shall adopt rules establishing procedures to provide certification of geothermal ground-coupled heat pumps for purposes of obtaining a geothermal ground-coupled heat pump income tax credit. The rules shall address technical specifications and requirements relating to safety, building code and standards compliance, 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.

D. The [department may allow a] maximum annual aggregate of [two million dollars ($2,000,000) in geothermal ground-coupled heat pump tax] credits that may be certified in a calendar year by the energy, minerals and natural resources department is four million dollars ($4,000,000). That department shall not certify a tax credit for which a taxpayer claims a 2021 sustainable building tax credit using a geothermal ground-coupled heat pump as a component of qualification for the rating system certification level used in determining eligibility for that credit. Applications for the credit shall be considered in the order received by the department.

E. A taxpayer who otherwise qualifies and claims a geothermal ground-coupled heat pump income tax credit with respect to property 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 property shall not exceed the amount of the credit that could have been claimed by a sole owner of the property.

F. [A husband and wife] Married individuals 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.

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

H. The department shall compile an annual report on the tax credit provided by this section 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 credit. The department shall present the report to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the cost of the tax credit.

[G.] I. As used in this section, "geothermal ground-coupled heat pump" means a [system that uses energy from the ground, water or, ultimately, the sun for distribution of heating, cooling or domestic hot water] heating and refrigerating system that directly or indirectly utilizes available heat below the surface of the earth for distribution of heating and cooling or domestic hot water and that has either a minimum coefficient of performance of three and four-tenths or an efficiency ratio of sixteen or greater [and that is installed by an accredited installer certified by the international ground source heat pump association]."

SECTION 26. Section 7-2A-24 NMSA 1978 (being Laws 2009, Chapter 271, Section 2) is amended to read:

"7-2A-24. GEOTHERMAL GROUND-COUPLED HEAT PUMP CORPORATE INCOME TAX CREDIT.--

A. A taxpayer that files a New Mexico corporate income tax return for a taxable year beginning on or after January 1, [2010] 2024 and that purchases and installs after [January 1, 2010] the effective date of this section but before December 31, [2020] 2034 a geothermal ground-coupled heat pump in a property owned by the taxpayer may claim against the taxpayer's corporate income tax liability, and the department may allow, a tax credit of up to thirty percent of the purchase and installation costs of the system. The credit provided in this section may be referred to as the "geothermal ground-coupled heat pump corporate income tax credit". The total geothermal ground-coupled heat pump corporate income tax credit allowed to a taxpayer shall not exceed nine thousand dollars ($9,000). The department shall allow a geothermal ground-coupled heat pump corporate income tax credit only for geothermal ground-coupled heat pumps that are installed by a nationally accredited ground source heat pump installer certified by the energy, minerals and natural resources department.

B. [A] That portion of [the] a geothermal ground-coupled heat pump corporate income tax credit that [remains unused in a] exceeds a taxpayer's tax liability in the taxable year [may be carried forward for a maximum of ten consecutive taxable years following the taxable year in which the credit originates until the credit is fully expended] in which the credit is claimed shall be refunded to the taxpayer.

C. [Prior to July 1, 2010] The energy, minerals and natural resources department shall adopt rules establishing procedures to provide certification of geothermal ground-coupled heat pumps for purposes of obtaining a geothermal ground-coupled heat pump corporate income tax credit. The rules shall address technical specifications and requirements relating to safety, building code and standards compliance, 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.

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

F. The department shall compile an annual report on the tax credit provided by this section 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 credit. The department shall present the report to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the cost of the tax credit.

[E.] G. As used in this section, "geothermal ground-coupled heat pump" means a [reversible refrigerator device that provides space heating, space cooling, domestic hot water, processed hot water, processed chilled water or any other application where hot air, cool air, hot water or chilled water is required and that utilizes ground water or water circulating through pipes buried in the ground as a condenser in the cooling mode and an evaporator in the heating mode] heating and refrigerating system that directly or indirectly utilizes available heat below the surface of the earth for distribution of heating and cooling or domestic hot water and that has either a minimum coefficient of performance of three and four-tenths or an efficiency ratio of sixteen or greater."

SECTION 27. A new section of the Income Tax Act is enacted to read:

"[NEW MATERIAL] CLEAN CAR INCOME TAX CREDIT.--

A. A taxpayer who is not a dependent of another individual and who, beginning on the effective date of this section and prior to January 1, 2030, purchases an electric vehicle, plug-in hybrid electric vehicle or fuel cell vehicle or enters into a new lease of at least three years for one of these vehicles may claim a tax credit against the taxpayer's tax liability imposed pursuant to the Income Tax Act in an amount provided in Subsection B of this section. The tax credit provided by this section may be referred to as the "clean car income tax credit".

B. The amount of the tax credit shall be in an amount equal to:

(1) for taxable years beginning January 1, 2024 and prior to January 1, 2027:

(a) three thousand dollars ($3,000) for a new electric vehicle;

(b) two thousand five hundred dollars ($2,500) for a new plug-in hybrid electric vehicle or fuel cell vehicle;

(d) two thousand dollars ($2,000) for a previously owned plug-in hybrid electric vehicle or fuel cell vehicle;

(2) for a taxable year beginning January 1, 2027 and prior to January 1, 2028:

(a) two thousand two hundred twenty dollars ($2,220) for a new electric vehicle;

(b) one thousand eight hundred fifty dollars ($1,850) for a new plug-in hybrid electric vehicle or fuel cell vehicle;

(d) one thousand four hundred eighty dollars ($1,480) for a previously owned plug-in hybrid electric vehicle or fuel cell vehicle;

(3) for a taxable year beginning on January 1, 2028 and prior to January 1, 2029:

(a) one thousand four hundred seventy dollars ($1,470) for a new electric vehicle;

(b) one thousand two hundred twenty-five dollars ($1,225) for a new plug-in hybrid electric vehicle or fuel cell vehicle;

(d) nine hundred eighty dollars ($980) for a previously owned plug-in hybrid electric vehicle or fuel cell vehicle; and

(4) for the taxable year beginning January 1, 2029:

(a) nine hundred sixty dollars ($960) for a new electric vehicle;

(b) eight hundred dollars ($800) for a new plug-in hybrid electric vehicle or fuel cell vehicle;

(d) six hundred forty dollars ($640) for a previously owned plug-in hybrid electric vehicle or fuel cell vehicle.

C. For a previously owned motor vehicle to be eligible for the tax credit, the vehicle shall have a model year that is at least two years prior to the calendar year in which the taxpayer purchased or leased the vehicle.

D. A taxpayer shall apply for certification of eligibility for the tax credit from the energy, minerals and natural resources department on forms and in the manner prescribed by that department. Except as provided in Subsections I and J of this section, only one tax credit shall be certified per taxpayer per taxable year, and only one tax credit shall be certified per previously owned motor vehicle. The energy, minerals and natural resources department may promulgate rules governing the procedure for administering the provisions of this subsection.

E. An application for certification of eligibility shall include proof of vehicle purchase from or lease through a dealer licensed by the motor vehicle division of the department pursuant to Section 66-4-2 NMSA 1978 or a dealer located on tribal land within New Mexico, the vehicle's registration or application for title and registration in New Mexico and any additional information the energy, minerals and natural resources department may require to determine eligibility for the credit. If the energy, minerals and natural resources department determines that the taxpayer meets the requirements of this section, that department shall issue a dated certificate of eligibility to the taxpayer providing the amount of tax credit for which the taxpayer is eligible and the taxable years in which the credit may be claimed. The energy, minerals and natural resources department shall provide the department with the certificates of eligibility issued pursuant to this subsection in an electronic format at regularly agreed upon intervals.

F. Applications for certification of the tax credit shall be made no later than one year from the date on which the vehicle is purchased or the lease is entered into.

G. A certificate of eligibility for the tax credit may be sold, exchanged or otherwise transferred to another taxpayer for the full value of the credit. 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 in an electronic format prescribed by the department.

H. That portion of the tax credit claimed by a taxpayer that exceeds the taxpayer's income tax liability in the taxable year in which a clean car income tax credit is claimed shall be refunded to the taxpayer.

I. 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 tax credit that would have been claimed on a joint return.

J. A taxpayer may be allocated the right to claim the tax credit in proportion to the taxpayer's ownership interest if the taxpayer owns an interest in a business entity that is taxed for federal income tax purposes as a partnership or limited liability company and that business entity has met all of the requirements to be eligible for the credit. The total credit claimed by all members of the partnership or limited liability company shall not exceed the allowable credit pursuant to this section.

K. A taxpayer allowed to claim the tax credit shall claim the tax credit in a manner required by the department. The credit shall be claimed within three taxable years of the end of the year in which the energy, minerals and natural resources department certifies the credit.

L. As used in this section:

(1) "electric vehicle" means a motor vehicle that derives all of the vehicle's power from electricity stored in a battery that:

(a) has a capacity of not less than twenty-five kilowatt-hours;

(b) is capable of powering the vehicle for a range of at least one hundred miles; and

(2) "fuel cell vehicle" means a motor vehicle that:

(a) uses a fuel cell to produce electricity that is used to drive an electric motor; and

(b) is capable of powering the vehicle for a range of at least one hundred miles;

(3) "motor vehicle" means a vehicle with four wheels that:

(a) is required under the Motor Vehicle Code to be registered in this state and that is registered in this state;

(b) is made by a manufacturer;

(d) has not been modified from the original manufacturer specifications;

(e) is rated at not less than two thousand two hundred pounds unloaded base weight and not more than nine thousand seven hundred fifty pounds unloaded base weight;

(f) has a maximum speed capability of at least sixty-five miles per hour; and

(g) is purchased from or leased through a dealer licensed by the motor vehicle division of the department pursuant to Section 66-4-2 NMSA 1978 or a dealer located on tribal land within New Mexico;

(4) "new" means a motor vehicle that has a base manufacturer suggested retail price, before options and destination charges and before any taxes are imposed, of fifty-five thousand dollars ($55,000) or less;

(5) "plug-in hybrid electric vehicle" means a motor vehicle that derives part of the vehicle's power from electricity stored in a battery that:

(a) has a capacity of not less than six kilowatt-hours;

(b) is capable of powering a vehicle for a range of at least thirty miles; and

(6) "previously owned" means a motor vehicle that is not new, that has a market value of twenty-five thousand dollars ($25,000) or less, that is certified by the dealer selling the motor vehicle and for which the dealer provides at least a one-year extended manufacturer's warranty against defects and repairs; and

(7) "tribal land" means all land owned by a tribe and located within the exterior boundaries of the tribe's reservation or grant and all land held by the United States in trust for the tribe."

SECTION 28. A new section of the Income Tax Act is enacted to read:

"[NEW MATERIAL] CLEAN CAR CHARGING UNIT INCOME TAX CREDIT.--

A. A taxpayer who is not a dependent of another individual and who, beginning on the effective date of this section and prior to January 1, 2030, purchases and installs an electric vehicle charging unit or fuel cell charging unit in New Mexico may claim a credit against the taxpayer's tax liability imposed pursuant to the Income Tax Act in an amount provided in Subsection B of this section. The tax credit provided by this section may be referred to as the "clean car charging unit income tax credit".

B. The amount of tax credit shall be in an amount equal to:

(1) for a direct current fast charger or fuel cell charging unit, twenty-five thousand dollars ($25,000) or the cost to purchase and install the direct current fast charger or fuel cell charging unit, whichever is less; and

(2) for all other electric vehicle charging units, four hundred dollars ($400) or the cost to purchase and install the electric vehicle charging unit, whichever is less.

C. A taxpayer shall apply for certification of eligibility for the tax credit from the energy, minerals and natural resources department on forms and in the manner prescribed by that department. Except as provided in Subsections H and I of this section, only one tax credit shall be certified for a direct current fast charger or a fuel cell charging unit per taxpayer per taxable year. The energy, minerals and natural resources department may issue rules governing the procedure for administering the provisions of this subsection.

D. An application for certification of eligibility shall include:

(1) a receipt for the purchase and installation of the electric vehicle charging unit or fuel cell charging unit;

(2) for electric vehicle charging units, a copy of the data sheet that specifies the connector type, plug type, voltage and current of the electric vehicle charging unit;

(3) for a fuel cell charging unit, technical specifications on the fuel dispensing unit and fuel storage system, including information about operational pressures of the fuel cell charging unit; and

(4) any other information the energy, minerals and natural resources department may require to evaluate eligibility for the credit.

E. If the energy, minerals and natural resources department determines that the taxpayer meets the requirements of this section, that department shall issue a dated certificate of eligibility to the taxpayer providing the amount of tax credit for which the taxpayer is eligible and the taxable years in which the credit may be claimed. The energy, minerals and natural resources department shall provide the department certificates of eligibility issued in an electronic format at regularly agreed upon intervals.

F. An application for certification of the tax credit shall be made no later than one year from the date in which the electric vehicle charging unit or fuel cell charging unit for which the credit is claimed is purchased and installed.

G. That portion of tax credit that exceeds a taxpayer's income tax liability in the taxable year in which the credit is claimed shall be refunded to the taxpayer.

H. 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 tax credit that would have been claimed on a joint return.

I. A taxpayer may be allocated the right to claim the tax credit in proportion to the taxpayer's ownership interest if the taxpayer owns an interest in a business entity that is taxed for federal income tax purposes as a partnership or limited liability company and that business entity has met all requirements to be eligible for the credit. The total credit claimed by all members of the partnership or limited liability company shall not exceed the allowable credit pursuant to this section.

J. A taxpayer allowed to claim a tax credit pursuant to this section shall claim the tax credit in a manner required by the department. The credit shall be claimed within three taxable years of the end of the year in which the energy, minerals and natural resources department certifies the credit.

K. A taxpayer who claims the 2021 sustainable building tax credit for expenses of purchasing or installing an electric vehicle charging unit or fuel cell charging unit shall not be eligible to claim the tax credit provided by this section.

L. As used in this section:

(1) "direct current fast charger" means an electric vehicle charging unit that provides at least fifty kilowatts of direct current electrical power for charging an electric vehicle through a connector based on fast charging equipment standards and that is approved for installation for that purpose under the National Electrical Code through an underwriters laboratories certification or an equivalent certifying organization;

(2) "electric vehicle" means a motor vehicle subject to the registration fee pursuant to Section 66-6-2 or 66-6-4 NMSA 1978 that derives all of the vehicle's power from electricity stored in a battery that:

(a) has a capacity of not less than twenty-five kilowatt-hours;

(b) is capable of powering the vehicle for a range of at least one hundred miles; and

(3) "electric vehicle charging unit" means a device that:

(a) is used to provide electricity to an electric vehicle or plug-in hybrid electric vehicle;

(b) is designed to create a connection between an electricity source and the electric vehicle or plug-in hybrid electric vehicle; and

(c) uses the electric vehicle's or plug-in hybrid electric vehicle's control system to ensure that electricity flows at an appropriate voltage and current level;

(4) "fuel cell charging unit" means a facility or unit that dispenses liquefied or compressed hydrogen for fuel cell vehicle refueling and that is approved for installation for that purpose under applicable codes and compliant with requirements of applicable certifying organizations;

(5) "fuel cell vehicle" means a motor vehicle subject to the registration fee pursuant to Section 66-6-2 or 66-6-4 NMSA 1978 that:

(a) uses a fuel cell to produce electricity that is used to drive an electric motor; and

(b) is capable of powering the vehicle for a range of at least one hundred miles; and

(6) "plug-in hybrid electric vehicle" means a motor vehicle subject to the registration fee pursuant to Section 66-6-2 or 66-6-4 NMSA 1978 that derives part of the vehicle's power from electricity stored in a battery that:

(a) has a capacity of not less than six kilowatt-hours;

(b) is capable of powering a vehicle for a range of at least thirty miles; and

SECTION 29. A new section of the Corporate Income and Franchise Tax Act is enacted to read:

"[NEW MATERIAL] CLEAN CAR CORPORATE INCOME TAX CREDIT.--

A. A taxpayer that, beginning on the effective date of this section and prior to January 1, 2030, purchases an electric vehicle, plug-in hybrid electric vehicle or fuel cell vehicle or enters into a new lease of at least three years for one of these vehicles may claim a tax credit against the taxpayer's tax liability imposed pursuant to the Corporate Income and Franchise Tax Act in an amount provided in Subsection B of this section. The tax credit provided by this section may be referred to as the "clean car corporate income tax credit".