HOUSE BILL 262
55th legislature - STATE OF NEW MEXICO - first session, 2021
Debra M. Sariñana and Mimi Stewart and Meredith Dixon
RELATING TO ENERGY; CREATING THE ENERGY STORAGE SYSTEM INCOME TAX CREDIT; REQUIRING THE TAXATION AND REVENUE DEPARTMENT TO PROVIDE AN ANNUAL REPORT; REQUIRING THE ENERGY, MINERALS AND NATURAL RESOURCES DEPARTMENT TO PROVIDE AN ANNUAL REPORT.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. A new section of the Income Tax Act is enacted to read:
"[NEW MATERIAL] ENERGY STORAGE SYSTEM INCOME TAX CREDIT.--
A. For taxable years prior to January 1, 2024, a taxpayer who is not a dependent of another individual and who purchases or installs an energy storage system on the taxpayer's residential property may apply for, and the department may allow, a credit against the taxpayer's tax liability imposed pursuant to the Income Tax Act subject to the provisions of Subsection C of this section.
B. No more than one purchase and installation of an energy storage system per property shall be eligible for the credit. The credit provided by this section may be referred to as the "energy storage system income tax credit".
C. The department shall allow an energy storage system income tax credit only for the purchase and installation of an energy storage system that:
(1) is installed in an agriculture enterprise, a business or a residence;
(2) is installed for use with a new or existing photovoltaic system;
(3) has a minimum of two hours of storage capacity;
(4) is certified by the energy, minerals and natural resources department pursuant to rules promulgated pursuant to Subsection K of this section;
(5) is installed in a manner that meets the permitting requirements established by local ordinance or state law; and
(6) is installed in a manner so that it can be used as a shared resource with a utility.
D. The energy storage system income tax credit shall be forty percent of the total cost to purchase and install the system, up to a maximum credit of five thousand dollars ($5,000).
E. An energy storage system income tax credit shall apply to the components and installation costs that are specific to the storage system itself and shall not apply to equipment or installation costs for energy generation.
F. A taxpayer may claim an energy storage system income tax credit for the taxable year in which the taxpayer purchases and installs an energy storage system; provided that if the annual aggregate amount of energy storage system income tax credits established pursuant to Subsection G of this section has been met at the time of the claim, the department shall notify the taxpayer and the taxpayer may claim the credit in the following year. To receive the tax credit, a taxpayer shall apply to the department on forms and in the manner prescribed by the department. The application shall include a certification made by the energy, minerals and natural resources department pursuant to Subsection K of this section.
G. The department shall allow a maximum annual aggregate of one million dollars ($1,000,000) in energy storage system income tax credits per fiscal year. Completed applications for the credit shall be considered in the order received by the department. If the maximum annual aggregate is met in a fiscal year, the department shall notify the energy, minerals and natural resources department that no other energy storage systems may be eligible for a tax credit for that fiscal year.
H. For that portion of an energy storage system income tax credit that exceeds a taxpayer's income tax liability for the taxable year in which the credit is claimed, the applicant may carry forward the balance of the credit for a maximum of five consecutive years.
I. Married individuals filing separate returns for a taxable year for which they could have filed a joint return may each claim only one-half of the energy storage system income tax credit that would have been claimed on a joint return.
J. A taxpayer may be allocated the right to claim an energy storage system income tax credit in proportion to the taxpayer's ownership interest if the taxpayer owns an interest in a business entity that is taxed for federal income tax purposes as a partnership or limited liability company and that business entity has met all of the requirements to be eligible for the credit. The total credit claimed by all members of the partnership or limited liability company shall not exceed the allowable credit pursuant to Subsection D of this section.
K. The energy, minerals and natural resources department shall adopt rules establishing procedures to:
(1) provide certification of an energy storage system installed on a taxpayer's property for purposes of obtaining an energy storage system income tax credit;
(2) provide notice to taxpayers if the maximum annual aggregate amount pursuant to Subsection G of this section has been met; and
(3) annually provide the department with information relevant to the presentation required pursuant to Subsection N of this section.
L. Completed applications for certification pursuant to Subsection K of this section shall be considered in the order received by the energy, minerals and natural resources department.
M. A taxpayer receiving a certification from the energy, minerals and natural resources department pursuant to this section shall provide that certification to the department in a manner required by the department when making a claim for an energy storage system income tax credit.
N. The department shall compile an annual report on the energy storage system income tax credit that shall include the number of taxpayers certified by the energy, minerals and natural resources department to receive the credit, the number and aggregate dollar amount of credits approved and applied against income tax liability and any other information necessary to evaluate the credit. The department shall present the annual report to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the cost of the tax credit.
O. As used in this section, "energy storage system" means a battery used to store electrical energy for use or to displace energy at a later time."
SECTION 2. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2022.
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