HOUSE BILL 77
57th legislature - STATE OF NEW MEXICO - second session, 2026
INTRODUCED BY
Rebecca Dow
AN ACT
RELATING TO TAXATION; CREATING THE AFFORDABLE HOUSING REVITALIZATION CORPORATE INCOME TAX CREDIT; PROVIDING A DELAYED REPEAL.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. A new section of the Corporate Income and
Franchise Tax Act is enacted to read:
"[NEW MATERIAL] AFFORDABLE HOUSING REVITALIZATION CORPORATE INCOME TAX CREDIT.--
A. A taxpayer that, beginning on the effective date of this section and prior to January 1, 2037, incurs rehabilitation expenses for a revitalization project in New Mexico may claim a credit against the taxpayer's tax liability imposed pursuant to the Corporate Income and Franchise Tax Act. The tax credit provided by this section may be referred to as the "affordable housing revitalization corporate income tax credit".
B. The amount of tax credit shall be in an amount equal to thirty percent of the rehabilitation expenses incurred for a building or lot that has been vacant for more than two years but less than five years, up to a maximum of two million dollars ($2,000,000) per taxpayer, or forty percent of the rehabilitation expenses incurred for a building or lot that has been vacant for five years or longer, up to a maximum of four million dollars ($4,000,000) per taxpayer; provided that:
(1) at least fifteen percent of the residential housing units developed are affordable housing; and
(2) the rehabilitation expenses are at least eighty percent but not more than one hundred twenty-five percent of the estimated rehabilitation expenses stated in the notice of intent to rehabilitate pursuant to Subsection C of this section.
C. Prior to incurring rehabilitation expenses, a taxpayer shall apply for pre-certification from the New Mexico mortgage finance authority on forms and in the manner prescribed by the authority. The application shall include a proposal for the revitalization project and a notice of intent to rehabilitate that provides the location of the building or lot, the estimated expenses and the proposed use upon the completion of the project. If the New Mexico mortgage finance authority determines that the projected costs are likely to meet the requirements to be rehabilitation expenses eligible for the tax credit, the authority shall issue a pre-certification to the taxpayer; provided that pre-certification received shall not mean that the actual costs for the revitalization project will be approved for a credit provided by this section.
D. Within one calendar year of the date the revitalization project is complete and the building is ready for occupancy, the taxpayer shall apply for certification of eligibility from the New Mexico mortgage finance authority on forms and in the manner prescribed by the authority. The application shall include an affidavit from a certified public accountant verifying that the rehabilitation expenses were incurred by the taxpayer and meet the requirements of this section. The aggregate amount of credits that may be certified as eligible in a calendar year is one hundred million dollars ($100,000,000); provided that no more than fifty million dollars ($50,000,000) in credits shall be allowed for projects developed in areas that are not rural areas. Completed applications shall be considered in the order received. Applications for certification received after the limitation on the aggregate amount of credits has been met in a calendar year shall not be approved. If a taxpayer is eligible for the credit, a dated certificate of eligibility shall be issued to the taxpayer providing the amount of credit for which the taxpayer is eligible.
E. A certificate of eligibility provided by this section 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.
F. That portion of approved credit claimed by a taxpayer that exceeds the taxpayer's income tax liability in the taxable year in which the credit is claimed shall not be refunded but may be carried forward for a maximum of five consecutive taxable years.
G. To receive a tax credit provided by this section, a taxpayer shall claim the credit on forms and in the manner prescribed by the department within twelve months following the calendar year in which the certificate of eligibility was issued.
H. The credit provided by this section shall be included in the tax expenditure budget pursuant to Section 7-1-84 NMSA 1978, including the annual aggregate cost of the credit.
I. As used in this section:
(1) "abandoned building" means a structure or part of a structure in New Mexico that has been unoccupied and non-operational for income-producing purposes for at least two years prior to the filing of a notice of intent to rehabilitate;
(2) "affordable housing" means single-family or multifamily residential housing primarily for persons or households of low or moderate income;
(3) "low or moderate income" means a household in which the current annual income is at or below eighty-five percent of the area median income for the geographic area in which the household is located, adjusted for family size, as determined by the United States department of housing and urban development;
(4) "rehabilitation expenses" means capital expenditures incurred while participating in a voluntary remediation program administered by the department of environment or for a revitalization project, including structural repairs, environmental remediation, site improvements, new construction related to the project, acquisition, design, engineering and permitting, but excluding costs related to personal property;
(5) "revitalization project" means the renovation, development or redevelopment of an abandoned building or a vacant lot into single-family or multifamily residential housing;
(6) "rural area" means a county that has a population less than one hundred twenty-five thousand persons according to the most recent federal decennial census or a municipality with a population less than fifty thousand persons according to the most recent federal decennial census; and
(7) "vacant lot" means a parcel of land in New Mexico without a structure or part of a structure that has been unoccupied and non-operational for income-producing purposes for at least two years prior to the filing of a notice of intent to rehabilitate."
SECTION 2. DELAYED REPEAL.--Section 1 of this act is repealed effective January 1, 2038.
SECTION 3. APPLICABILITY.--The provisions of this act
apply to taxable years beginning on or after January 1, 2026.
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