HOUSE BILL 36
53rd legislature - STATE OF NEW MEXICO - second session, 2018
Carl Trujillo and Patricio Ruiloba and Debbie A. Rodella
RELATING TO TAXATION; REINSTATING THE SOLAR MARKET DEVELOPMENT TAX CREDIT; CREATING SEPARATE AGGREGATE CAPS FOR BUSINESSES AND RESIDENCES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. 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] D of this section, a taxpayer who files an individual New Mexico income
tax return for a taxable year beginning on or after January 1,  2018 and who purchases and installs after January 1, [2006 but before December 31, 2016] 2018 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; provided that the power from the system is used primarily for consumption on the site where the system is installed. The tax credit allowed pursuant to this section may be referred to as the "solar market development tax credit".
B. The total solar market development tax credit allowed for either a photovoltaic system or a solar thermal system shall not exceed:
(1) nine thousand dollars ($9,000) for a system installed in a business or agricultural enterprise; and
(2) four thousand dollars ($4,000) for a system installed in a residence.
C. To receive a solar market development tax credit, a taxpayer shall apply to the department on forms and in the manner prescribed by 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] The application shall include a certification made pursuant to Subsection G of this section. If the taxpayer is a business or agricultural enterprise, the application shall include the taxpayer's federal employer identification number.
[C.] D. 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.] E. The department may allow a maximum annual aggregate of:
(1) [two million dollars ($2,000,000)] one million five hundred thousand dollars ($1,500,000) in solar market development tax credits for solar thermal or photovoltaic systems installed in business or agricultural enterprises in New Mexico; and
(2) [three million dollars ($3,000,000)] three million five hundred thousand dollars ($3,500,000) in solar market development tax credits for solar thermal or photovoltaic systems installed in residences in New Mexico.
[E.] F. 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] G. 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.
H. A taxpayer allowed a tax credit pursuant to this section shall report the amount of the credit to the department in a manner required by the department.
I. The department shall compile an annual report on the solar market development tax credit that shall include the number of taxpayers approved by the department to receive the credit, the aggregate amount of credits approved and any other information necessary to evaluate the effectiveness of the credit. Each year that the credit is in effect, the department shall compile and present the annual reports to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the effectiveness and cost of the tax credit.
[G.] J. 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 2. TEMPORARY PROVISION--EXHAUSTION OF CREDITS.--
A. If a taxpayer has met the eligibility requirements to apply for and claim a solar market development tax credit pursuant to Section 7-2-18.14 NMSA 1978 for a period prior to the effective date of this act, the taxpayer may claim, and the taxation and revenue department may approve, the credit for those periods, including amounts that may be carried forward pursuant to that section as it was in effect prior to the effective date of this act.
B. If a taxpayer has claimed and been awarded a solar market development tax credit pursuant to Section 7-2-18.14 NMSA 1978 but a portion of the credit claimed remains unused, the taxpayer may claim the unused portion, including amounts that could have been carried forward pursuant to that section as it was in effect prior to the effective date of this act.
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