HOUSE BILL 166

50th legislature - STATE OF NEW MEXICO - first session, 2011

INTRODUCED BY

Edward C. Sandoval

FOR THE REVENUE STABILIZATION AND TAX POLICY COMMITTEE

AN ACT

RELATING TO TAXATION; PROVIDING FOR REVIEW OF CERTAIN TAX CREDITS.

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

     SECTION 1. Section 7-2-18.2 NMSA 1978 (being Laws 1984, Chapter 34, Section 1, as amended) is amended to read:

     "7-2-18.2. CREDIT FOR PRESERVATION OF CULTURAL PROPERTY--REFUND.--

          A. Tax credits for the preservation of cultural property may be claimed as follows:

                (1) to encourage the restoration, rehabilitation and preservation of cultural properties, a taxpayer who files an individual New Mexico income tax return and who is not a dependent of another individual and who is the owner of a cultural property listed on the official New Mexico register of cultural properties, with the taxpayer's consent, may claim a credit not to exceed a maximum aggregate of twenty-five thousand dollars ($25,000) in an amount equal to one-half of the cost of restoration, rehabilitation or preservation of a cultural property listed on the official New Mexico register; or

                (2) if a cultural property, whose owner may otherwise claim the credit set forth in Paragraph (1) of this subsection is also located within an arts and cultural district certified by the state or a municipality pursuant to the Arts and Cultural District Act, the owner of that cultural property may claim a credit not to exceed fifty thousand dollars ($50,000), including any credit claimed pursuant to Paragraph (1) of this subsection, in an amount equal to one-half of the cost of restoration, rehabilitation or preservation of the cultural property.

          B. The taxpayer may claim the credit if:

                (1) the taxpayer submitted a plan and specifications for restoration, rehabilitation or preservation to the committee and received approval from the committee for the plan and specifications prior to commencement of the restoration, rehabilitation or preservation;

                (2) the taxpayer received certification from the committee after completing the restoration, rehabilitation or preservation, or committee-approved phase, that it conformed to the plan and specifications and preserved and maintained those qualities of the property that made it eligible for inclusion in the official register; and

                (3) the project is completed within twenty-four months of the date the project is approved by the committee in accordance with Paragraph (1) of this subsection.

          C. A taxpayer may claim the credit provided in this section for each taxable year in which restoration, rehabilitation or preservation is carried out. Except as provided in Subsection F of this section, claims for the credit provided in this section shall be limited to three consecutive years, and the maximum aggregate credit allowable shall not exceed twenty-five thousand dollars ($25,000) if governed by Paragraph (1) of Subsection A of this section, or fifty thousand dollars ($50,000) if governed by Paragraph (2) of Subsection A of this section, for any single restoration, rehabilitation or preservation project for any cultural property listed on the official New Mexico register certified by the committee.

          D. 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 that would have been allowed on a joint return.

          E. A taxpayer who otherwise qualifies and claims a credit on a restoration, rehabilitation or preservation project on property owned by a partnership of which the taxpayer is a member may claim a credit only in proportion to the taxpayer's interest in the partnership. The total credit claimed by all members of the partnership shall not exceed twenty-five thousand dollars ($25,000) in the aggregate if governed by Paragraph (1) of Subsection A of this section, or fifty thousand dollars ($50,000) in the aggregate if governed by Paragraph (2) of Subsection A of this section, for any single restoration, rehabilitation or preservation project for any cultural property listed on the official New Mexico register certified by the committee.

          F. The credit provided in this section may only be deducted from the taxpayer's income tax liability. Any portion of the maximum tax credit provided by this section that remains unused at the end of the taxpayer's taxable year may be carried forward for four consecutive years; provided, however, the total tax credits claimed under this section shall not exceed twenty-five thousand dollars ($25,000) if governed by Paragraph (1) of Subsection A of this section, or fifty thousand dollars ($50,000) if governed by Paragraph (2) of Subsection A of this section, for any single restoration, preservation or rehabilitation project for any cultural property listed on the official New Mexico register.

          G. The historic preservation division shall promulgate regulations for the implementation of Subsection B of this section.

          H. Beginning in 2014 and at six-year intervals following 2014, the department shall present a report on the tax credit provided pursuant to this section to the revenue stabilization and tax policy committee for review. The revenue stabilization and tax policy committee, with the aid of the department and the cultural affairs department, shall determine if a need remains for the credit, if the credit is effectively being used for the purpose for which it was created and if the use of the credit is cost-effective. The credit may be proposed for repeal or amendment if it is found by the revenue stabilization and tax policy committee to be ineffective, more costly than is warranted by the purpose for which the credit was proposed or unused or otherwise no longer needed.

          [H.] I. As used in this section:

                (1) "committee" means the cultural properties review committee created in Section 18-6-4 NMSA 1978; and

                (2) "historic preservation division" means the historic preservation division of the cultural affairs department created in Section 18-6-8 NMSA 1978."

     SECTION 2. Section 7-2-18.10 NMSA 1978 (being Laws 2003, Chapter 331, Section 7, as amended) is amended to read:

     "7-2-18.10. TAX CREDIT--CERTAIN CONVEYANCES OF REAL PROPERTY.--

          A. There shall be allowed as a credit against the tax liability imposed by the Income Tax Act, an amount equal to fifty percent of the fair market value of land or interest in land that is conveyed for the purpose of open space, natural resource or biodiversity conservation, agricultural preservation or watershed or historic preservation as an unconditional donation in perpetuity by the landowner or taxpayer to a public or private conservation agency eligible to hold the land and interests therein for conservation or preservation purposes. The fair market value of qualified donations made pursuant to this section shall be substantiated by a "qualified appraisal" prepared by a "qualified appraiser", as those terms are defined under applicable federal laws and regulations governing charitable contributions.

          B. The amount of the credit that may be claimed by a taxpayer shall not exceed one hundred thousand dollars ($100,000) for a conveyance made prior to January 1, 2008 and shall not exceed two hundred fifty thousand dollars ($250,000) for a conveyance made on or after that date. In addition, in a taxable year, the credit used may not exceed the amount of individual income tax otherwise due. A portion of the credit that is unused in a taxable year may be carried over for a maximum of twenty consecutive taxable years following the taxable year in which the credit originated until fully expended. A taxpayer may claim only one tax credit per taxable year.

          C. Qualified donations shall include the conveyance in perpetuity of a fee interest in real property or a less-than-fee interest in real property, such as a conservation restriction, preservation restriction, agricultural preservation restriction or watershed preservation restriction, pursuant to the Land Use Easement Act and provided that the less-than-fee interest qualifies as a charitable contribution deduction under Section 170(h) of the Internal Revenue Code. Dedications of land for open space for the purpose of fulfilling density requirements to obtain subdivision or building permits shall not be considered as qualified donations pursuant to the Land Conservation Incentives Act.

          D. Qualified donations shall be eligible for the tax credit if the donations are made to the state of New Mexico, a political subdivision thereof or a charitable organization described in Section 501(c)(3) of the Internal Revenue Code and that meets the requirements of Section 170(h)(3) of that code.

           E. To be eligible for treatment as qualified donations under this section, land or interests in lands must be certified by the secretary of energy, minerals and natural resources as fulfilling the purposes as set forth in Section

75-9-2 NMSA 1978. The use and protection of the lands, or interests therein, for open space, natural area protection, biodiversity habitat conservation, land preservation, agricultural preservation, historic preservation or similar use or purpose of the property shall be assured in perpetuity.

          F. A taxpayer may apply for certification of eligibility for the tax credit provided by this section from the energy, minerals and natural resources department. If the energy, minerals and natural resources department determines that the application meets the requirements of this section and that the property conveyed will not adversely affect the property rights of contiguous landowners, it shall issue a certificate of eligibility to the taxpayer, which shall include a calculation of the maximum amount of tax credit for which the taxpayer would be eligible. The energy, minerals and natural resources department may issue rules governing the procedure for administering the provisions of this subsection.            G. To receive a credit pursuant to this section, a person shall apply to the taxation and revenue department on forms and in the manner prescribed by the department. The application shall include a certificate of eligibility issued by the energy, minerals and natural resources department pursuant to Subsection F of this section. If all of the requirements of this section have been complied with, the taxation and revenue department shall issue to the applicant a document granting the tax credit. The document shall be numbered for identification and declare its date of issuance and the amount of the tax credit allowed for the qualified donation made pursuant to this section.

          H. The tax credit represented by a document issued pursuant to Subsection G of this section for a conveyance made on or after January 1, 2008, or an increment of that tax credit, may be sold, exchanged or otherwise transferred and may be carried forward for a period of twenty taxable years following the taxable year in which the credit originated until fully expended. A tax credit or increment of a tax credit may only be transferred once. The credit may be transferred to any taxpayer. A taxpayer to whom a credit has been transferred may use the credit for the taxable year in which the transfer occurred and unused amounts may be carried forward to succeeding taxable years, but in no event may the transferred credit be used more than twenty years after it was originally issued.

          I. A tax credit issued pursuant to this section shall be transferred through a qualified intermediary. The qualified intermediary shall, by means of a sworn notarized statement, notify the taxation and revenue department of the transfer and of the date of the transfer within ten days of the transfer. Credits shall only be transferred in increments of ten thousand dollars ($10,000) or more. The qualified intermediary shall keep an account of the credits and have the authority to issue sub-numbers registered with the taxation and revenue department and traceable to the original credit.

          J. If a charitable deduction is claimed on the taxpayer's federal income tax for any contribution for which the credit provided by this section is claimed, the taxpayer's itemized deductions for New Mexico income tax shall be reduced by the amount of the deduction for the contribution in order to determine the New Mexico taxable income of the taxpayer.

          K. Beginning in 2014 and at six-year intervals following 2014, the department shall present a report on the tax credit provided pursuant to this section to the revenue stabilization and tax policy committee for review. The committee, with the aid of the department and the energy, minerals and natural resources department when warranted, shall determine if a need remains for the credit, if the credit is effectively being used for the purpose for which it was created and if the use of the credit is cost-effective. The credit may be proposed for repeal or amendment if it is found by the committee to be ineffective, more costly than is warranted by the purpose for which the credit was proposed or unused or otherwise no longer needed.

          [K. For the purposes of] L. As used in this section:

                (1) "qualified intermediary" does not include a person who has been previously convicted of a felony, who has had a professional license revoked, who is engaged in the practice defined in Section 61-28B-3 NMSA 1978 and who is identified in Section 61-29-2 NMSA 1978, and does not include any entity owned wholly or in part or employing any of the foregoing persons; and

                (2) "taxpayer" means a citizen or resident of the United States, a domestic partnership, a limited liability company, a domestic corporation, an estate, including a foreign estate, or a trust."

     SECTION 3. Section 7-2-18.11 NMSA 1978 (being Laws 2003, Chapter 400, Section 1) is amended to read:

     "7-2-18.11. JOB MENTORSHIP TAX CREDIT.--

          A. To encourage New Mexico businesses to hire youth participating in career preparation education programs, a taxpayer who files an individual New Mexico income tax return, who is not a dependent of another individual and who is an owner of a New Mexico business may claim a credit in an amount equal to fifty percent of gross wages paid to qualified students who are employed by the business during the taxable year for which the return is filed. The tax credit provided by this section may be referred to as the "job mentorship tax credit".

          B. A taxpayer who is an owner of a New Mexico business may claim the job mentorship tax credit for each taxable year in which the business employs one or more qualified students. The maximum aggregate credit allowable shall not exceed fifty percent of the gross wages paid to not more than ten qualified students employed by the business for up to three hundred twenty hours of employment of each qualified student in each taxable year for a maximum of three taxable years for each qualified student. In no event shall a taxpayer claim a credit in excess of twelve thousand dollars ($12,000) in any taxable year. The taxpayer shall certify that hiring the qualified student does not displace or replace a current employee.

          C. The department shall issue job mentorship tax credit certificates upon request to any accredited New Mexico secondary school that has a school-sanctioned career preparation education program. The maximum number of certificates that may be issued in a school year to any one school is equal to the number of qualified students in the school-sanctioned career preparation education program on October 15 of that school year, as certified by the school principal.

          D. A job mentorship tax credit certificate may be executed by a school principal with respect to a qualified student, and the executed certificate may be transferred to a New Mexico business that employs that student. By executing the certificate with respect to a student, the school principal certifies that the school has a school-sanctioned career preparation education program and the student is a qualified student.

          E. To claim the job mentorship tax credit, the taxpayer must submit with respect to each employee for whom the credit is claimed:

                (1) a properly executed job mentorship tax credit certificate;

                (2) information required by the secretary with respect to the employee's employment by the business during the taxable year for which the credit is claimed; and

                (3) information required by the secretary that the employee was not also employed in the same taxable year by another New Mexico business qualifying for and claiming a job mentorship tax credit for that employee pursuant to this section or the Corporate Income and Franchise Tax Act.

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

          G. 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 that would have been allowed on a joint return.

          H. A taxpayer who otherwise qualifies for and claims a job mentorship tax credit for employment of qualified students by a partnership, limited partnership, limited liability company, S corporation or other business association of which the taxpayer is a member may claim a credit only in proportion to [his] the taxpayer's interest in the partnership, limited partnership, limited liability company, S corporation or association. The total credit claimed by all members of the business shall not exceed the maximum credit allowable pursuant to Subsection B of this section.

          I. Beginning in 2014 and at six-year intervals following 2014, the department shall present a report on the job mentorship tax credit to the revenue stabilization and tax policy committee for review. The committee, with the aid of the department and the economic development department when warranted, shall determine if a need remains for the credit, if the credit is effectively being used for the purpose for which it was created and if the use of the credit is cost-effective. The credit may be proposed for repeal or amendment if it is found by the committee to be ineffective, more costly than is warranted by the purpose for which the credit was proposed or unused or otherwise no longer needed.

          [I.] J. As used in this section:

                (1) "career preparation education program" means a work-based learning or school-to-career program designed for secondary school students to create academic and career goals and objectives and find employment in a job meeting those goals and objectives;

                (2) "New Mexico business" means a partnership, limited partnership, limited liability company treated as a partnership for federal income tax purposes, S corporation or sole proprietorship that carries on a trade or business in New Mexico and that employs in New Mexico fewer than three hundred full-time employees at any one time during the taxable year; and

                (3) "qualified student" means an individual who is at least fourteen years of age but not more than twenty-one years of age who is attending full time an accredited New Mexico secondary school and who is a participant in a career preparation education program sanctioned by the secondary school."

     SECTION 4. Section 7-2-18.14 NMSA 1978 (being Laws 2006, Chapter 93, Section 1, as amended) is amended to read:

     "7-2-18.14. SOLAR MARKET DEVELOPMENT TAX CREDIT--RESIDENTIAL AND SMALL BUSINESS SOLAR THERMAL AND PHOTOVOLTAIC MARKET DEVELOPMENT TAX CREDIT.--

          A. Except as provided in Subsection C of this section, a taxpayer who files an individual New Mexico income

tax return for a taxable year beginning on or after

January 1, 2006 and who purchases and installs after

January 1, 2006 but before December 31, 2016 a solar thermal system or a photovoltaic system in a residence, business or agricultural enterprise in New Mexico owned by that taxpayer may apply for, and the department may allow, a solar market development tax credit of up to ten percent of the purchase and installation costs of the system.

          B. The total solar market development tax credit allowed for either a photovoltaic system or a solar thermal system shall not exceed nine thousand dollars ($9,000). The department shall allow solar market development tax credits only for solar thermal systems and photovoltaic systems certified by the energy, minerals and natural resources department.

          C. Solar market development tax credits may not be claimed or allowed for:

                (1) a heating system for a swimming pool or a hot tub; or

                (2) a commercial or industrial photovoltaic system other than an agricultural photovoltaic system on a farm or ranch that is not connected to an electric utility transmission or distribution system.

          D. The department may allow a maximum annual aggregate of:

                (1) two million dollars ($2,000,000) in solar market development tax credits for solar thermal systems; and

                (2) three million dollars ($3,000,000) in solar market development tax credits for photovoltaic systems.

          E. A portion of the solar market development tax credit that remains unused in a taxable year may be carried forward for a maximum of ten consecutive taxable years following the taxable year in which the credit originates until fully expended.

          F. Prior to July 1, 2006, the energy, minerals and natural resources department shall adopt rules establishing procedures to provide certification of solar thermal systems and photovoltaic systems for purposes of obtaining a solar market development tax credit. The rules shall address technical specifications and 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 may modify the specifications and requirements as necessary to maintain a high level of system quality and performance.

          G. Beginning in 2014 and at six-year intervals following 2014, the department shall present a report on the solar market development tax credit to the revenue stabilization and tax policy committee for review. The committee, with the aid of the department and the energy, minerals and natural resources department, shall determine if a need remains for the credit, if the credit is effectively being used for the purpose for which it was created and if the use of the credit is cost-effective. The credit may be proposed for repeal or amendment if it is found by the committee to be ineffective, more costly than is warranted by the purpose for which the credit was proposed or unused or otherwise no longer needed.

          [G.] H. As used in this section:

                (1) "photovoltaic system" means an energy system that collects or absorbs sunlight for conversion into electricity; and

                (2) "solar thermal system" means an energy system that collects or absorbs solar energy for conversion into heat for the purposes of space heating, space cooling or water heating."

     SECTION 5. Section 7-2-18.17 NMSA 1978 (being Laws 2007, Chapter 172, Section 1) is amended to read:

     "7-2-18.17. ANGEL INVESTMENT CREDIT.--

          A. A taxpayer who files a New Mexico income tax return, is not a dependent of another taxpayer, is an accredited investor and makes a qualified investment may claim a credit in an amount not to exceed twenty-five percent of not more than one hundred thousand dollars ($100,000) of the qualified investment. The tax credit provided in this section shall be known as the "angel investment credit".

          B. A taxpayer may claim the angel investment credit for not more than two qualified investments in a taxable year; provided that each investment is in a different qualified business. A taxpayer may claim the angel investment credit for qualified investments made in the same qualified business or successor of that business for not more than three taxable years. The angel investment credit shall not exceed twenty-five thousand dollars ($25,000) for each qualified investment by the taxpayer.

          C. A taxpayer may claim the angel investment credit no later than one year following the end of the calendar year in which the qualified investment was made; provided that a claim for the credit may not be made or allowed with respect to any investment made after December 31, 2011.  

          D. A taxpayer shall apply for certification of eligibility for the angel investment credit from the economic development department. Applications shall be considered in the order received. If the economic development department determines that the taxpayer is an accredited investor and the investment is a qualified investment, it shall issue a certificate of eligibility to the taxpayer, subject to the limitation in Subsection E of this section. The certificate shall be dated and shall include a calculation of the amount of the angel investment credit for which the taxpayer is eligible. The economic development department may issue rules governing the procedure for administering the provisions of this subsection.

          E. The economic development department may issue a certificate of eligibility pursuant to Subsection D of this section only if the total amount of angel investment credits represented by certificates of eligibility issued by the economic development department in any calendar year will not exceed seven hundred fifty thousand dollars ($750,000). If the applications for certificates of eligibility for angel investment credits represent an aggregate amount exceeding seven hundred fifty thousand dollars ($750,000) for any calendar year, certificates shall be issued in the order that the applications were received. The excess applications that would have been certified, but for the limit imposed by this subsection, shall be certified, subject to the same limit, in subsequent calendar years.

          F. The economic development department shall report annually to the legislative finance committee on the utilization and effectiveness of the angel investment credit. The report shall include, at a minimum: the number of accredited investors to whom certificates of eligibility were issued by the department in the previous year; the names of those investors; the amount of angel investment credit for which each investor was certified eligible; and the number and names of the businesses that the department has determined are qualified businesses for purposes of an investment by an accredited investor. The report shall also include an evaluation of the success of the angel investment credit as an incubator of new businesses in New Mexico and of the continued viability and operation in New Mexico of businesses in which investments eligible for the angel investment credit have been made.

          G. To claim the angel investment credit, the taxpayer must provide to the taxation and revenue department a certificate of eligibility issued by the economic development department pursuant to Subsection D of this section and any other information the taxation and revenue department may require to determine the amount of the tax credit due the taxpayer. If the requirements of this section have been complied with, the taxation and revenue department shall approve the claim for the credit.

          H. A taxpayer who otherwise qualifies for and claims a credit pursuant to this section for a qualified investment made by a partnership or other business association of which the taxpayer is a member may claim a credit only in proportion to the taxpayer's interest in the partnership or business association. The total credit claimed in the aggregate by all members of the partnership or business association in a taxable year with respect to a qualified investment shall not exceed twenty-five thousand dollars ($25,000).

          I. A husband and wife who file separate returns for a taxable year in which they could have filed a joint return may each claim one-half of the credit that would have been allowed on a joint return.

          J. The angel investment credit may only be deducted from the taxpayer's income tax liability. Any portion of the tax credit provided by this section that remains unused at the end of the taxpayer's taxable year may be carried forward for three consecutive years.

          K. Beginning in 2014 and at six-year intervals following 2014, the department shall present a report on the angel investment credit to the revenue stabilization and tax policy committee for review. The committee, with the aid of the department and the economic development department, shall determine if a need remains for the credit, if the credit is effectively being used for the purpose for which it was created and if the use of the credit is cost-effective. The credit may be proposed for repeal or amendment if it is found by the committee to be ineffective, more costly than is warranted by the purpose for which the credit was proposed or unused or otherwise no longer needed.

          [K.] L. As used in this section:

                (1) "accredited investor" means a person who is an accredited investor within the meaning of Rule 501 issued by the federal securities and exchange commission pursuant to the federal Securities Act of 1933, as amended;

                (2) "business" means a corporation, general partnership, limited partnership, limited liability company or other similar entity, but excludes an entity that is a government or a nonprofit organization designated as such by the federal government or any state;  

                (3) "equity" means common or preferred stock of a corporation, a partnership interest in a limited partnership or a membership interest in a limited liability company, including debt subject to an option in favor of the creditor to convert the debt into common or preferred stock, a partnership interest or a membership interest;

                (4) "high-technology research" means research:

                     (a) that is undertaken for the purpose of discovering information that is technological in nature and the application of which is intended to be useful in the development of a new or improved business component of the qualified business; and

                     (b) substantially all of the activities of which constitute elements of a process or experimentation related to a new or improved function, performance, reliability or quality, but not related to style, taste or cosmetic or seasonal design factors;

                (5) "manufacturing" means combining or processing components or materials to increase their value for sale in the ordinary course of business, but does not include:

                     (a) construction;

                     (b) farming;

                     (c) processing natural resources, including hydrocarbons; or 

                     (d) preparing meals for immediate consumption, on- or off-premises; 

                (6) "qualified business" means a business that:

                     (a) maintains its principal place of business in New Mexico; 

                     (b) engages in high-technology research or manufacturing activities in New Mexico;

                     (c) is not primarily engaged in or is not primarily organized as any of the following types of businesses: credit or finance services, including banks, savings and loan associations, credit unions, small loan companies or title loan companies; financial brokering or investment; professional services, including accounting, legal services, engineering and any other service the practice of which requires a license; insurance; real estate; construction or construction contracting; consulting or brokering; mining; wholesale or retail trade; providing utility service, including water, sewerage, electricity, natural gas, propane or butane; publishing, including publishing newspapers or other periodicals; broadcasting; or providing internet operating services; 

                     (d) has not issued securities registered pursuant to Section 6 of the federal Securities Act of 1933, as amended; has not issued securities traded on a national securities exchange; is not subject to reporting requirements of the federal Securities Exchange Act of 1934, as amended; and is not registered pursuant to the federal Investment Company Act of 1940, as amended, at the time of the investment;

                     (e) has one hundred or fewer employees calculated on a full-time-equivalent basis at the time of the investment; and

                     (f) has not had gross revenues in excess of five million dollars ($5,000,000) in any fiscal year ending on or before the date of the investment; and

                (7) "qualified investment" means a cash investment in a qualified business for equity, but does not include an investment by a taxpayer if the taxpayer, a member of the taxpayer's immediate family or an entity affiliated with the taxpayer receives compensation from the qualified business in exchange for services provided to the qualified business within one year of investment in the qualified business."

     SECTION 6. Section 7-2-18.18 NMSA 1978 (being Laws 2007, Chapter 204, Section 2) is amended to read:

     "7-2-18.18. RENEWABLE ENERGY PRODUCTION TAX CREDIT.--

          A. The tax credit provided in this section may be referred to as the "renewable energy production tax credit". The tax credit provided in this section may not be claimed with respect to the same electricity production for which a tax credit pursuant to Section 7-2A-19 NMSA 1978 has been claimed.

          B. A taxpayer who files an individual New Mexico income tax return and who is not a dependent of another taxpayer is eligible for the renewable energy production tax credit if the taxpayer:

                (1) holds title to a qualified energy generator that first produced electricity on or before January 1, 2018; or

                (2) leases property upon which a qualified energy generator operates from a county or municipality under authority of an industrial revenue bond and if the qualified energy generator first produced electricity on or before

January 1, 2018.

          C. The amount of the tax credit shall equal one cent ($.01) per kilowatt-hour of the first four hundred thousand megawatt-hours of electricity produced by the qualified energy generator in the taxable year using a wind- or biomass-derived qualified energy resource; provided that the total amount of tax credits claimed by all taxpayers for a single qualified energy generator in a taxable year using a wind- or biomass-derived qualified energy resource shall not exceed one cent ($.01) per kilowatt-hour of the first four hundred thousand megawatt-hours of electricity produced by the qualified energy generator.

          D. The amount of the tax credit for electricity produced by a qualified energy generator in the taxable year using a solar-light-derived or solar-heat-derived qualified energy resource shall be at the amounts specified in Paragraphs (1) through (10) of this subsection; provided that the total amount of tax credits claimed for a taxable year by all taxpayers for a single qualified energy generator using a solar-light-derived or solar-heat-derived qualified energy resource shall be limited to the first two hundred thousand

megawatt-hours of electricity produced by the qualified energy generator in the taxable year:

                (1) one and one-half cents ($.015) per kilowatt-hour in the first taxable year in which the qualified energy generator produces electricity using a solar-light-derived or solar-heat-derived qualified energy resource;

                (2) two cents ($.02) per kilowatt-hour in the second taxable year in which the qualified energy generator produces electricity using a solar-light-derived or

solar-heat-derived qualified energy resource;

                (3) two and one-half cents ($.025) per kilowatt-hour in the third taxable year in which the qualified

energy generator produces electricity using a solar-light-derived or solar-heat-derived qualified energy resource;

                (4) three cents ($.03) per kilowatt-hour in the fourth taxable year in which the qualified energy generator produces electricity using a solar-light-derived or solar-heat- derived qualified energy resource;

                (5) three and one-half cents ($.035) per kilowatt-hour in the fifth taxable year in which the qualified energy generator produces electricity using a solar-light- derived or solar-heat-derived qualified energy resource;

                (6) four cents ($.04) per kilowatt-hour in the sixth taxable year in which the qualified energy generator produces electricity using a solar-light-derived or solar-heat-derived qualified energy resource;

                (7) three and one-half cents ($.035) per kilowatt-hour in the seventh taxable year in which the qualified energy generator produces electricity using a solar-light- derived or solar-heat-derived qualified energy resource;

                (8) three cents ($.03) per kilowatt-hour in the eighth taxable year in which the qualified energy generator produces electricity using a solar-light-derived or solar-heat-derived qualified energy resource;

                (9) two and one-half cents ($.025) per kilowatt-hour in the ninth taxable year in which the qualified energy generator produces electricity using a solar-light- derived or solar-heat-derived qualified energy resource; and

                (10) two cents ($.02) per kilowatt-hour in the tenth taxable year in which the qualified energy generator produces electricity using a solar-light-derived or solar-heat- derived qualified energy resource.

          E. A taxpayer eligible for a renewable energy production tax credit pursuant to Subsection B of this section shall be eligible for the renewable energy production tax credit for ten consecutive years, beginning on the date the qualified energy generator begins producing electricity.

          F. As used in this section:

                (1) "biomass" means organic material that is available on a renewable or recurring basis, including:

                     (a) forest-related materials, including mill residues, logging residues, forest thinnings, slash, brush, low-commercial-value materials or undesirable species, salt cedar and other phreatophyte or woody vegetation removed from river basins or watersheds and woody material harvested for the purpose of forest fire fuel reduction or forest health and watershed improvement;

                     (b) agricultural-related materials, including orchard trees, vineyard, grain or crop residues, including straws and stover, aquatic plants and agricultural processed co-products and waste products, including fats, oils, greases, whey and lactose;

                     (c) animal waste, including manure and slaughterhouse and other processing waste;

                     (d) solid woody waste materials, including landscape or right-of-way tree trimmings, rangeland maintenance residues, waste pallets, crates and manufacturing, construction and demolition wood wastes, excluding pressure-treated, chemically treated or painted wood wastes and wood contaminated with plastic;

                     (e) crops and trees planted for the purpose of being used to produce energy;

                     (f) landfill gas, wastewater treatment gas and biosolids, including organic waste byproducts generated during the wastewater treatment process; and

                     (g) segregated municipal solid waste, excluding tires and medical and hazardous waste;

                (2) "qualified energy generator" means a facility with at least one megawatt generating capacity located in New Mexico that produces electricity using a qualified energy resource and that sells that electricity to an unrelated person; and

                (3) "qualified energy resource" means a resource that generates electrical energy by means of a fluidized bed technology or similar low-emissions technology or a zero-emissions generation technology that has substantial long-term production potential and that uses only the following energy sources:

                     (a) solar light;

                     (b) solar heat;

                     (c) wind; or

                     (d) biomass.

          G. A person that holds title to a facility generating electricity from a qualified energy resource or a person that leases such a facility from a county or municipality pursuant to an industrial revenue bond may request certification of eligibility for the renewable energy production tax credit from the energy, minerals and natural resources department, which shall determine if the facility is a qualified energy generator. The energy, minerals and natural resources department may certify the eligibility of an energy generator only if the total amount of electricity that may be produced annually by all qualified energy generators that are certified pursuant to this section and pursuant to Section 7-2A-19 NMSA 1978 will not exceed a total of two million megawatt-hours plus an additional five hundred thousand megawatt-hours produced by qualified energy generators using a solar-light-derived or solar-heat-derived qualified energy resource. Applications shall be considered in the order received. The energy, minerals and natural resources department may estimate the annual

power-generating potential of a generating facility for the purposes of this section. The energy, minerals and natural resources department shall issue a certificate to the applicant stating whether the facility is an eligible qualified energy generator and the estimated annual production potential of the generating facility, which shall be the limit of that facility's energy production eligible for the tax credit for the taxable year. The energy, minerals and natural resources department may issue rules governing the procedure for administering the provisions of this subsection and shall report annually to the appropriate interim legislative committee information that will allow the legislative committee to analyze the effectiveness of the renewable energy production tax credit, including the identity of qualified energy generators, the energy production means used, the amount of energy produced by those qualified energy generators and whether any applications could not be approved due to program limits.

          H. A taxpayer may be allocated all or a portion of the right to claim a renewable energy production tax credit without regard to proportional ownership interest if:

                (1) the taxpayer owns an interest in a business entity that is taxed for federal income tax purposes as a partnership;

                (2) the business entity:

                     (a) would qualify for the renewable energy production tax credit pursuant to Paragraph (1) or (2) of Subsection B of this section;

                     (b) owns an interest in a business entity that is also taxed for federal income tax purposes as a partnership and that would qualify for the renewable energy production tax credit pursuant to Paragraph (1) or (2) of Subsection B of this section; or

                     (c) owns, through one or more intermediate business entities that are each taxed for federal income tax purposes as a partnership, an interest in the business entity described in Subparagraph (b) of this paragraph;

                (3) the taxpayer and all other taxpayers allocated a right to claim the renewable energy production tax credit pursuant to this subsection own collectively at least a five percent interest in a qualified energy generator;

                (4) the business entity provides notice of the allocation and the taxpayer's interest to the energy, minerals and natural resources department on forms prescribed by that department; and

                (5) the energy, minerals and natural resources department certifies the allocation in writing to the taxpayer.

          I. Upon receipt of notice of an allocation of the right to claim all or a portion of the renewable energy production tax credit, the energy, minerals and natural resources department shall promptly certify the allocation in writing to the recipient of the allocation.

          J. 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 that would have been allowed on a joint return.

          K. A taxpayer may claim the renewable energy production tax credit by submitting to the taxation and revenue department the certificate issued by the energy, minerals and natural resources department, pursuant to Subsection G or H of this section, documentation showing the taxpayer's interest in the facility, documentation of the amount of electricity produced by the facility in the taxable year and any other information the taxation and revenue department may require to determine the amount of the tax credit due the taxpayer.

          L. If the requirements of this section have been complied with, the department shall approve the renewable energy production tax credit. The credit may be deducted from a taxpayer's New Mexico income tax liability for the taxable year for which the credit is claimed. If the amount of tax credit exceeds the taxpayer's income tax liability for the taxable year:

                (1) the excess may be carried forward for a period of five taxable years; or

                (2) if the tax credit was issued with respect to a qualified energy generator that first produced electricity using a qualified energy resource on or after October 1, 2007, the excess shall be refunded to the taxpayer.

           M. Once a taxpayer has been granted a renewable energy production tax credit for a given facility, that taxpayer shall be allowed to retain the facility's original date of application for tax credits for that facility until either the facility goes out of production for more than six consecutive months in a year or until the facility's ten-year eligibility has expired.

          N. Beginning in 2014 and at six-year intervals following 2014, the department shall present a report on the renewable energy production tax credit to the revenue stabilization and tax policy committee for review. The committee, with the aid of the department and the energy, minerals and natural resources department, shall determine if a need remains for the credit, if the credit is effectively being used for the purpose for which it was created and if the use of the credit is cost-effective. The credit may be proposed for repeal or amendment if it is found by the committee to be ineffective, more costly than is warranted by the purpose for which the credit was proposed or unused or otherwise no longer needed."

     SECTION 7. Section 7-2-18.19 NMSA 1978 (being Laws 2007, Chapter 204, Section 3, as amended) 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, 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 be granted a sustainable building tax credit by the department if the taxpayer 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 amount of qualified occupied square footage, as indicated on the following chart:

Rating System/Level        Qualified           Tax Credit                            Occupied             per Square

                           Square Footage       Foot

LEED-H Silver or Build     First 2,000              $5.00

Green NM Silver            Next 1,000               $2.50

LEED-H Gold or Build       First 2,000              $6.85

Green NM Gold              Next 1,000               $3.40

LEED-H Platinum or Build   First 2,000              $9.00

Green NM Emerald           Next 1,000               $4.45

EPA ENERGY STAR

Manufactured Housing       Up to 3,000              $3.00.

          E. A person that is a building owner may apply for 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 building owner meets the requirements of this 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, the energy, minerals and natural resources department may issue a certificate of eligibility to the 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 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 sustainable residential building 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 sustainable residential building at the time the certification level for the building is awarded; or

                (2) the subsequent purchaser of a sustainable residential 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 for 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 under the aggregate annual limit for sustainable commercial buildings to building owners of multifamily dwelling units 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 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 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 for which the building owner is eligible.

          I. If the requirements of this section have been complied with, the department shall issue to the 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, if applicable, 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 for 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 for 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. Beginning in 2014 and at six-year intervals following 2014, the department shall present a report on the sustainable building tax credit to the revenue stabilization and tax policy committee for review. The committee, with the aid of the department and the energy, minerals and natural resources department, shall determine if a need remains for the credit, if the credit is effectively being used for the purpose for which it was created and if the use of the credit is cost-effective. The credit may be proposed for repeal or amendment if it is found by the committee to be ineffective, more costly than is warranted by the purpose for which the credit was proposed or unused or otherwise no longer needed.

          [N.] O. 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) "manufactured housing" means a multisectioned home that is:

                     (a) a manufactured home or modular home;

                     (b) a single-family dwelling with a heated area of at least thirty-six feet by twenty-four feet and a total area of at least eight hundred sixty-four square feet;

                     (c) 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 New Mexico construction codes up to the date of the unit's construction; and

                     (d) installed consistent with the Manufactured Housing Act and rules adopted pursuant to that act relating to permanent foundations;

                (12) "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;

                (13) "person" does not include state, local government, public school district or tribal agencies;

                (14) "sustainable building" means either a sustainable commercial building or a sustainable residential building;

                (15) "sustainable commercial building" means 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;

                (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 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 silver 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 multifamily dwelling unit, as registered and certified under the LEED-H or build green New Mexico 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 silver 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 that is ENERGY STAR-qualified by the United States environmental protection agency; and

                (17) "tribal" means of, belonging to or created by a federally recognized Indian nation, tribe or pueblo."

     SECTION 8. Section 7-2-18.21 NMSA 1978 (being Laws 2007, Chapter 204, Section 7) is amended to read:

     "7-2-18.21. CREDIT--BLENDED BIODIESEL FUEL.--

          A. A taxpayer who is liable for payment of the special fuel excise tax pursuant to Subsections A through D of Section 7-16A-2.1 NMSA 1978 and who files a New Mexico income tax return is eligible to claim a credit against income tax liability for each gallon of blended biodiesel fuel on which that person paid the special fuel excise tax in the taxable year, or would have paid the special fuel excise tax in the taxable year but for the deductions allowed pursuant to Subsections B through F of Section 7-16A-10 NMSA 1978 or the treaty exemption for north Atlantic treaty organization use. The credit shall be in the following amounts for the following periods:

                (1) from January 1, 2007 until December 31, 2010, at a rate of three cents ($.03) per gallon;

                (2) from January 1, 2011 until December 31, 2011, at a rate of two cents ($.02) per gallon; and

                (3) from January 1, 2012 until December 31, 2012, at a rate of one cent ($.01) per gallon.

          B. The tax credit provided by this section may not be claimed with respect to the same blended biodiesel fuel for which a credit has been claimed pursuant to the Corporate Income and Franchise Tax Act or for which a credit or refund has been claimed pursuant to Section 7-16A-13 NMSA 1978.

          C. A taxpayer who otherwise qualifies for and claims a credit pursuant to this section for blended biodiesel fuel on which special fuel excise tax has been paid by a partnership or other business association of which the taxpayer is a member may claim a credit only in proportion to the taxpayer's interest in the partnership or business association. The total credit claimed in the aggregate by all members of the partnership or business association shall not exceed the amount of credit allowed pursuant to Subsection A of this section.

          D. 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 that would have been allowed on a joint return.

          E. The tax credit provided by this section may only be applied against the income tax liability of the person who paid the special fuel excise tax on the blended biodiesel fuel with respect to which the credit is provided, or who would have paid the special fuel excise tax but for the deductions allowed pursuant to Subsections B through F of Section 7-16A-10 NMSA 1978 or the treaty exemption for north Atlantic treaty organization use. If the credit exceeds the person's income tax liability for the taxable year in which the credit is granted, the credit may be carried forward for five years.

          F. A taxpayer claiming a credit pursuant to this section shall provide documentation of eligibility in form and content as determined by the department.

          G. Beginning in 2014 and at six-year intervals following 2014, the department shall present a report on the tax credit provided pursuant to this section to the revenue stabilization and tax policy committee for review. The committee, with the aid of the department and the energy, minerals and natural resources department, shall determine if a need remains for the credit, if the credit is effectively being used for the purpose for which it was created and if the use of the credit is cost-effective. The credit may be proposed for repeal or amendment if it is found by the committee to be ineffective, more costly than is warranted by the purpose for which the credit was proposed or unused or otherwise no longer needed.

          [G.] H. For the purposes of this section:

                (1) "biodiesel" means renewable, biodegradable, monoalkyl ester combustible liquid fuel that is derived from agricultural plant oils or animal fats and that meets American society for testing and materials D 6751 standard specification for biodiesel B100 blend stock for distillate fuels;

                (2) "blended biodiesel fuel" means a diesel fuel that contains at least two percent biodiesel; and

                (3) "diesel fuel" means any diesel-engine fuel used for the generation of power to propel a motor vehicle."

     SECTION 9. Section 7-2-18.22 NMSA 1978 (being Laws 2007, Chapter 361, Section 2) is amended to read:

     "7-2-18.22. TAX CREDIT--RURAL HEALTH CARE PRACTITIONER TAX CREDIT.--

          A. A taxpayer who files an individual New Mexico tax return, who is not a dependent of another individual, who is an eligible health care practitioner and who has provided health care services in New Mexico in a rural health care underserved area in a taxable year may claim a credit against the tax liability imposed by the Income Tax Act. The credit provided in this section may be referred to as the "rural health care practitioner tax credit".

          B. The rural health care practitioner tax credit may be claimed and allowed in an amount that shall not exceed five thousand dollars ($5,000) for all eligible physicians, osteopathic physicians, dentists, clinical psychologists, podiatrists and optometrists who qualify pursuant to the provisions of this section, except the credit shall not exceed three thousand dollars ($3,000) for all eligible dental hygienists, physician assistants, certified nurse-midwives, certified registered nurse anesthetists, certified nurse practitioners and clinical nurse specialists.

          C. To qualify for the rural health care practitioner tax credit, an eligible health care practitioner shall have provided health care during a taxable year for at least two thousand eighty hours at a practice site located in an approved, rural health care underserved area. An eligible rural health care practitioner who provided health care services for at least one thousand forty hours but less than two thousand eighty hours at a practice site located in an approved rural health care underserved area during a taxable year is eligible for one-half of the credit amount.

          D. Before an eligible health care practitioner may claim the rural health care practitioner tax credit, the practitioner shall submit an application to the department of health that describes the practitioner's clinical practice and contains additional information that the department of health may require. The department of health shall determine whether an eligible health care practitioner qualifies for the rural health care practitioner tax credit and shall issue a certificate to each qualifying eligible health care practitioner. The department of health shall provide the taxation and revenue department appropriate information for all eligible health care practitioners to whom certificates are issued.

          E. A taxpayer claiming the credit provided by this section shall submit a copy of the certificate issued by the department of health with the taxpayer's New Mexico income tax return for the taxable year. If the amount of the credit claimed exceeds a taxpayer's tax liability for the taxable year in which the credit is being claimed, the excess may be carried forward for three consecutive taxable years.

          F. Beginning in 2014 and at six-year intervals following 2014, the department shall present a report on the rural health care practitioner credit to the revenue stabilization and tax policy committee for review. The committee, with the aid of the department and the department of health, shall determine if a need remains for the credit, if the credit is effectively being used for the purpose for which it was created and if the use of the credit is cost- effective. The credit may be proposed for repeal or amendment if it is found by the committee to be ineffective, more costly than is warranted by the purpose for which the credit was proposed or unused or otherwise no longer needed.

          [F.] G. As used in this section:

                (1) "eligible health care practitioner" means:

                     (a) a certified nurse-midwife licensed by the board of nursing as a registered nurse and licensed by the public health division of the department of health to practice nurse-midwifery as a certified nurse-midwife;

                     (b) a dentist or dental hygienist licensed pursuant to the Dental Health Care Act;

                     (c) an optometrist licensed pursuant to the provisions of the Optometry Act;

                     (d) an osteopathic physician licensed pursuant to the provisions of Chapter 61, Article 10 NMSA 1978 or an osteopathic physician assistant licensed pursuant to the provisions of the Osteopathic Physicians' Assistants Act;

                     (e) a physician or physician assistant licensed pursuant to the provisions of Chapter 61, Article 6 NMSA 1978;

                     (f) a podiatrist licensed pursuant to the provisions of the Podiatry Act;

                     (g) a clinical psychologist licensed pursuant to the provisions of the Professional Psychologist Act; and 

                     (h) a registered nurse in advanced practice who has been prepared through additional formal education as provided in Sections 61-3-23.2 through 61-3-23.4 NMSA 1978 to function beyond the scope of practice of professional registered nursing, including certified nurse practitioners, certified registered nurse anesthetists and clinical nurse specialists;

                (2) "health care underserved area" means a geographic area or practice location in which it has been determined by the department of health, through the use of indices and other standards set by the department of health, that sufficient health care services are not being provided;

                (3) "practice site" means a private practice, public health clinic, hospital, public or private nonprofit primary care clinic or other health care service location in a health care underserved area; and

                (4) "rural" means an area or location identified by the department of health as falling outside of an urban area."

     SECTION 10. 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 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 and who purchases and installs after January 1, 2010 but before December 31, 2020 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 tax credit". The total geothermal ground-coupled heat pump tax credit allowed to a taxpayer shall not exceed nine thousand dollars ($9,000). The department shall allow a geothermal ground-coupled heat pump tax credit only for geothermal ground-coupled heat pumps certified by the energy, minerals and natural resources department.

          B. A portion of the geothermal ground-coupled heat pump tax credit that remains unused in a 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.  

          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 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. 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 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 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. Beginning in 2014 and at six-year intervals following 2014, the department shall present a report on the geothermal ground-coupled heat pump tax credit to the revenue stabilization and tax policy committee for review. The committee, with the aid of the department and the energy, minerals and natural resources department, shall determine if a need remains for the credit, if the credit is effectively being used for the purpose for which it was created and if the use of the credit is cost-effective. The credit may be proposed for repeal or amendment if it is found by the committee to be ineffective, more costly than is warranted by the purpose for which the credit was proposed or unused or otherwise no longer needed.

          [G.] H. 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; 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 11. Section 7-2A-8.6 NMSA 1978 (being Laws 1984, Chapter 34, Section 2, as amended) is amended to read:

     "7-2A-8.6. CREDIT FOR PRESERVATION OF CULTURAL PROPERTY--CORPORATE INCOME TAX CREDIT.--

          A. Tax credits for the preservation of cultural property may be claimed as follows:

                (1) to encourage the restoration, rehabilitation and preservation of cultural properties, a taxpayer that files a corporate income tax return and that is the owner of a cultural property listed on the official New Mexico register of cultural properties, with its consent, may claim a credit not to exceed twenty-five thousand dollars ($25,000) in an amount equal to one-half of the cost of restoration, rehabilitation or preservation of the cultural property; or

                (2) if a cultural property, whose owner may otherwise claim the credit set forth in Paragraph (1) of this subsection is also located within an arts and cultural district designated by the state or a municipality pursuant to the Arts and Cultural District Act, the owner of that cultural property may claim a credit not to exceed fifty thousand dollars ($50,000), including any credit claimed pursuant to Paragraph (1) of this subsection, in an amount equal to one-half of the cost of restoration, rehabilitation or preservation of the cultural property.

          B. The taxpayer may claim the credit if:

                (1) it submitted a plan and specifications for restoration, rehabilitation or preservation to the committee and received approval from the committee for the plan and specifications prior to commencement of the restoration, rehabilitation or preservation;

                (2) it received certification from the committee after completing the restoration, rehabilitation or preservation, or committee-approved phase, that it conformed to the plan and specifications and preserved and maintained those qualities of the property that made it eligible for inclusion in the official register; and

                (3) the project is completed within twenty-four months of the date the project is approved by the committee in accordance with Paragraph (1) of this subsection.

          C. A taxpayer may claim the credit provided in this section for each taxable year in which preservation, restoration or rehabilitation is carried out. Claims for the credit provided in this section shall be limited to three consecutive years, and the maximum aggregate credit allowable shall not exceed twenty-five thousand dollars ($25,000) if governed by Paragraph (1) of Subsection A of this section, or fifty thousand dollars ($50,000) if governed by Paragraph (2) of Subsection A of this section, for any single restoration, rehabilitation or preservation project certified by the committee for any cultural property listed on the official New Mexico register. No single project may extend beyond a period of more than two years.

          D. A taxpayer [who] that otherwise qualifies and claims a credit on a restoration, rehabilitation or preservation project on property owned by a partnership of which the taxpayer is a member may claim a credit only in proportion to the taxpayer's interest in the partnership. The total credit claimed by all members of the partnership shall not exceed twenty-five thousand dollars ($25,000) if governed by Paragraph (1) of Subsection A of this section, or fifty thousand dollars ($50,000) if governed by Paragraph (2) of Subsection A of this section, in the aggregate for any single restoration, preservation or rehabilitation project for any cultural property listed on the official New Mexico register approved by the committee.

          E. The credit provided in this section may only be deducted from the taxpayer's corporate income tax liability. Any portion of the maximum tax credit provided by this section that remains unused at the end of the taxpayer's taxable year may be carried forward for four consecutive years; provided, however, the total tax credits claimed under this section shall not exceed twenty-five thousand dollars ($25,000) if governed by Paragraph (1) of Subsection A of this section, or fifty thousand dollars ($50,000) if governed by Paragraph (2) of Subsection A of this section, for any single restoration, rehabilitation or preservation project for any cultural property listed on the official New Mexico register.

          F. The historic preservation division shall promulgate regulations for the implementation of this section.

          G. Beginning in 2014 and at six-year intervals following 2014, the department shall present a report on the tax credit provided pursuant to this section to the revenue stabilization and tax policy committee for review. The revenue stabilization and tax policy committee, with the aid of the department and the cultural affairs department, shall determine if a need remains for the credit, if the credit is effectively being used for the purpose for which it was created and if the use of the credit is cost-effective. The credit may be proposed for repeal or amendment if it is found by the revenue stabilization and tax policy committee to be ineffective, more costly than is warranted by the purpose for which the credit was proposed or unused or otherwise no longer needed.

          [G.] H. As used in this section:

                (1) "committee" means the cultural properties review committee created in Section 18-6-4 NMSA 1978; and

                (2) "historic preservation division" means the historic preservation division of the cultural affairs department created in Section 18-6-8 NMSA 1978."

     SECTION 12. Section 7-2A-8.9 NMSA 1978 (being Laws 2003, Chapter 331, Section 8, as amended) is amended to read:

     "7-2A-8.9. TAX CREDIT--CERTAIN CONVEYANCES OF REAL PROPERTY.--

          A. There shall be allowed as a credit against the tax liability imposed by the Corporate Income and Franchise Tax Act an amount equal to fifty percent of the fair market value of land or interest in land that is conveyed for the purpose of open space, natural resource or biodiversity conservation, agricultural preservation or watershed or historic preservation as an unconditional donation in perpetuity by the landowner or taxpayer to a public or private conservation agency eligible to hold the land and interests therein for conservation or preservation purposes. The fair market value of qualified donations made pursuant to this section shall be substantiated by a "qualified appraisal" prepared by a "qualified appraiser", as those terms are defined under applicable federal laws and regulations governing charitable contributions.

          B. The amount of the credit that may be claimed by a taxpayer shall not exceed one hundred thousand dollars ($100,000) for a conveyance made prior to January 1, 2008 and shall not exceed two hundred fifty thousand dollars ($250,000) for a conveyance made on or after that date. In addition, in a taxable year, the credit used may not exceed the amount of corporate income tax otherwise due. A portion of the credit that is unused in a taxable year may be carried over for a maximum of twenty consecutive taxable years following the taxable year in which the credit originated until fully expended. A taxpayer may claim only one tax credit per taxable year.

          C. Qualified donations shall include the conveyance in perpetuity of a fee interest in real property or a less-than-fee interest in real property, such as a conservation restriction, preservation restriction, agricultural preservation restriction or watershed preservation restriction, pursuant to the Land Use Easement Act; provided that the less-than-fee interest qualifies as a charitable contribution deduction under Section 170(h) of the Internal Revenue Code. Dedications of land for open space for the purpose of fulfilling density requirements to obtain subdivision or building permits shall not be considered as qualified donations pursuant to the Land Conservation Incentives Act.

          D. Qualified donations shall be eligible for the tax credit if the donations are made to the state of New Mexico, a political subdivision thereof or a charitable organization described in Section 501(c)(3) of the Internal Revenue Code and that meets the requirements of Section 170(h)(3) of that code.

           E. To be eligible for treatment as qualified donations under this section, land or interests in lands must be certified by the secretary of energy, minerals and natural resources as fulfilling the purposes as set forth in Section

[5-9-2] 75-9-2 NMSA 1978. The use and protection of the lands, or interests therein, for open space, natural area protection, biodiversity habitat conservation, land preservation, agricultural preservation, historic preservation or similar use or purpose of the property shall be assured in perpetuity.

          F. A taxpayer may apply for certification of eligibility for the tax credit provided by this section from the energy, minerals and natural resources department. If the energy, minerals and natural resources department determines that the application meets the requirements of this section and that the property conveyed will not adversely affect the property rights of contiguous landowners, it shall issue a certificate of eligibility to the taxpayer, which shall include a calculation of the maximum amount of tax credit for which the taxpayer would be eligible. The energy, minerals and natural resources department may issue rules governing the procedure for administering the provisions of this subsection.

          G. To receive a credit pursuant to this section, a person shall apply to the taxation and revenue department on forms and in the manner prescribed by the department. The application shall include a certificate of eligibility issued by the energy, minerals and natural resources department pursuant to Subsection F of this section. If all of the requirements of this section have been complied with, the taxation and revenue department shall issue to the applicant a document granting the tax credit. The document shall be numbered for identification and declare its date of issuance and the amount of the tax credit allowed for the qualified donation made pursuant to this section.

          H. The tax credit represented by a document issued pursuant to Subsection G of this section for a conveyance made on or after January 1, 2008, or an increment of that tax credit, may be sold, exchanged or otherwise transferred and may be carried forward for a period of twenty taxable years following the taxable year in which the credit originated until fully expended. A tax credit or increment of a tax credit may only be transferred once. The credit may be transferred to any taxpayer. A taxpayer to whom a credit has been transferred may use the credit for the taxable year in which the transfer occurred and unused amounts may be carried forward to succeeding taxable years, but in no event may the transferred credit be used more than twenty years after it was originally issued.

          I. A tax credit issued pursuant to this section shall be transferred through a qualified intermediary. The qualified intermediary shall, by means of a sworn notarized statement, notify the taxation and revenue department of the transfer and of the date of the transfer within ten days of the transfer. Credits shall only be transferred in increments of ten thousand dollars ($10,000) or more. The qualified intermediary shall keep an account of the credits and have the authority to issue sub-numbers registered with the taxation and revenue department and traceable to the original credit.

          J. If a charitable deduction is claimed on the taxpayer's federal income tax for any contribution for which the credit provided by this section is claimed, the taxpayer's itemized deductions for New Mexico income tax shall be reduced by the amount of the deduction for the contribution in order to determine the New Mexico taxable income of the taxpayer.

          K. Beginning in 2014 and at six-year intervals following 2014, the department shall present a report on the tax credit provided pursuant to this section to the revenue stabilization and tax policy committee for review. The committee, with the aid of the department and the energy, minerals and natural resources department, shall determine if a need remains for the credit, if the credit is effectively being used for the purpose for which it was created and if the use of the credit is cost-effective. The credit may be proposed for repeal or amendment if it is found by the committee to be ineffective, more costly than is warranted by the purpose for which the credit was proposed or unused or otherwise no longer needed.

          [K.] L. For the purposes of this section:

                (1) "qualified intermediary" does not include a person who has been previously convicted of a felony, who has had a professional license revoked, who is engaged in the practice defined in Section 61-28B-3 NMSA 1978 and who is identified in Section 61-29-2 NMSA 1978, and does not include any entity owned wholly or in part or employing any of the foregoing persons; and

                (2) "taxpayer" means a citizen or resident of the United States, a domestic partnership, a limited liability company, a domestic corporation, an estate, including a foreign estate, or a trust."

     SECTION 13. Section 7-2A-14 NMSA 1978 (being Laws 1983, Chapter 218, Section 1, as amended) is amended to read:

     "7-2A-14. CORPORATE-SUPPORTED CHILD CARE--CREDITS ALLOWED.--

          A. A taxpayer that pays for child care services in New Mexico for dependent children of an employee of the taxpayer during the employee's hours of employment may claim a credit against the corporate income tax imposed pursuant to the Corporate Income and Franchise Tax Act in an amount equal to thirty percent of the total expenses, net of any reimbursements, for child care services incurred and paid by the taxpayer in the taxable year.

          B. A taxpayer that operates a child care facility in New Mexico used primarily by the dependent children of the taxpayer's employees may also claim a credit against the corporate income tax imposed pursuant to the Corporate Income and Franchise Tax Act in an amount equal to thirty percent of the net cost of operating the child care facility for the taxable year. If two or more taxpayers share in the cost of operating a child care facility primarily for the dependent children of the taxpayers' employees, each taxpayer shall be allowed a credit in relation to the taxpayer's share of the cost of operating the child care facility. Each taxpayer's share of the tax credit shall be determined by dividing the employer's share of the net cost of operating the child care facility by the number of children served and multiplying the result by the number of the taxpayer's employees' children served. The credit allowed pursuant to this subsection may be taken only if the child care facility is operated under the authority of a license issued pursuant to the Public Health Act and is operated without profit by the taxpayer. For the purposes of this section, the term "net cost" means the cost of operating a child care facility less any amounts collected as fees for use of the facility, any federal tax credits with respect to the facility or its operation and any other payment or reimbursement from any other source other than the credit provided by this section.

          C. Beginning in 2014 and at six-year intervals following 2014, the department shall present a report on the tax credit provided pursuant to this section to the revenue stabilization and tax policy committee for review. The committee, with the aid of the department and the economic development department and the children, youth and families department, shall determine if a need remains for the credit, if the credit is effectively being used for the purpose for which it was created and if the use of the credit is cost- effective. The credit may be proposed for repeal or amendment if it is found by the committee to be ineffective, more costly than is warranted by the purpose for which the credit was proposed or unused or otherwise no longer needed.

          [C.] D. For the purposes of this section, "dependent children" means children under twelve years of age.

          [D.] E. The credits provided for by Subsections A and B of this section may only be deducted from the taxpayer's corporate income tax liability for the taxable year in which the expenditures occurred. The credit may not exceed thirty thousand dollars ($30,000) in any taxable year. If the credit amount exceeds the corporate income tax liability, the excess may be carried forward for three consecutive years; provided that in no event shall the annual credit amount exceed thirty thousand dollars ($30,000)."

     SECTION 14. Section 7-2A-17.1 NMSA 1978 (being Laws 2003, Chapter 400, Section 2) is amended to read:

     "7-2A-17.1. JOB MENTORSHIP TAX CREDIT.--

          A. To encourage New Mexico businesses to hire youth participating in career preparation education programs, a taxpayer [who] that files [an individual] a New Mexico corporate income tax return [who is not a dependent of another individual] and [who] that is an owner of a New Mexico business may claim a credit in an amount equal to fifty percent of gross wages paid to qualified students who are employed by the business during the taxable year for which the return is filed. The tax credit provided by this section may be referred to as the "job mentorship tax credit".

          B. A taxpayer [who] that is an owner of a New Mexico business may claim the job mentorship tax credit for each taxable year in which the business employs one or more qualified students. The maximum aggregate credit allowable shall not exceed fifty percent of the gross wages paid to not more than ten qualified students employed by the business for up to three hundred twenty hours of employment of each qualified student in each taxable year for a maximum of three taxable years for each qualified student. In no event shall a taxpayer claim a credit in excess of twelve thousand dollars ($12,000) in any taxable year. The taxpayer shall certify that hiring the qualified student does not displace or replace a current employee.

          C. The department shall issue job mentorship tax credit certificates upon request to any accredited New Mexico secondary school that has a school-sanctioned career preparation education program. The maximum number of certificates that may be issued in a school year to any one school is equal to the number of qualified students in the school-sanctioned career preparation education program on October 15 of that school year, as certified by the school principal.

          D. A job mentorship tax credit certificate may be executed by a school principal with respect to a qualified student, and the executed certificate may be transferred to a New Mexico business that employs that student. By executing the certificate with respect to a student, the school principal certifies that the school has a school-sanctioned career preparation education program and the student is a qualified student.

          E. To claim the job mentorship tax credit, the taxpayer must submit with respect to each employee for whom the credit is claimed:

                (1) a properly executed job mentorship tax credit certificate;

                (2) information required by the secretary with respect to the employee's employment by the business during the taxable year for which the credit is claimed; and

                (3) information required by the secretary that the employee was not also employed in the same taxable year by another New Mexico business qualifying for and claiming a job mentorship tax credit for that employee pursuant to this section or the [Corporate] Income [and Franchise] Tax Act.

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

          G. Beginning in 2014 and at six-year intervals following 2014, the department shall present a report on the job mentorship tax credit provided pursuant to this section to the revenue stabilization and tax policy committee for review. The committee, with the aid of the department and the economic development department, shall determine if a need remains for the credit, if the credit is effectively being used for the purpose for which it was created and if the use of the credit is cost-effective. The credit may be proposed for repeal or amendment if it is found by the committee to be ineffective, more costly than is warranted by the purpose for which the credit was proposed or unused or otherwise no longer needed.

          [G. 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 that would have been allowed on a joint return.

          H. A taxpayer who otherwise qualifies for and claims a job mentorship tax credit for employment of qualified students by a partnership, limited partnership, limited liability company, S corporation or other business association of which the taxpayer is a member may claim a credit only in proportion to his interest in the partnership, limited partnership, limited liability company, S corporation or association. The total credit claimed by all members of the business shall not exceed the maximum credit allowable pursuant to Subsection B of this section.

          I.] H. As used in this section:

                (1) "career preparation education program" means a work-based learning or school-to-career program designed for secondary school students to create academic and career goals and objectives and find employment in a job meeting those goals and objectives;

                (2) "New Mexico business" means a [partnership, limited partnership, limited liability company treated as a partnership for federal income tax purposes, S corporation or sole proprietorship] corporation that carries on a trade or business in New Mexico and that employs in New Mexico fewer than three hundred full-time employees at any one time during the taxable year; and

                (3) "qualified student" means an individual who is at least fourteen years of age but not more than twenty-one years of age who is attending full time an accredited New Mexico secondary school and who is a participant in a career preparation education program sanctioned by the secondary school."

     SECTION 15. Section 7-2A-19 NMSA 1978 (being Laws 2002, Chapter 59, Section 1, as amended) is amended to read:

     "7-2A-19. RENEWABLE ENERGY PRODUCTION TAX CREDIT--LIMITATIONS--DEFINITIONS--CLAIMING THE CREDIT.--

          A. The tax credit provided in this section may be referred to as the "renewable energy production tax credit". The tax credit provided in this section may not be claimed with respect to the same electricity production for which the renewable energy production tax credit provided in the Income Tax Act has been claimed.

          B. A person is eligible for the renewable energy production tax credit if the person:

                (1) holds title to a qualified energy generator that first produced electricity on or before January 1, 2018; or

                (2) leases property upon which a qualified energy generator operates from a county or municipality under authority of an industrial revenue bond and if the qualified energy generator first produced electricity on or before January 1, 2018.

          C. The amount of the tax credit shall equal one cent ($.01) per kilowatt-hour of the first four hundred thousand megawatt-hours of electricity produced by the qualified energy generator in the taxable year using a wind- or biomass-derived qualified energy resource, provided that the total amount of tax credits claimed by all taxpayers for a single qualified energy generator in a taxable year using a wind- or biomass-derived qualified energy resource shall not exceed one cent ($.01) per kilowatt-hour of the first four hundred thousand megawatt-hours of electricity produced by the qualified energy generator.

          D. The amount of the tax credit for electricity produced by a qualified energy generator in the taxable year using a solar-light-derived or solar-heat-derived qualified energy resource shall be at the amounts specified in Paragraphs (1) through (10) of this subsection; provided that the total amount of tax credits claimed for a taxable year by all taxpayers for a single qualified energy generator using a solar-light-derived or solar-heat-derived qualified energy resource shall be limited to the first two hundred thousand megawatt-hours of electricity produced by the qualified energy generator in the taxable year:

                (1) one and one-half cents ($.015) per kilowatt-hour in the first taxable year in which the qualified energy generator produces electricity using a solar-light-derived or solar-heat-derived qualified energy resource;

                (2) two cents ($.02) per kilowatt-hour in the second taxable year in which the qualified energy generator produces electricity using a solar-light-derived or solar-heat-derived qualified energy resource;

                (3) two and one-half cents ($.025) per kilowatt-hour in the third taxable year in which the qualified energy generator produces electricity using a solar-light-derived or solar-heat-derived qualified energy resource;

                (4) three cents ($.03) per kilowatt-hour in the fourth taxable year in which the qualified energy generator produces electricity using a solar-light-derived or solar-heat-derived qualified energy resource;

                (5) three and one-half cents ($.035) per kilowatt-hour in the fifth taxable year in which the qualified energy generator produces electricity using a solar-light-derived or solar-heat-derived qualified energy resource;

                (6) four cents ($.04) per kilowatt-hour in the sixth taxable year in which the qualified energy generator produces electricity using a solar-light-derived or solar-heat-derived qualified energy resource;

                (7) three and one-half cents ($.035) per kilowatt-hour in the seventh taxable year in which the qualified energy generator produces electricity using a

solar-light-derived or solar-heat-derived qualified energy resource;

                (8) three cents ($.03) per kilowatt-hour in the eighth taxable year in which the qualified energy generator produces electricity using a solar-light-derived or solar-heat-derived qualified energy resource;

                (9) two and one-half cents ($.025) per kilowatt-hour in the ninth taxable year in which the qualified energy generator produces electricity using a solar-light-derived or solar-heat-derived qualified energy resource; and

                (10) two cents ($.02) per kilowatt-hour in the tenth taxable year in which the qualified energy generator produces electricity using a solar-light-derived or solar-heat-derived qualified energy resource.

          E. A taxpayer eligible for a renewable energy production tax credit pursuant to Subsection B of this section shall be eligible for the renewable energy production tax credit for ten consecutive years, beginning on the date the qualified energy generator begins producing electricity.

          F. As used in this section:

                (1) "biomass" means organic material that is available on a renewable or recurring basis, including:

                     (a) forest-related materials, including mill residues, logging residues, forest thinnings, slash, brush, low-commercial value materials or undesirable species, salt cedar and other phreatophyte or woody vegetation removed from river basins or watersheds and woody material harvested for the purpose of forest fire fuel reduction or forest health and watershed improvement;

                     (b) agricultural-related materials, including orchard trees, vineyard, grain or crop residues, including straws and stover, aquatic plants and agricultural processed co-products and waste products, including fats, oils, greases, whey and lactose;

                     (c) animal waste, including manure and slaughterhouse and other processing waste;

                     (d) solid woody waste materials, including landscape or right-of-way tree trimmings, rangeland maintenance residues, waste pallets, crates and manufacturing, construction and demolition wood wastes, excluding pressure-treated, chemically treated or painted wood wastes and wood contaminated with plastic;

                     (e) crops and trees planted for the purpose of being used to produce energy;

                     (f) landfill gas, wastewater treatment gas and biosolids, including organic waste byproducts generated during the wastewater treatment process; and

                     (g) segregated municipal solid waste, excluding tires and medical and hazardous waste;

                (2) "qualified energy generator" means a facility with at least one megawatt generating capacity located in New Mexico that produces electricity using a qualified energy resource and that sells that electricity to an unrelated person; and

                (3) "qualified energy resource" means a resource that generates electrical energy by means of a fluidized bed technology or similar low-emissions technology or a zero-emissions generation technology that has substantial long-term production potential and that uses only the following energy sources:

                     (a) solar light;

                     (b) solar heat;

                     (c) wind; or

                     (d) biomass.

          G. A person that holds title to a facility generating electricity from a qualified energy resource or a person that leases such a facility from a county or municipality pursuant to an industrial revenue bond may request certification of eligibility for the renewable energy production tax credit from the energy, minerals and natural resources department, which shall determine if the facility is a qualified energy generator. The energy, minerals and natural resources department may certify the eligibility of an energy generator only if the total amount of electricity that may be produced annually by all qualified energy generators that are certified pursuant to this section and pursuant to the Income Tax Act will not exceed a total of two million megawatt-hours plus an additional five hundred thousand megawatt-hours produced by qualified energy generators using a solar-light-derived or solar-heat-derived qualified energy resource. Applications shall be considered in the order received. The energy, minerals and natural resources department may estimate the annual power-generating potential of a generating facility for the purposes of this section. The energy, minerals and natural resources department shall issue a certificate to the applicant stating whether the facility is an eligible qualified energy generator and the estimated annual production potential of the generating facility, which shall be the limit of that facility's energy production eligible for the tax credit for the taxable year. The energy, minerals and natural resources department may issue rules governing the procedure for administering the provisions of this subsection and shall report annually to the appropriate interim legislative committee information that will allow the legislative committee to analyze the effectiveness of the renewable energy production tax credit, including the identity of qualified energy generators, the energy production means used, the amount of energy produced by those qualified energy generators and whether any applications could not be approved due to program limits.

          H. A taxpayer may be allocated all or a portion of the right to claim a renewable energy production tax credit without regard to proportional ownership interest if:

                (1) the taxpayer owns an interest in a business entity that is taxed for federal income tax purposes as a partnership;

                (2) the business entity:

                     (a) would qualify for the renewable energy production tax credit pursuant to Paragraph (1) or (2) of Subsection B of this section;

                     (b) owns an interest in a business entity that is also taxed for federal income tax purposes as a partnership and that would qualify for the renewable energy production tax credit pursuant to Paragraph (1) or (2) of Subsection B of this section; or

                     (c) owns, through one or more intermediate business entities that are each taxed for federal income tax purposes as a partnership, an interest in the business entity described in Subparagraph (b) of this paragraph;

                (3) the taxpayer and all other taxpayers allocated a right to claim the renewable energy production tax credit pursuant to this subsection own collectively at least a five percent interest in a qualified energy generator;

                (4) the business entity provides notice of the allocation and the taxpayer's interest to the energy, minerals and natural resources department on forms prescribed by that department; and

                (5) the energy, minerals and natural resources department certifies the allocation in writing to the taxpayer.

          I. Upon receipt of notice of an allocation of the right to claim all or a portion of the renewable energy production tax credit, the energy, minerals and natural resources department shall promptly certify the allocation in writing to the recipient of the allocation.

          J. A taxpayer may claim the renewable energy production tax credit by submitting to the taxation and revenue department the certificate issued by the energy, minerals and natural resources department, pursuant to Subsection G or H of this section, documentation showing the taxpayer's interest in the facility, documentation of the amount of electricity produced by the facility in the taxable year and any other information the taxation and revenue department may require to determine the amount of the tax credit due the taxpayer.

          K. If the requirements of this section have been complied with, the department shall approve the renewable energy production tax credit. The credit may be deducted from a taxpayer's New Mexico corporate income tax liability for the taxable year for which the credit is claimed. If the amount of tax credit exceeds the taxpayer's corporate income tax liability for the taxable year:

                (1) the excess may be carried forward for a period of five taxable years; or

                (2) if the tax credit was issued with respect to a qualified energy generator that first produced electricity using a qualified energy resource on or after October 1, 2007, the excess shall be refunded to the taxpayer.

          L. Once a taxpayer has been granted a renewable energy production tax credit for a given facility, that taxpayer shall be allowed to retain the facility's original date of application for tax credits for that facility until either the facility goes out of production for more than six consecutive months in a year or until the facility's ten-year eligibility has expired.

          M. Beginning in 2014 and at six-year intervals following 2014, the department shall present a report on the renewable energy production tax credit to the revenue stabilization and tax policy committee for review. The committee, with the aid of the department and the energy, minerals and natural resources department, shall determine if a need remains for the credit, if the credit is effectively being used for the purpose for which it was created and if the use of the credit is cost-effective. The credit may be proposed for repeal or amendment if it is found by the committee to be ineffective, more costly than is warranted by the purpose for which the credit was proposed or unused or otherwise no longer needed."

     SECTION 16. Section 7-2A-21 NMSA 1978 (being Laws 2007, Chapter 204, Section 4, as amended) 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, 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 be granted a sustainable building tax credit by the department if the taxpayer 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 amount of qualified occupied square footage, as indicated on the following chart:

Rating System/Level        Qualified           Tax Credit

                           Occupied             per Square

                           Square Footage       Foot

LEED-H Silver or Build     First 2,000              $5.00

Green NM Silver            Next 1,000               $2.50

LEED-H Gold or Build       First 2,000              $6.85

Green NM Gold              Next 1,000               $3.40

LEED-H Platinum or Build   First 2,000              $9.00

Green NM Emerald           Next 1,000               $4.45

EPA ENERGY STAR

Manufactured Housing       Up to 3,000              $3.00.

          E. A person that is a building owner may apply for 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 building owner meets the requirements of this 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, the energy, minerals and natural resources department may issue a certificate of eligibility to the 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 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 sustainable residential building 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 sustainable residential building at the time the certification level for the building is awarded; or

                (2) the subsequent purchaser of a sustainable residential 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 for 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 under the aggregate annual limit for sustainable commercial buildings to building owners of multifamily dwelling units 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 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 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 for which the building owner is eligible.

          I. If the requirements of this section have been complied with, the department shall issue to the 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, if applicable, 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 for 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 for 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. Beginning in 2014 and at six-year intervals following 2014, the department shall present a report on the sustainable building tax credit to the revenue stabilization and tax policy committee for review. The committee, with the aid of the department and the energy, minerals and natural resources department, shall determine if a need remains for the credit, if the credit is effectively being used for the purpose for which it was created and if the use of the credit is cost-effective. The credit may be proposed for repeal or amendment if it is found by the committee to be ineffective, more costly than is warranted by the purpose for which the credit was proposed or unused or otherwise no longer needed.

          [M.] 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) "manufactured housing" means a multisectioned home that is:

                     (a) a manufactured home or modular home;

                     (b) a single-family dwelling with a heated area of at least thirty-six feet by twenty-four feet and a total area of at least eight hundred sixty-four square feet;

                     (c) 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 New Mexico construction codes up to the date of the unit's construction; and

                     (d) installed consistent with the Manufactured Housing Act and rules adopted pursuant to that act relating to permanent foundations;

                (12) "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;

                (13) "person" does not include state, local government, public school district or tribal agencies;

                (14) "sustainable building" means either a sustainable commercial building or a sustainable residential building;

                (15) "sustainable commercial building" means 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;

                (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 silver 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 multifamily dwelling unit, as registered and certified under the LEED-H or build green New Mexico 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 silver 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 that is ENERGY STAR-qualified by the United States environmental protection agency; and

                (17) "tribal" means of, belonging to or created by a federally recognized Indian nation, tribe or pueblo."

     SECTION 17. Section 7-2A-23 NMSA 1978 (being Laws 2007, Chapter 204, Section 8) is amended to read:

     "7-2A-23. CREDIT--BLENDED BIODIESEL FUEL.--

          A. A taxpayer that is liable for payment of the special fuel excise tax pursuant to Subsections A through D of Section 7-16A-2.1 NMSA 1978 and that files a New Mexico corporate income tax return is eligible to claim a credit against corporate income tax liability for each gallon of blended biodiesel fuel on which that person paid the special fuel excise tax in the taxable year or who would have paid the special fuel excise tax in the taxable year but for the deductions allowed pursuant to Subsections B through F of Section 7-16A-10 NMSA 1978 or the treaty exemption for north Atlantic treaty organization use. The credit shall be in the following amounts for the following periods:

                (1) from January 1, 2007 until December 31, 2010, at a rate of three cents ($.03) per gallon;

                 (2) from January 1, 2011 until December 31, 2011, at a rate of two cents ($.02) per gallon; and

                (3) from January 1, 2012 until December 31, 2012, at a rate of one cent ($.01) per gallon.

          B. The tax credit provided by this section may not be claimed with respect to the same blended biodiesel fuel for which a credit has been claimed pursuant to the Income Tax Act or for which a credit or refund has been claimed pursuant to Section 7-16A-13 NMSA 1978.

          C. A taxpayer that otherwise qualifies for and claims a credit pursuant to this section for blended biodiesel fuel on which special fuel excise tax has been paid by a partnership or other business association of which the taxpayer is a member may claim a credit only in proportion to the taxpayer's interest in the partnership or business association. The total credit claimed in the aggregate by all members of the partnership or business association shall not exceed the amount of credit allowed pursuant to Subsection A of this section.

           D. The tax credit provided by this section may only be applied against the corporate income tax liability of the person that paid the special fuel excise tax on the blended biodiesel fuel with respect to which the credit is provided or that would have paid the special fuel excise tax but for the deductions allowed pursuant to Subsections B through F of Section 7-16A-10 NMSA 1978 or the treaty exemption for north Atlantic treaty organization use. If the credit exceeds the person's corporate income tax liability for the taxable year in which the credit is granted, the credit may be carried forward for five years.

          E. A taxpayer claiming a credit pursuant to this section shall provide documentation of eligibility in form and content as determined by the department.

          F. Beginning in 2014 and at six-year intervals following 2014, the department shall present a report on the tax credit provided pursuant to this section to the revenue stabilization and tax policy committee for review. The committee, with the aid of the department and the energy, minerals and natural resources department, shall determine if a need remains for the credit, if the credit is effectively being used for the purpose for which it was created and if the use of the credit is cost-effective. The credit may be proposed for repeal or amendment if it is found by the committee to be ineffective, more costly than is warranted by the purpose for which the credit was proposed or unused or otherwise no longer needed.

          [F.] G. For the purposes of this section:

                (1) "biodiesel" means renewable, biodegradable, monoalkyl ester combustible liquid fuel that is derived from agricultural plant oils or animal fats and that meets American society for testing and materials D 6751 standard specification for biodiesel B100 blend stock for distillate fuels;

                (2) "blended biodiesel fuel" means a diesel fuel that contains at least two percent biodiesel; and                     (3) "diesel fuel" means any diesel-engine fuel used for the generation of power to propel a motor vehicle."

     SECTION 18. 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 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 and that purchases and installs after January 1, 2010 but before December 31, 2020 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 tax credit". The total geothermal ground-coupled heat pump tax credit allowed to a taxpayer shall not exceed nine thousand dollars ($9,000). The department shall allow a geothermal ground-coupled heat pump tax credit only for geothermal ground-coupled heat pumps certified by the energy, minerals and natural resources department.

          B. A portion of the geothermal ground-coupled heat pump tax credit that remains unused in a 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.  

          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 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. Applications for the credit shall be considered in the order received by the department.

          E. Beginning in 2014 and at six-year intervals following 2014, the department shall present a report on the geothermal ground-coupled heat pump tax credit to the revenue stabilization and tax policy committee for review. The committee, with the aid of the department and the energy, minerals and natural resources department, shall determine if a need remains for the credit, if the credit is effectively being used for the purpose for which it was created and if the use of the credit is cost-effective. The credit may be proposed for repeal or amendment if it is found by the committee to be ineffective, more costly than is warranted by the purpose for which the credit was proposed or unused or otherwise no longer needed.

          [E.] F. 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."

     SECTION 19. Section 7-2E-1.1 NMSA 1978 (being Laws 2007, Chapter 172, Section 2) is amended to read:

     "7-2E-1.1. TAX CREDIT--RURAL JOB TAX CREDIT.--

          A. The tax credit created by this section may be referred to as the "rural job tax credit". Every eligible employer may apply for, and the taxation and revenue department may allow, a tax credit for each qualifying job the employer creates. The maximum tax credit amount with respect to each qualifying job is equal to:

                (1) twenty-five percent of the first sixteen thousand dollars ($16,000) in wages paid for the qualifying job if the job is performed or based at a location in a tier one area; or

                (2) twelve and one-half percent of the first sixteen thousand dollars ($16,000) in wages paid if the qualifying job is performed or based at a location in a tier two area.

          B. The amount of the rural job tax credit shall be six and one-fourth percent of the first sixteen thousand dollars ($16,000) in wages paid for the qualifying job in a qualifying period. The rural job tax credit may be claimed for each qualifying job for a maximum of:

                (1) four qualifying periods for each qualifying job performed or based at a location in a tier one area; and

                (2) two qualifying periods for each qualifying job performed or based at a location in a tier two area.

          C. With respect to each qualifying job for which an eligible employer seeks the rural job tax credit, the employer shall certify the amount of wages paid to each eligible employee during each qualifying period, the number of weeks during the qualifying period the position was occupied and whether the qualifying job was in a tier one or tier two area.

          D. The economic development department shall determine which employers are eligible employers and shall report the listing of eligible businesses to the taxation and revenue department in a manner and at times the departments shall agree upon.

          E. To receive a rural job tax credit with respect to any qualifying period, an eligible employer must apply to the taxation and revenue department on forms and in the manner the department may prescribe. The application shall include a certification made pursuant to Subsection C of this section. If all the requirements of this section have been complied with, the taxation and revenue department may issue to the applicant a document granting a tax credit for the appropriate qualifying period. The tax credit document shall be numbered for identification and declare its date of issuance and the amount of rural job tax credit allowed for the respective jobs created. The tax credit documents may be sold, exchanged or otherwise transferred and may be carried forward for a period of three years from the date of issuance. The parties to such a transaction to sell, exchange or transfer a rural job tax credit document shall notify the department of the transaction within ten days of the sale, exchange or transfer.

          F. The holder of the tax credit document may apply all or a portion of the rural job tax credit granted by the document against the holder's modified combined tax liability, personal income tax liability or corporate income tax liability. Any balance of rural job tax credit granted by the document may be carried forward for up to three years from the date of issuance of the tax credit document. No amount of rural job tax credit may be applied against a gross receipts tax imposed by a municipality or county.

          G. Notwithstanding the provisions of Section

7-1-8 NMSA 1978, the taxation and revenue department may disclose to any person the balance of rural job tax credit remaining on any tax credit document and the balance of credit remaining on that document for any period.

          [H. The secretary of economic development, the secretary of taxation and revenue and the secretary of labor or their designees shall annually evaluate the effectiveness of the rural job tax credit in stimulating economic development in the rural areas of New Mexico and make a joint report of their findings to each session of the legislature so long as the rural job tax credit is in effect.

          I.] H. An eligible employer that creates a qualifying job in the period beginning on or after July 1, 2006 but before July 1, 2007 or creates a qualifying job, the qualifying period of which includes a part of the period between July 1, 2006 and July 1, 2007, for which the eligible employer has not received a rural job tax credit document pursuant to this section may submit an application for, and the department may issue to the eligible employer applying, a document granting a tax credit for the appropriate qualifying period. Claims for a rural job tax credit submitted pursuant to the provisions of this subsection shall be submitted within three years from the date of issuance of the rural job tax credit document.

          I. Beginning in 2014 and at six-year intervals following 2014, the taxation and revenue department shall present a report on the rural job tax credit to the revenue stabilization and tax policy committee for review. The committee, with the aid of the taxation and revenue department, the workforce solutions department and the economic development department, shall determine if a need remains for the credit, if the credit is effectively being used for the purpose for which it was created and if the use of the credit is cost-effective. The credit may be proposed for repeal or amendment if it is found by the committee to be ineffective, more costly than is warranted by the purpose for which the credit was proposed or unused or otherwise no longer needed.

          J. As used in this section:

                (1) "eligible employee" means any individual other than an individual who: 

                     (a) bears any of the relationships described in Paragraphs (1) through (8) of 26 U.S.C. Section 152(a) to the employer or, if the employer is a corporation, to an individual who owns, directly or indirectly, more than fifty percent in value of the outstanding stock of the corporation or, if the employer is an entity other than a corporation, to any individual who owns, directly or indirectly, more than fifty percent of the capital and profits interests in the entity;

                     (b) if the employer is an estate or trust, is a grantor, beneficiary or fiduciary of the estate or trust or is an individual who bears any of the relationships described in Paragraphs (1) through (8) of 26 U.S.C. Section 152(a) to a grantor, beneficiary or fiduciary of the estate or trust; or

                     (c) is a dependent, as that term is described in 26 U.S.C. Section 152(a)(9), of the employer or, if the taxpayer is a corporation, of an individual who owns, directly or indirectly, more than fifty percent in value of the outstanding stock of the corporation or, if the employer is an entity other than a corporation, of any individual who owns, directly or indirectly, more than fifty percent of the capital and profits interests in the entity or, if the employer is an estate or trust, of a grantor, beneficiary or fiduciary of the estate or trust;

                (2) "eligible employer" means an employer

who has been approved for in-plant training assistance pursuant to Section 21-19-7 NMSA 1978;

                (3) "metropolitan statistical area" means a metropolitan statistical area in New Mexico as determined by the United States bureau of the census;

                (4) "modified combined tax liability" means the total liability for the reporting period for the gross receipts tax imposed by Section 7-9-4 NMSA 1978 together with any tax collected at the same time and in the same manner as that gross receipts tax, such as the compensating tax, the withholding tax, the interstate telecommunications gross receipts tax, the surcharges imposed by Section 63-9D-5 NMSA 1978 and the surcharge imposed by Section 63-9F-11 NMSA 1978, minus the amount of any credit other than the rural job tax credit applied against any or all of these taxes or surcharges; but "modified combined tax liability" excludes all amounts collected with respect to local option gross receipts taxes;

                (5) "qualifying job" means a job established by the employer that is occupied by an eligible employee for at least forty-eight weeks of a qualifying period;

                (6) "qualifying period" means the period of twelve months beginning on the day an eligible employee begins working in a qualifying job or the period of twelve months beginning on the anniversary of the day an eligible employee began working in a qualifying job;

                (7) "rural area" means any part of the state other than: 

                     (a) an H class county;

                     (b) the state fairgrounds;

                     (c) an incorporated municipality within a metropolitan statistical area if the municipality's population is thirty thousand or more according to the most recent federal decennial census; and 

                     (d) any area within ten miles of the exterior boundaries of a municipality described in Subparagraph (c) of this paragraph;

                (8) "tier one area" means:

                     (a) any municipality within the rural area if the municipality's population according to the most recent federal decennial census is fifteen thousand or less; or

                     (b) any part of the rural area that is not within the exterior boundaries of a municipality;

                (9) "tier two area" means any municipality within the rural area if the municipality's population according to the most recent federal decennial census is more than fifteen thousand; and 

                (10) "wages" means wages as defined by Paragraphs (1), (2) and (3) of 26 U.S.C. Section 51(c)."

     SECTION 20. Section 7-2F-1 NMSA 1978 (being Laws 2002, Chapter 36, Section 1, as amended) is amended to read:

     "7-2F-1. FILM PRODUCTION TAX CREDIT.--

          A. The tax credit created by this section may be referred to as the "film production tax credit". An eligible film production company may apply for, and the taxation and revenue department may allow, a tax credit in an amount equal to the percentage specified in Subsection B of this section of:

                (1) direct production expenditures made in New Mexico that: 

                     (a) are directly attributable to the production in New Mexico of a film or commercial audiovisual product;

                     (b) are subject to taxation by the state of New Mexico; and 

                     (c) exclude direct production expenditures for which another taxpayer claims the film production tax credit; and

                (2) postproduction expenditures made in New Mexico that: 

                     (a) are directly attributable to the production of a commercial film or audiovisual product;

                     (b) are for services performed in New Mexico;

                     (c) are subject to taxation by the state of New Mexico; and

                     (d) exclude postproduction expenditures for which another taxpayer claims the film production tax credit.

          B. Except as provided in Subsections C and J of this section, the percentage to be applied in calculating the amount of the film production tax credit is twenty-five percent.

          C. With respect to expenditures attributable to a production for which the film production company receives a tax credit pursuant to the federal new markets tax credit program, the percentage to be applied in calculating the film production tax credit is twenty percent.

          D. The film production tax credit shall not be claimed with respect to direct production expenditures or postproduction expenditures for which the film production company has delivered a nontaxable transaction certificate pursuant to Section 7-9-86 NMSA 1978.

          E. A long-form narrative film production for which the film production tax credit is claimed pursuant to Paragraph (1) of Subsection A of this section shall contain an acknowledgment that the production was filmed in New Mexico.

          F. To be eligible for the film production tax credit, a film production company shall submit to the New Mexico film division of the economic development department information required by the division to demonstrate conformity with the requirements of this section and shall agree in writing:

                (1) to pay all obligations the film production company has incurred in New Mexico;

                (2) to publish, at completion of principal photography, a notice at least once a week for three consecutive weeks in local newspapers in regions where filming has taken place to notify the public of the need to file creditor claims against the film production company by a specified date;

                (3) that outstanding obligations are not waived should a creditor fail to file by the specified date; and

                (4) to delay filing of a claim for the film production tax credit until the New Mexico film division delivers written notification to the taxation and revenue department that the film production company has fulfilled all requirements for the credit. 

          G. The New Mexico film division shall determine the eligibility of the company and shall report this information to the taxation and revenue department in a manner and at times the economic development department and the taxation and revenue department shall agree upon.

          H. To receive a film production tax credit, a film production company shall apply to the taxation and revenue department on forms and in the manner the department may prescribe. The application shall include a certification of the amount of direct production expenditures or postproduction expenditures made in New Mexico with respect to the film production for which the film production company is seeking the film production tax credit. If the requirements of this section have been complied with, the taxation and revenue department shall approve the film production tax credit and issue a document granting the tax credit.

          I. The film production company may apply all or a portion of the film production tax credit granted against personal income tax liability or corporate income tax liability. If the amount of the film production tax credit claimed exceeds the film production company's tax liability for the taxable year in which the credit is being claimed, the excess shall be refunded.

          J. As applied to direct production expenditures for the services of performing artists, the film production tax credit authorized by this section shall not exceed five million dollars ($5,000,000) for services rendered by all performing artists in a production for which the film production tax credit is claimed.

          K. Beginning in 2014 and at six-year intervals following 2014, the taxation and revenue department shall present a report on the film production tax credit to the revenue stabilization and tax policy committee for review. The committee, with the aid of the taxation and revenue department and the economic development department, shall determine if a need remains for the credit, if the credit is effectively being used for the purpose for which it was created and if the use of the credit is cost-effective. The credit may be proposed for repeal or amendment if it is found by the committee to be ineffective, more costly than is warranted by the purpose for which the credit was proposed or unused or otherwise no longer needed."

     SECTION 21. Section 7-9-79.2 NMSA 1978 (being Laws 2007, Chapter 204, Section 9) is amended to read:

     "7-9-79.2. GROSS RECEIPTS TAX--COMPENSATING TAX--BIODIESEL BLENDING FACILITY TAX CREDIT.--

          A. A taxpayer who is a rack operator as defined in the Special Fuels Supplier Tax Act and who installs biodiesel blending equipment in property owned by the taxpayer for the purpose of establishing or expanding a facility to produce blended biodiesel fuel is eligible to claim a credit against gross receipts tax or compensating tax. The credit shall be an amount equal to thirty percent of the purchase cost of the equipment plus thirty percent of the cost of installing that equipment. The credit provided by this section may be referred to as the "biodiesel blending facility tax credit".

           B. The biodiesel blending facility tax credit shall not exceed fifty thousand dollars ($50,000) with respect to equipment installed at any one facility.

          C. Upon application from a taxpayer wishing to claim the biodiesel blending facility tax credit, the energy, minerals and natural resources department shall determine if the equipment for which the tax credit will be claimed meets the requirements of this section and if purchase and installation costs reported by the taxpayer are legitimate. Upon these determinations being made in favor of the taxpayer, the energy, minerals and natural resources department shall issue a dated certificate of eligibility containing this information and an estimate of the amount of the biodiesel blending facility tax credit for which the taxpayer is eligible.

          D. To claim the biodiesel blending facility tax credit, the taxpayer shall provide to the taxation and revenue department the certificate of eligibility from the energy, minerals and natural resources department. Upon receipt of the certificate, the taxation and revenue department shall approve the claim for the credit if the total cumulative amount of approved claims for the credit for all taxpayers for the calendar year does not exceed one million dollars ($1,000,000). The department shall maintain a record of the cumulative amount of claims for the credit that have been approved and when it determines that this cumulative amount has reached one million dollars ($1,000,000), it shall cease approving any additional claims for the biodiesel blending facility tax credit.

          E. If a taxpayer who has received the biodiesel blending facility tax credit ceases biodiesel blending without completing at least one hundred eighty days of availability of the facility within the first three hundred sixty-five days after the issuance of the certificate of eligibility from the energy, minerals and natural resources department, any amount of approved credit not applied against the taxpayer's gross receipts tax or compensating tax liability shall be extinguished. The taxpayer must amend the taxpayer's return, self-assess the tax owed and return any biodiesel blending facility tax credit received within four hundred twenty-five days of the date of issuance of the certificate of eligibility.

          F. The tax credit provided by this section may only be applied against the taxpayer's gross receipts tax liability or compensating tax liability. If the credit exceeds the taxpayer's tax liability in the reporting period for which it is granted, the credit may be carried forward for four years from the date of the certificate of eligibility.

          G. Beginning in 2014 and at six-year intervals following 2014, the department shall present a report on the biodiesel blending facility tax credit to the revenue stabilization and tax policy committee for review. The committee, with the aid of the department and the energy, minerals and natural resources department, shall determine if a need remains for the credit, if the credit is effectively being used for the purpose for which it was created and if the use of the credit is cost-effective. The credit may be proposed for repeal or amendment if it is found by the committee to be ineffective, more costly than is warranted by the purpose for which the credit was proposed or unused or otherwise no longer needed.

          [G.] H. For the purposes of this section:

                (1) "biodiesel" means renewable, biodegradable, monoalkyl ester combustible liquid fuel that is derived from agricultural plant oils or animal fats and that meets American society for testing and materials D 6751 standard specification for biodiesel B100 blend stock for distillate fuels;

                (2) "biodiesel blending equipment" means equipment necessary for the process of blending biodiesel with diesel fuel to produce blended biodiesel fuel;                          (3) "blended biodiesel fuel" means a diesel fuel that contains at least two percent biodiesel; and

                (4) "diesel fuel" means any diesel-engine fuel used for the generation of power to propel a motor vehicle."

     SECTION 22. Section 7-9-96.1 NMSA 1978 (being Laws 2007, Chapter 361, Section 7) is amended to read:

     "7-9-96.1. CREDIT--GROSS RECEIPTS TAX--RECEIPTS OF CERTAIN HOSPITALS.--

          A. A hospital licensed by the department of health may claim a credit for each reporting period against the gross receipts tax due for that reporting period as follows:

                (1) for a hospital located in a municipality:

                     (a) on or after July 1, 2007 but before July 1, 2008, in an amount equal to seven hundred fifty-five thousandths percent of the hospital's taxable gross receipts for that reporting period after all applicable deductions have been taken;

                     (b) on or after July 1, 2008 but before July 1, 2009, in an amount equal to one and fifty-one hundredths percent of the hospital's taxable gross receipts for that reporting period after all applicable deductions have been taken;

                     (c) on or after July 1, 2009 but before July 1, 2010, in an amount equal to two and two hundred sixty-five thousandths percent of the hospital's taxable gross receipts for that reporting period after all applicable deductions have been taken;

                     (d) on or after July 1, 2010 but before July 1, 2011, in an amount equal to three and two hundredths percent of the hospital's taxable gross receipts for that reporting period after all applicable deductions have been taken; and

                     (e) on or after July 1, 2011, in an amount equal to three and seven hundred seventy-five thousandths percent of the hospital's taxable gross receipts for that reporting period after all applicable deductions have been taken; and

                (2) for a hospital located in the unincorporated area of a county:

                     (a) on or after July 1, 2007 but before July 1, 2008, in an amount equal to one percent of the hospital's taxable gross receipts for that reporting period after all applicable deductions have been taken;

                     (b) on or after July 1, 2008 but before July 1, 2009, in an amount equal to two percent of the hospital's taxable gross receipts for that reporting period after all applicable deductions have been taken;

                     (c) on or after July 1, 2009 but before July 1, 2010, in an amount equal to three percent of the hospital's taxable gross receipts for that reporting period after all applicable deductions have been taken;

                      (d) on or after July 1, 2010 but before July 1, 2011, in an amount equal to four percent of the hospital's taxable gross receipts for that reporting period after all applicable deductions have been taken; and

                     (e) on or after July 1, 2011, in an amount equal to five percent of the hospital's taxable gross receipts for that reporting period after all applicable deductions have been taken.

          B. Beginning in 2014 and at six-year intervals following 2014, the department shall present a report on the credits provided pursuant to this section to the revenue stabilization and tax policy committee for review. The committee, with the aid of the department, shall determine if a need remains for the credits, if the credits are effectively being used for the purpose for which they were created and if the use of the credits is cost-effective. The credits may be proposed for repeal or amendment if they are found by the committee to be ineffective, more costly than is warranted by the purpose for which the credits were proposed or unused or otherwise no longer needed.

          [B.] C. For the purposes of this section, "hospital" means a facility providing emergency or urgent care, inpatient medical care and nursing care for acute illness, injury, surgery or obstetrics and includes a facility licensed by the department of health as a critical access hospital, general hospital, long-term acute care hospital, psychiatric hospital, rehabilitation hospital, limited services hospital and special hospital."

     SECTION 23. Section 7-9-96.2 NMSA 1978 (being Laws 2007, Chapter 361, Section 8) is amended to read:

     "7-9-96.2. CREDIT--GROSS RECEIPTS TAX--UNPAID CHARGES FOR SERVICES PROVIDED IN A HOSPITAL.--

          A. A licensed medical doctor or licensed osteopathic physician may claim a credit against gross receipts taxes due in the following amounts:

                (1) from July 1, 2007 through June 30, 2008, thirty-three percent of the value of unpaid qualified health care services;

                (2) from July 1, 2008 through June 30, 2009, sixty-seven percent of the value of unpaid qualified health care services; and

                (3) on and after July 1, 2009, one hundred percent of the value of unpaid qualified health care services.

          B. Beginning in 2014 and at six-year intervals following 2014, the department shall present a report on the credit provided pursuant to this section to the revenue stabilization and tax policy committee for review. The committee, with the aid of the department, shall determine if a need remains for the credit, if the credit is effectively being used for the purpose for which it was created and if the use of the credit is cost-effective. The credit may be proposed for repeal or amendment if it is found by the committee to be ineffective, more costly than is warranted by the purpose for which the credit was proposed or unused or otherwise no longer needed.

          [B.] C. As used in this section:

                (1) "qualified health care services" means medical care services provided by a licensed medical doctor or licensed osteopathic physician while on call to a hospital; and

                (2) "value of unpaid qualified health care services" means the amount that is charged for qualified health care services, not to exceed one hundred thirty percent of the reimbursement rate for the services under the medicaid program administered by the human services department, that remains unpaid one year after the date of billing and that the licensed medical doctor or licensed osteopathic physician has reason to believe will not be paid because:

                     (a) at the time the services were provided, the person receiving the services had no health insurance or had health insurance that did not cover the services provided;

                     (b) at the time the services were provided, the person receiving the services was not eligible for medicaid; and

                     (c) the charges are not reimbursable under a program established pursuant to the Indigent Hospital and County Health Care Act."

     SECTION 24. Section 7-9A-2.1 NMSA 1978 (being Laws 2001, Chapter 57, Section 2 and Laws 2001, Chapter 337, Section 2) is amended to read:

     "7-9A-2.1. LEGISLATIVE OVERSIGHT.--[The interim revenue stabilization and tax policy committee during the 2005 interim shall conduct a review of the use of the investment credit and the effectiveness of the credit in meeting the state's economic development and tax policy objectives. Following the study, the committee shall determine whether changes are necessary in the Investment Credit Act and report its findings and recommendations to the second session of the forty-seventh legislature] Beginning in 2014 and at six-year intervals following 2014, the department shall present a report on the credit provided pursuant to the Investment Credit Act to the revenue stabilization and tax policy committee for review. The committee, with the aid of the department and the economic development department, shall determine if a need remains for the credit, if the credit is effectively being used for the purpose for which it was created and if the use of the credit is cost-effective. The credit may be proposed for repeal or amendment if it is found by the committee to be ineffective, more costly than is warranted by the purpose for which the credit was proposed or unused or otherwise no longer needed."

     SECTION 25. Section 7-9E-11 NMSA 1978 (being Laws 2007, Chapter 172, Section 20) is amended to read:

     "7-9E-11. REPORTING.--

          A. By October 15 of each year, a national laboratory that has claimed a tax credit pursuant to the Laboratory Partnership with Small Business Tax Credit Act for the previous calendar year shall submit an annual report in writing to the department, the economic development department and an appropriate legislative interim committee.

          B. If more than one national laboratory claims a tax credit pursuant to the Laboratory Partnership with Small Business Tax Credit Act for the previous calendar year, those laboratories shall jointly submit an annual report to the department, the economic development department and an appropriate legislative interim committee no later than October 15 following the calendar year in which the small business assistance was provided.

          C. An annual report shall summarize activities related to and the results of the small business assistance programs that were provided by one or more national laboratories and shall include:

                (1) a summary of the program results and the number of small businesses assisted in each county;

                (2) a description of the projects involving multiple small businesses;

                (3) results of surveys of small businesses to which small business assistance is provided;

                (4) the total amount of the tax credits claimed pursuant to the Laboratory Partnership with Small Business Tax Credit Act for the year on which the report is based; and

                (5) an economic impact study of jobs created, jobs retained, cost savings and increased sales generated by small businesses for which small business assistance is provided.

          D. At any time after receipt of an annual report required pursuant to this section from one or more national laboratories eligible for tax credits authorized pursuant to the Laboratory Partnership with Small Business Tax Credit Act, the department or the economic development department may provide written instructions to a national laboratory identifying future improvements in the laboratory's small business assistance program for which it receives that tax credit.

          E. Beginning in 2014 and at six-year intervals following 2014, the department shall present a report on the credits provided pursuant to the Laboratory Partnership with Small Business Tax Credit Act to the revenue stabilization and tax policy committee for review. The committee, with the aid of the department and the economic development department, shall determine if a need remains for the credits, if the credits are effectively being used for the purpose for which they were created and if the use of the credits is cost-effective. The credits may be proposed for repeal or amendment if they are found by the committee to be ineffective, more costly than is warranted by the purpose for which the credits were proposed or unused or otherwise no longer needed."

     SECTION 26. Section 7-9F-12 NMSA 1978 (being Laws 2000 (2nd S.S.), Chapter 22, Section 12) is amended to read:

     "7-9F-12. DEPARTMENT REPORT.--

          A. In October 2003 and each year thereafter, the department shall report to the legislative finance committee and the revenue stabilization and tax policy committee on the fiscal and economic impacts of the Technology Jobs Tax Credit Act using the most recently available data for the two prior fiscal years. The report shall include the number of taxpayers who have received basic credits or additional credits under the Technology Jobs Tax Credit Act, the amounts of the basic credits and additional credits, the geographic locations of the qualified facilities and the payroll increases of taxpayers related to additional credits, subject to the confidentiality provisions of Section 7-1-8 NMSA 1978.

          B. Beginning in 2014 and at six-year intervals following 2014, in addition to the annual reports required in Subsection A of this section, the department shall present a report that analyzes the credits provided pursuant to the Techonology Jobs Tax Credit Act to the revenue stabilization and tax policy committee for the purpose of facilitating the review by that committee of those credits. The revenue stabilization and tax policy committee, with the aid of the department and the economic development department, shall determine if a need remains for the credits, if the credits are effectively being used for the purpose for which they were created and if the use of the credits is cost-effective. The credits may be proposed for repeal or amendment if they are found by the committee to be ineffective, more costly than is warranted by the purpose for which the credits were proposed or unused or otherwise no longer needed."

     SECTION 27. Section 7-9G-1 NMSA 1978 (being Laws 2004, Chapter 15, Section 1, as amended) is amended to read:

     "7-9G-1. HIGH-WAGE JOBS TAX CREDIT--QUALIFYING

HIGH-WAGE JOBS.--

          A. A taxpayer who is an eligible employer may apply for, and the taxation and revenue department may allow, a tax credit for each new high-wage economic-based job. The credit provided in this section may be referred to as the "high-wage jobs tax credit".

          B. The high-wage jobs tax credit may be claimed and allowed in an amount equal to ten percent of the wages and benefits distributed to an eligible employee in a new high-wage economic-based job, but shall not exceed twelve thousand dollars ($12,000).

          C. The high-wage jobs tax credit may be claimed by an eligible employer for each new high-wage economic-based job performed for the year in which the new high-wage economic-based job is created and for the three following qualifying periods.

          D. A new high-wage economic-based job shall not be eligible for a credit pursuant to this section unless the eligible employer's total number of employees with new high-wage economic-based jobs on the last day of the qualifying period at the location at which the job is performed or based is at least one more than the number on the day prior to the date the job was created.

          E. With respect to each new high-wage economic-based job for which an eligible employer seeks the high-wage jobs tax credit, the employer shall certify:

                (1) the amount of wages paid to each eligible employee in a new high-wage economic-based job during each qualifying period;

                (2) the number of weeks the position was occupied during the qualifying period;

                (3) whether the new high-wage economic-based job was in a municipality with a population of forty thousand or more or with a population of less than forty thousand according to the most recent federal decennial census and whether the job was in the unincorporated area of a county; and

                (4) the total number of employees employed by the employer at the job location on the day prior to the qualifying period and on the last day of the qualifying period.

          F. To receive a high-wage jobs tax credit with respect to any qualifying period, an eligible employer shall apply to the taxation and revenue department on forms and in the manner prescribed by the department. The application shall include a certification made pursuant to Subsection E of this section.

          G. The credit provided in this section may be deducted from the modified combined tax liability of a taxpayer. If the credit exceeds the modified combined tax liability of the taxpayer, the excess shall be refunded to the taxpayer.

          H. The economic development department shall report to the appropriate interim legislative committee before November 1 of each year the cost of this tax credit to the state and its impact on company recruitment and job creation.

          I. Beginning in 2014 and at six-year intervals following 2014, the taxation and revenue department shall present a report on the high-wage jobs tax credit to the revenue stabilization and tax policy committee for review. The committee, with the aid of the taxation and revenue department and the economic development department, shall determine if a need remains for the credit, if the credit is effectively being used for the purpose for which it was created and if the use of the credit is cost-effective. The credit may be proposed for repeal or amendment if it is found by the committee to be ineffective, more costly than is warranted by the purpose for which the credit was proposed or unused or otherwise no longer needed. 

          [I.] J. As used in this section:

                (1) "benefits" means any employee benefit plan as defined in Title 1, Section 3 of the federal Employee Retirement Income Security Act of 1974, 29 U.S.C. 1002;

                (2) "eligible employee" means an individual who is employed by an eligible employer and who is a resident of New Mexico; "eligible employee" does not include an individual who:

                     (a) bears any of the relationships described in Paragraphs (1) through (8) of 26 U.S.C. Section 152(a) to the employer or, if the employer is a corporation, to an individual who owns, directly or indirectly, more than fifty percent in value of the outstanding stock of the corporation or, if the employer is an entity other than a corporation, to an individual who owns, directly or indirectly, more than fifty percent of the capital and profits interest in the entity;

                     (b) if the employer is an estate or trust, is a grantor, beneficiary or fiduciary of the estate or trust or is an individual who bears any of the relationships described in Paragraphs (1) through (8) of 26 U.S.C. Section 152(a) to a grantor, beneficiary or fiduciary of the estate or trust;

                     (c) is a dependent, as that term is described in 26 U.S.C. Section 152(a)(9), of the employer or, if the taxpayer is a corporation, of an individual who owns, directly or indirectly, more than fifty percent in value of the outstanding stock of the corporation or, if the employer is an entity other than a corporation, of an individual who owns, directly or indirectly, more than fifty percent of the capital and profits interest in the entity or, if the employer is an estate or trust, of a grantor, beneficiary or fiduciary of the estate or trust; or

                     (d) is working or has worked as an employee or as an independent contractor for an entity that directly or indirectly owns stock in a corporation of the eligible employer or other interest of the eligible employer that represents fifty percent or more of the total voting power of that entity or has a value equal to fifty percent or more of the capital and profits interest in the entity;

                (3) "eligible employer" means an employer that:

                     (a) made more than fifty percent of its sales to persons outside New Mexico during the most recent twelve months of the employer's modified combined tax liability reporting periods ending prior to claiming a high-wage jobs tax credit; or

                     (b) is eligible for development training program assistance pursuant to Section 21-19-7 NMSA 1978;

                (4) "modified combined tax liability" means the total liability for the reporting period for the gross receipts tax imposed by Section 7-9-4 NMSA 1978 together with any tax collected at the same time and in the same manner as the gross receipts tax, such as the compensating tax, the withholding tax, the interstate telecommunications gross receipts tax, the surcharges imposed by Section 63-9D-5 NMSA 1978 and the surcharge imposed by Section 63-9F-11 NMSA 1978, minus the amount of any credit other than the high-wage jobs tax credit applied against any or all of these taxes or surcharges; but "modified combined tax liability" excludes all amounts collected with respect to local option gross receipts taxes;

                (5) "new high-wage economic-based job" means a job created by an eligible employer on or after July 1, 2004 and prior to July 1, 2015 that is occupied for at least forty-eight weeks of a qualifying period by an eligible employee who is paid wages calculated for the qualifying period to be at least:

                     (a) forty thousand dollars ($40,000) if the job is performed or based in a municipality with a population of forty thousand or more according to the most recent federal decennial census; and

                     (b) twenty-eight thousand dollars ($28,000) if the job is performed or based in a municipality with a population of less than forty thousand according to the most recent federal decennial census or in the unincorporated area of a county;

                (6) "qualifying period" means the period of twelve months beginning on the day an eligible employee begins working in a new high-wage economic-based job or the period of twelve months beginning on the anniversary of the day an eligible employee began working in a new high-wage economic-based job; and

                (7) "wages" means wages as defined in Paragraphs (1), (2) and (3) of 26 U.S.C. Section 51(c)."

     SECTION 28. Section 7-9H-6 NMSA 1978 (being Laws 2005, Chapter 104, Section 16) is amended to read:

     "7-9H-6. ADMINISTRATION OF THE ACT--REPORTING.--

          A. The department shall administer the Research and Development Small Business Tax Credit Act pursuant to the Tax Administration Act.

          B. Beginning in 2014 and at six-year intervals following 2014, the department shall present a report that analyzes the credits provided pursuant to the Research and Development Small Business Tax Credit Act to the revenue stabilization and tax policy committee for the purpose of facilitating the review by that committee of those credits. The revenue stabilization and tax policy committee, with the aid of the department and the economic development department, shall determine if a need remains for the credits, if the credits are effectively being used for the purpose for which they were created and if the use of the credits is cost- effective. The credits may be proposed for repeal or amendment if they are found by the committee to be ineffective, more costly than is warranted by the purpose for which the credits were proposed or unused or otherwise no longer needed."

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