2005 Committee Substitute for HB0121TRS

HOUSE TAXATION AND REVENUE COMMITTEE SUBSTITUTE FOR

HOUSE BILL 121

47th legislature - STATE OF NEW MEXICO - first session, 2005

AN ACT

RELATING TO TAXATION; PROVIDING FOR TAX CREDITS PERTAINING TO SOLAR ENERGY USE.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. SHORT TITLE.--This act may be cited as the "Solar Thermal and Photovoltaic Systems Tax Credit Act".

Section 2. DEFINITIONS.--As used in the Solar Thermal and Photovoltaic Systems Tax Credit Act:

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

B. "photovoltaic system" means a stand-alone or a grid-connected energy system that collects or absorbs sunlight for conversion into electricity; and

C. "solar thermal system" means an energy system that collects or absorbs solar energy for conversion into heat for the purposes of space heating and water heating.

Section 3. INCOME TAX--CORPORATE INCOME TAX--CREDIT FOR SOLAR THERMAL SYSTEM INSTALLATION.--

A. Except as otherwise provided by Subsection C of this section, a person who files an individual New Mexico income tax return for any taxable year beginning on or after January 1, 2007 and ending on or before December 31, 2016, and who installs a solar thermal system after July 1, 2005 at a residence in New Mexico owned by that person may apply for, and the department may allow, a tax credit in an amount equal to fifteen percent of the installation costs, provided that the maximum tax credit that may be claimed by the taxpayer pursuant to this subsection shall not exceed one thousand five hundred dollars ($1,500).

B. Except as otherwise provided by Subsection C of this section, a person that files a corporate income tax return for any taxable year beginning on or after January 1, 2007 and ending on or before December 31, 2006, and that installs a solar thermal system after July 1, 2005 at a commercial facility in New Mexico owned by that person may apply for, and the department may allow, a credit in an amount equal to fifteen percent of the installation costs, provided that the maximum tax credit that may be claimed by the taxpayer pursuant to this subsection shall not exceed one thousand five hundred dollars ($1,500).

C. The department shall not allow a tax credit pursuant to this section if allowing that tax credit would cause the aggregate amount of tax credits allowed pursuant to this subsection to exceed one million dollars ($1,000,000).

D. The tax credit allowed pursuant to Subsection A of this section may only be deducted from a taxpayer's New Mexico income tax liability for the taxable year. Any portion of the maximum credit provided by Subsection A of this section that remains unused at the end of the taxpayer's taxable year may be carried forward for three taxable years; provided that the total credits shall not exceed the maximum allowable credit pursuant to Subsection A of this section. Any portion of the maximum credit provided by Subsection A of this section that remains unused at the end of the third taxable year may be refunded to the taxpayer.

E. If a person claiming a tax credit pursuant to Subsection A of this section does not have any New Mexico income tax liability, the tax credit may be refunded to that person.

F. 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 credit allowed pursuant to Subsection A of this section that would have been allowed on a joint return.

G. The tax credit allowed pursuant to Subsection B of this section may only be deducted from a taxpayer's corporate income tax liability for the taxable year. Any portion of the maximum credit provided by Subsection B of this section that remains unused at the end of the taxpayer's taxable year may be carried forward for three consecutive taxable years; provided that the total credits claimed under this section shall not exceed the maximum allowable pursuant to Subsection B of this section. Any portion of the maximum credit provided by Subsection B of this section that remains unused at the end of the third taxable year may be refunded to the taxpayer.

H. If a person claiming a tax credit pursuant to Subsection B of this section does not have any corporate income tax liability, the tax credit may be refunded to that person.

Section 4. INCOME TAX--CORPORATE INCOME TAX--CREDIT FOR PHOTOVOLTAIC SYSTEM INSTALLATION.--

A. A person who files an individual New Mexico income tax return for any taxable year beginning on or after January 1, 2007 and ending on or before December 31, 2016, and who installs a photovoltaic system after July 1, 2005 in a residence in New Mexico owned by that person may apply for, and the department may allow, a credit in an amount equal to three dollars fifty cents ($3.50) per nameplate direct current wattage of that photovoltaic system, provided that:

(1) the maximum tax credit that may be claimed by the taxpayer pursuant to this subsection shall not exceed ten thousand dollars ($10,000); and

(2) the department shall not allow a tax credit pursuant to this subsection if allowing that tax credit would cause the aggregate amount of tax credits allowed pursuant to this subsection to exceed two million dollars ($2,000,000).

B. A person that files a corporate income tax return for any taxable year beginning on or after January 1, 2007 and ending on or before December 31, 2016, and that installs a photovoltaic system after July 1, 2005 in a facility in New Mexico that is owned by that person may apply for, and the department may allow, a credit in an amount equal to one dollar fifty cents ($1.50) per nameplate direct current wattage of that photovoltaic system, provided that:

(1) the maximum tax credit that may be claimed by the taxpayer pursuant to this subsection shall not exceed seventy-five thousand dollars ($75,000); and

C. The tax credit allowed pursuant to Subsection A of this section shall be deducted from a taxpayer's New Mexico income tax liability for the taxable year. Any portion of the maximum credit provided by Subsection A of this section that remains unused at the end of the taxpayer's taxable year may be carried forward for three consecutive taxable years; provided that the total credits claimed under this section shall not exceed the maximum allowable pursuant to Subsection A of this section. Any portion of the maximum credit provided by Subsection A of this section that remains unused at the end of the third taxable year may be refunded to the taxpayer.

D. If a person claiming a tax credit pursuant to Subsection A of this section does not have any New Mexico income tax liability, the tax credit may be refunded to that person.

E. 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 credit allowed pursuant to Subsection A of this section that would have been allowed on a joint return.

F. The tax credit allowed pursuant to Subsection B of this section shall be deducted from the taxpayer's corporate income tax liability for the taxable year. Any portion of the maximum credit provided by Subsection B of this section that remains unused at the end of the taxpayer's taxable year may be carried forward for three consecutive taxable years; provided that the total credits claimed under this section shall not exceed the maximum allowable pursuant to Subsection B of this section. Any portion of the maximum credit provided by Subsection B of this section that remains unused at the end of the third taxable year may be refunded to the taxpayer.

G. If a person claiming a tax credit pursuant to Subsection B of this section does not have any corporate income tax liability, the tax credit may be refunded to that person.

Section 5. ADMINISTRATION.--

A. The energy, minerals and natural resources department shall adopt rules for administration of the provisions of the Solar Thermal and Photovoltaic System Tax Act no later than September 30, 2005.

B. A solar thermal system or a photovoltaic system for which a tax credit is allowed under the Solar Thermal and Photovoltaic System Tax Act must be certified by the energy, minerals and natural resources department to meet technical requirements established by the energy, minerals and natural resources department. Technical requirements may include, but are not limited to, requirements relating to safety, code and standards compliance, solar collector orientation and sun exposure, minimum system sizes, system applications and lists of eligible components. The energy, minerals and natural resources department shall adopt and publish on its web site an initial description of technical requirements no later than August 1, 2005. The energy, minerals and natural resources department may modify those requirements as needed to ensure a high level of system quality and performance.

C. The taxation and revenue department shall prescribe application forms for the tax credits allowed pursuant to the Solar Thermal and Photovoltaic System Tax Act no later than December 31, 2006.

Section 6. REPORT TO APPROPRIATE INTERIM COMMITTEE.--Beginning in 2008, the energy, minerals and natural resources department shall report to the appropriate interim committee of the legislature every two years and provide an update of the status of the Solar Thermal and Photovoltaic Systems Tax Act and recommendations for modifications of that act. Section 7. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2007.

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