HB 252 — ADJUST INCOME TAX BRACKETS

e b l e e , gh "3-32-6.

ADDITIONAL POWERS CONFERRED ON MUNICIPALITIES.--MUNICIPALITIES.--In n d d i = = o h l ] b ,d In addition to any other powers that it may now have, a i a º r e r = municipality shall have the following powers:

tA. e w d m a n o d m :

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 7 - e a n e d r e l u [ A d HTRC/HB 252 A.

and (2) a municipality shall not acquire any electricity generation [or ] facility, transmission facility or energy storage facility project unless the school districts within the municipality in which the project is located receive h u annual in-lieu tax payments;

provided that the annual in-lieu » r t h tax payments required by this paragraph shall be:

gHTRC/HB e252/a lPage i7 (a) payable to the school districts for h r i s h , the period the municipality owns and leases the project;

e h t u g (b) in an aggregate amount equal to the e b l e e , gh amount received by the municipality multiplied by the npercentage ddetermined dby idividing =the =average oof hmills limposed ]by bthe ,dschool percentagedistricts determinedwithin bythe dividingmunicipality theplus averagestate ofdebt service mills imposedas iof athe ºdate rof eissuance rof =the bonds by the schoolaverage districtsof within the municipalitymills plusimposed stateby debtall tentities elevying wtaxes don mproperty ain nthe omunicipality das mof :such date;

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 8 - e a n e d r e l u [ A d HTRC/HB 252 service mills as of the date of issuance of the bonds by the average of the mills imposed by all entities levying taxes on property in the municipality as of such date;

and h u (d) for each individual school district »HTRC/HB r252/a tPage h8 located within the municipality, no less than the amount due to g e l i the school district in the tax year immediately preceding the h r i s h , issuance of the bonds from the property included in a project, e h t u g had such project not been created;

e b l e e , gh B.

to sell or lease or otherwise dispose of any or n d d i = = o h l ] b ,d all of its projects upon such terms and conditions as the i a º r e r = governing body may deem advisable and as shall not conflict twith ethe wprovisions dof mthe aIndustrial nRevenue oBond dAct; m :

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 9 - e a n e d r e l u [ A d HTRC/HB 252 with the provisions of the Industrial Revenue Bond Act;

to refinance one or more hospital or 501(c)(3) corporation projects and to acquire any such hospital or 501(c)(3) corporation project whether by construction, purchase, gift or lease, which hospital or 501(c)(3) corporation project shall be located within this state and may be located within or without the municipality or partially within or partially without the municipality, but which shall not be located more than fifteen miles outside of the corporate limits of the municipality, and to issue revenue bonds to h u refinance and acquire a hospital or 501(c)(3) corporation » r t h project and to secure the payment of suchHTRC/HB bonds,252/a allPage as9 gsuch ebonds, lall ias provided in the Industrial Revenue Bond Act.

A municipality h r i s h , shall not have the power to operate a hospital or 501(c)(3) e h t u g corporation project as a business or in any manner except as e b l e e , gh lessor;

and n d d i = = o h l ] b ,d E.

to refinance one or more projects of any private i a º r e r = institution of higher education and to acquire any such tproject, ewhether wby dconstruction, mpurchase, agift nor olease; d m :

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 10 - e a n e d r e l u [ A d HTRC/HB 252 project, whether by construction, purchase, gift or lease;

h u A.

"commission" means the governing body of a » r t h county;

g e l i B.

"county" means a county organized or hHTRC/HB r252/a iPage s10 h , incorporated in New Mexico;

e h t u g C.

"501(c)(3) corporation" means a corporation that e b l e e , gh demonstrates to the taxation and revenue department that it has n d d i = = o h l ] b ,d been granted exemption from the federal income tax as an i a º r e r = organization described in Section 501(c)(3) of the Internal tRevenue eCode wof d1986, mas aamended nor orenumbered; d m :

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 11 - e a n e d r e l u [ A d HTRC/HB 252 Revenue Code of 1986, as amended or renumbered;

"project" means any land and building or other improvements thereon, the acquisition by or for a New Mexico corporation of the assets or stock of an existing business or corporation located outside the state to be relocated within a county but, except as provided in Paragraph (1) of Subsection A of Section 4-59-4 NMSA 1978, not within the boundaries of any incorporated municipality in the state, and all real and h u personal properties deemed necessary in connection therewith, » r t h whether or not now in existence, that shall be suitable for use g e l i by the following or by any combination of two or more thereof:

hHTRC/HB r252/a iPage s11 h , (1) an industry for the manufacturing, e h t u g processing or assembling of agricultural or manufactured e b l e e , gh products;

n d d i = = o h l ] b ,d (2) a commercial enterprise that has received i a º r e r = a permit from the energy, minerals and natural resources tdepartment efor wa dmine mthat ahas nnot obeen din moperation :prior to the issuance of bonds for the project for which the enterprise will be involved;

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 12 - e a n e d r e l u [ A d HTRC/HB 252 department for a mine that has not been in operation prior to the issuance of bonds for the project for which the enterprise will be involved;

[and ] (b) [any ] an electric generation or h u transmission facility, other than one for which both location » r t h approval and a certificate of convenience and necessity are g e l i required prior to commencing construction or operation of the h r i s h , facility, pursuant to the Public Utility Act;

and eHTRC/HB h252/a tPage u12 g (c) an energy storage facility, which is e b l e e , gh a facility that uses mechanical, chemical, thermal, kinetic or n d d i = = o h l ] b ,d other processes to store energy for release at a later time to i a º r e r = integrate energy supply associated with renewable generation tacross ethe welectric dgrid; m a n o d m :

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 13 - e a n e d r e l u [ A d HTRC/HB 252 across the electric grid;

"property" means any land, improvements thereon, h g buildings and any improvements thereto, machinery and equipment o t hr of any and all kinds necessary to the project, operating g e i k h r capital and any other personal properties deemed necessary in i s h connection with the project." , t, e u g SECTION 4.

Section 4-59-4 NMSA 1978 (being Laws 1975, eHTRC/HB b252/a lPage e13 e h Chapter 286, Section 4, as amended) is amended to read:

n d d i = = o h l ] b ,d "4-59-4.

ADDITIONAL POWERS CONFERRED ON COUNTIES.--In i a º e r i = r addition to any other powers that it may now have, each county tshall ehave wthe dfollowing mpowers: a n o d m :

b e d s º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 14 - e a n e d r e l u [ A d HTRC/HB 252 shall have the following powers:

and (2) a county shall not acquire any electricity generation [or ] facility, transmission facility or energy storage facility project unless the school districts within the county in which the project is located receive annual in-lieu tax payments;

(a) payable to the school districts for h u the period the county owns and leases the project;

» r t h (b) in an aggregate amount equal to the g e l i amount received by the county multiplied by the percentage h r i s h , determined by dividing the average of all of the mills imposed e h t u g by the school districts in the county, including the operating, e b l e e , gh capital improvement, building improvement, educationHTRC/HB technology252/a nPage d14 deducation itechnology = = o h l ] b ,d and bond mills imposed by the school districts in the county i a º r e r = plus state debt service mills as of the date of issuance of the tbonds eby wthe daverage mof athe nmills oimposed dby mall :entities levying taxes on property in the county as of such date;

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 15 - e a n e d r e l u [ A d HTRC/HB 252 bonds by the average of the mills imposed by all entities levying taxes on property in the county as of such date;

and (d) for each individual school district h u located within the county, no less than the amount due to the » r t h school district in the tax year immediately preceding the g e l i issuance of the bonds from the property included in a project, h r i s h , had such project not been created;

e h t u g B.

to sell or lease or otherwise dispose of any or e b l e e , gh all of its projects upon such terms and conditions as the nHTRC/HB d252/a dPage i15 = = o h l ] b ,d commission may deem advisable and as shall not conflict with i a º r e r = the provisions of the County Industrial Revenue Bond Act;

and tC. e w d m a n o d m :

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 16 - e a n e d r e l u [ A d HTRC/HB 252 C.

INDIVIDUAL INCOME TAX RATES.--The tax imposed by Section 7-2-3 NMSA 1978 shall be at the following rates for any taxable year beginning on or after January 1, [2021 ] 2025:

[A.A.

For married individuals filing separatejoint returns:returns, heads of household and surviving spouses:

If the taxable income is:

The tax shall be:

Not over $4,000 1.7% of taxable income Over $4,000 but not over $8,000 $68.00 plus 3.2% of h g excess over $4,000 o t hr Over $8,000 but not over $12,000 $196 plus 4.7% of g e i k h r excess over $8,000 i s h Over $12,000 but not over $157,500 $384 plus 4.9% of , t, e u g excess over $12,000 e b l e e h Over $157,500 $7,513.50 plus 5.9% of n d d i = = o h l ] b ,d excess over $157,500.

i a º e r i = r B.

For heads of household, surviving spouses and t e w d m a n o d m :

b e d s º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 17 - e a n e d r e l u [ A d HTRC/HB 252 married individuals filing joint returns:

If the taxable income is:

The tax shall be:

Not over $8,000 1.7% of taxable income Over $8,000 but not over $16,000 $136 plus 3.2% of excess over $8,000 Over $16,000 but not over $24,000 $392 plus 4.7% of excess over $16,000 Over $24,000 but not over $315,000 $768 plus 4.9% of excess over $24,000 Over $315,000 $15,027 plus 5.9% of excess over $315,000.

C.

For single individuals and for estates and trusts:

If the taxable income is:

The tax shall be:

Not over $5,500 1.7% of taxable income Over $5,500 but not over $11,000 $93.50 plus 3.2% of h g excess over $5,500 o t hr Over $11,000 but not over $16,000 $269.50 plus 4.7% of g e i k h r excess over $11,000 i s h Over $16,000 but not over $210,000 $504.50 plus 4.9% of , t, e u g excess over $16,000 e b l e e h Over $210,000 $10,010.50 plus 5.9% of n d d i = = o h l ] b ,d excess over $210,000.] i a º e r i = r A.

For married individuals filing joint returns, t e w d m a n o d m :

b e d s º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 18 - e a n e d r e l u [ A d HTRC/HB 252 heads of household and surviving spouses:

Not over $8,000 1.5% of taxable income Over $8,000 but not over $25,000 $120 plus 3.2% of excess over $8,000 Over $25,000 but not over $50,000 $664 plus 4.3% of excess over $25,000 Over $50,000 but not over $100,000 $1,739 plus 4.7% of excess over $50,000 Over $100,000 but not over $315,000 $4,089 plus 4.9% of excess over $100,000 HTRC/HB 252/a Page 16 Over $315,000 $14,624 plus 5.9% of excess over $315,000.

h g Not over $5,500 1.5% of taxable income o t hr Over $5,500 but not over $16,500 $82.50 plus 3.2% of g e i k h r excess over $5,500 i s h Over $16,500 but not over $33,500 $434.50 plus 4.3% of , t, e u g excess over $16,500 e b l e e h Over $33,500 but not over $66,500 $1,165.50 plus 4.7% of n d d i = = o h l ] b ,d excess over $33,500 i a º e r i = r Over $66,500 but not over $210,000 $2,716.50 plus 4.9% of texcess eover w$66,500 dOver m$210,000 a$9,748 nplus o5.9% dof mexcess :over $210,000.

b e d s º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 19 - e a n e d r e l u [ A d HTRC/HB 252 excess over $66,500 Over $210,000 $9,748 plus 5.9% of excess over $210,000.

Not over $4,000 1.5% of taxable income Over $4,000 but not over $12,500 $60.00 plus 3.2% of excess over $4,000 Over $12,500 but not over $25,000 $332 plus 4.3% of excess over $12,500 Over $25,000 but not over $50,000 $869.50 plus 4.7% of HTRC/HB 252/a Page 17 excess over $25,000 Over $50,000 but not over $157,500 $2,044.50 plus 4.9% of excess over $50,000 Over $157,500 $7,312 plus 5.9% of excess over $157,500.

h g D.

The tax on the sum of any lump-sum amounts o t hr included in net income is an amount equal to five multiplied by g e i k h r the difference between:

i s h (1) the amount of tax due on the taxpayer's , t, e u g taxable income;

and e b l e e h (2) the amount of tax that would be due on an n d d i = = o h l ] b ,d amount equal to the taxpayer's taxable income and twenty i a º e r i = r percent of the taxpayer's lump-sum amounts included in net tincome." eSECTION w6. d m a n o d m :

b e d s º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 20 - e a n e d r e l u [ A d HTRC/HB 252 income." SECTION 6.

The tax credit provided in this HTRC/HB 252/a Page 18 section shall be known as the "angel investment credit".

(1) for not more than one qualified investment h g per investment round;

o t hr (2) for qualified investments in no more than g e i k h r five qualified businesses per taxable year;

and i s h (3) for a qualified investment made on or , t, e u g before December 31, [2025 ] 2030.

e b l e e h C.

A taxpayer may apply for an angel investment n d d i = = o h l ] b ,d credit by submitting a completed application to the [taxationdepartment ion aforms ºand ein ra imanner =required rby andthe revenue] department onno formslater andthan inone ayear mannerfollowing requiredthe byend tof ethe wcalendar dyear min awhich nthe oqualified dinvestment mis :made.

b e d s º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 21 - e a n e d r e l u [ A d HTRC/HB 252 the department no later than one year following the end of the calendar year in which the qualified investment is made.

Applications and all subsequent materials submitted to the [taxation and revenue ] department related to the application shall also be submitted to the economic development department.

The [taxation and revenue ] department shall allow a maximum annual aggregate of two million dollars ($2,000,000) in angel HTRC/HB 252/a Page 19 investment credits per calendar year.

Completed applications shall be considered in the order h g received.

Applications for credits that would have been o t hr allowed but for the limit imposed by this subsection shall be g e i k h r allowed in subsequent calendar years.

i s h G.

The [taxation and revenue ] department shall , t, e u g report annually to the revenue stabilization and tax policy e b l e e h committee and the legislative finance committee on the n d d i = = o h l ] b ,d utilization and effectiveness of the angel investment credit.

i a º e r i = r The report shall include, at a minimum:

the number of taccredited einvestors wdetermined dto mbe aeligible nfor othe dcredit min :the previous year;

b e d s º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 22 - e a n e d r e l u [ A d HTRC/HB 252 accredited investors determined to be eligible for the credit in the previous year;

Married individuals 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 HTRC/HB 252/a Page 20 been allowed on a joint return.

h u J.

The angel investment credit may only be deducted » r t h from the taxpayer's income tax liability.

Any portion of the g e l i tax credit provided by this section that remains unused at the h r i s h , end of the taxpayer's taxable year may be carried forward for e h t u g five consecutive years.

e b l e e , gh K.

n d d i = = o h l ] b ,d (1) "accredited investor" means a person who i a º r e r = is an accredited investor within the meaning of Rule 501 issued tby ethe wfederal dsecurities mand aexchange ncommission opursuant dto mthe :federal Securities Act of 1933, as amended;

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 23 - e a n e d r e l u [ A d HTRC/HB 252 by the federal securities and exchange commission pursuant to the federal Securities Act of 1933, as amended;

(4) "investment round" means an offer and sale of securities and all other offers and sales of securities that would be integrated with such offer and sale ofHTRC/HB securities252/a hPage u21 of securities under Regulation D issued by the federal securities and » r t h exchange commission pursuant to the federal Securities Act of g e l i 1933, as amended;

h r i s h , (5) "manufacturing" means combining or e h t u g processing components or materials to increase their value for e b l e e , gh sale in the ordinary course of business, but does not include:

n d d i = = o h l ] b ,d (a) construction;

i a º r e r = (b) farming;

t(c) eprocessing wnatural dresources, mincluding ahydrocarbons; n o d m :

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 24 - e a n e d r e l u [ A d HTRC/HB 252 (c) processing natural resources, including hydrocarbons;

credit or finance services, including banks, savings and loan associations, credit unions, small loan hHTRC/HB u252/a Page 22 companies or title loan companies;

financial brokering or » r t h investment;

professional services, including accounting, legal g e l i services, engineering and any other service the practice of h r i s h , which requires a license;

construction e h t u g or construction contracting;

e b l e e , gh wholesale or retail trade;

providing utility service, including n d d i = = o h l ] b ,d water, sewerage, electricity, natural gas, propane or butane;

i a º r e r = publishing, including publishing newspapers or other tperiodicals; e w d m a n o d m :

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 25 - e a n e d r e l u [ A d HTRC/HB 252 periodicals;

(7) "qualified investment" means a cash hHTRC/HB u252/a Page 23 investment in a qualified business for equity, but does not » r t h include an investment by a taxpayer if the taxpayer, a member g e l i of the taxpayer's immediate family or an entity affiliated with h r i s h , the taxpayer receives compensation from the qualified business e h t u g in exchange for services provided to the qualified business e b l e e , gh within one year of investment in the qualified business;

and n d d i = = o h l ] b ,d (8) "qualified research" means "qualified i a º r e r = research" as defined by Section 41 of the Internal Revenue tCode." eSECTION w7. d m a n o d m :

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 26 - e a n e d r e l u [ A d HTRC/HB 252 Code." SECTION 7.

[TAX CREDIT ] RURAL HEALTH CARE PRACTITIONER TAX CREDIT.-- A.

HTRC/HB 252/a Page 24 (1) five thousand dollars ($5,000) for all h g [eligible] physicians, osteopathic physicians, dentists, o t hr [clinical] psychologists, [podiatrists] podiatric physicians g e i k h r and optometrists who qualify pursuant to the provisions of this i s h section [except the credit shall not exceed ] and have provided , t, e u g health care during a taxable year for at least one thousand e b l e e h five hundred eighty-four hours at a practice site located in an n d d i = = o h l ] b ,d approved rural health care underserved area.

Eligible health i a º e r i = r care practitioners listed in this paragraph who provided health tcare eservices wfor dat mleast seven hundred ninety-two hours but less than one thousand five hundred eighty-four hours at a npractice osite dlocated min :an approved rural health care underserved area during a taxable year are eligible for one- half of the tax credit amount;

band e(2) dthree sthousand ºdollars o($3,000) tfor nall =pharmacists, .227958.3AICdental Februaryhygienists, 12,physician 2024assistants, (9:39am)certified sregistered knurse manesthetists, ecertified -nurse 27practitioners, -clinical enurse aspecialists, nregistered enurses, dmidwives, rlicensed eclinical lsocial uworkers, [licensed Aindependent dsocial HTRC/HBworkers, 252professional caremental serviceshealth forcounselors, atprofessional leastclinical sevenmental hundredhealth ninety-twocounselors, hoursmarriage butand lessfamily thantherapists, oneprofessional thousandart fivetherapists, hundredalcohol eighty-fourand hoursdrug atabuse acounselors practiceand sitephysical locatedtherapists inwho anqualify approvedpursuant ruralto healththe careprovisions underservedof areathis section and have provided health care during a taxable year arefor eligibleat forleast one-one halfthousand offive thehundred taxeighty-four credithours amount;at a practice site HTRC/HB 252/a Page 25 located in an approved rural health care underserved area.

andEligible (2) three thousand dollars ($3,000) for all [eligible ] pharmacists, dental hygienists, physician assistants, [certified nurse-midwives ] certified registered nurse anesthetists, certified nurse practitioners, [and ] clinical nurse specialists, registered nurses, midwives, licensed clinical social workers, licensed independent social workers, professional mental health counselors,care professionalpractitioners clinicallisted mentalin healththis counselors,paragraph marriage and family therapists, professional art therapists, alcohol and drug abuse counselors and physical therapists who qualify pursuant to the provisions of this section and have provided health care duringservices hfor uat aleast taxableseven yearhundred forninety-two athours leastbut less than one thousand five hundred eighty-eighty-four » r t h four hours at a practice site located in an approved rural ghealth ecare lunderserved iarea healthduring carea underservedtaxable area.year are eligible for one-half of the tax credit amount.

EligibleC. health care h r i s h , practitioners listed in this paragraph who provided health care e h t u g services for at least seven hundred ninety-two hours but less e b l e e , gh than one thousand five hundred eighty-four hours at a practice n d d i = = o h l ] b ,d site located in an approved rural health care underserved area i a º r e r = during a taxable year are eligible for one-half of the tax t e w d m a n o d m :

bBefore ran eeligible thealth ºcare opractitioner tmay nclaim =the .227958.3AICrural Februaryhealth 12,care 2024practitioner (9:39am)tax scredit, kthe mpractitioner eshall -submit 28an -application eto athe ndepartment eof dhealth rthat edescribes lthe upractitioner's [clinical Apractice dand HTRC/HBcontains 252additional creditinformation amountthat .the department of health may require.

[C.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.

ToThe qualifydepartment forof health shall provide the ruraltaxation healthand carerevenue practitionerdepartment taxappropriate credit,information anfor all eligible health care practitionerpractitioners shallto havewhom providedcertificates healthare careissued duringin a taxablesecure yearmanner foron atregular leastintervals twoagreed thousandupon eightyby hoursboth atthe ataxation practiceand siterevenue locateddepartment inand anthe approveddepartment ruralof healthhealth. care underserved area.

AnD. 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.]A C.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 HTRC/HB 252/a Page 26 tax return for the taxable year.

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 h u may require.

The department of health shall determine whether » r t h an eligible health care practitioner qualifies for the rural g e l i health care practitioner tax credit and shall issue a h r i s h , certificate to each qualifying eligible health care e h t u g practitioner.

The department of health shall provide the e b l e e , gh taxation and revenue department appropriate information for all n d d i = = o h l ] b ,d eligible health care practitioners to whom certificates are i a º r e r = issued in a secure manner on regular intervals agreed upon by t e w d m a n o d m :

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 29 - e a n e d r e l u [ A d HTRC/HB 252 both the taxation and revenue department and the department of health.

[E.] D.

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.

The department shall compile an annual report on the tax credit provided by this section that shall include the number of taxpayers approved by the department to receive the credit, the aggregate amount of credits approved and any other h g information necessary to evaluate the credit.

The department o t hr shall present the report to the revenue stabilization and tax g e i k h r policy committee and the legislative finance committee with an i s h analysis of the cost of the tax credit.

, t, e u g [F.] G.

e b l e e h (1) "eligible health care practitioner" means:

n(a) da ddentist ior =dental =hygienist o h l ] b ,d [(a) a certified nurse-midwife licensed ipursuant ato º e r i = r by the boardDental ofHealth nursingCare asAct; a registered nurse and licensed by t e w d m a n o d m :

b e d s º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 30 - e a n e d r e l u [ A d HTRC/HB 252 the public health division of the department of health to practice nurse-midwifery as a certified nurse-midwife;

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

1) 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 HTRC/HB 252/a Page 27 certified nurse-midwife;

(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 h g provisions of the [Osteopathic Physicians' Assistants ] Medical o t hr Practice Act;

g e i k h r (e) a physician [or physician assistant ] i s h licensed pursuant to the provisions of [Chapter 61, Article 6 , t, e u g NMSA 1978] the Medical Practice Act or a physician assistant e b l e e h licensed pursuant to the provisions of the Physician Assistant n d d i = = o h l ] b ,d Act;

i a º e r i = r (f) a [podiatrist ] podiatric physician tlicensed epursuant wto dthe mprovisions aof nthe oPodiatry dAct; m :

b(g) e d s º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 31 - e a npsychologist e d r e l u [ A d HTRC/HB 252 licensed pursuant to the provisions of the PodiatryProfessional Psychologist Act;

(g)(h) a [clinicalregistered ]nurse psychologist licensed pursuant to the provisions of the ProfessionalNursing PsychologistPractice 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] licensed pursuant to the provisions of the Nursing Practice Act;

(j) a licensed clinical social worker or a licensed independent social worker licensed pursuant to the h g provisions of the Social Work Practice Act;

o t hr (k) a professional mental health g e i k h r counselor, a professional clinical mental health counselor, a i s h marriage and family therapist, an alcohol and drug abuse ,HTRC/HB t,252/a ePage u28 g counselor or a professional art therapist licensed pursuant to e b l e e h the provisions of the Counseling and Therapy Practice Act;

and n d d i = = o h l ] b ,d (l) a physical therapist licensed i a º e r i = r pursuant to the provisions of the Physical Therapy Act;

t(2) e"health wcare dunderserved marea" means a ngeographic oarea dor mpractice :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;

b e d s º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 32 - e a n e d r e l u [ A d HTRC/HB 252 (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;

and (4) "rural" means [an area or location identified by the department of health as falling outside of an urban area] a rural county or an unincorporated area of a partially rural county, as designated by the health resources and services administration of the United States department of health and human services." SECTION 8.

Section 7-2-34 NMSA 1978 (being Laws 1999, h g Chapter 205, Section 1, as amended) is amended to read:

o t hr "7-2-34.

DEDUCTION--NET CAPITAL GAIN INCOME.-- g e i k h r A.

[Except as provided in Subsection C of this i s h section] A taxpayer may claim a deduction from net income in an , t, e u g amount equal to the greater of:

e b l e e h (1) the taxpayer's net capital gain income forHTRC/HB n252/a dPage d29 ifor = = o h l ] b ,d the taxable year for which the deduction is being claimed, but i a º e r i = r not to exceed [one thousand dollars ($1,000) ] two thousand five thundred edollars w($2,500); d m a n o d m :

b e d s º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 33 - e a n e d r e l u [ A d HTRC/HB 252 hundred dollars ($2,500) ;

[C.C.

AAs taxpayerused mayin notthis claimsection, the"net deductioncapital providedgain" inmeans Subsection"net Acapital ofgain" thisas sectiondefined ifin theSection taxpayer1222 has(11) claimedof the creditInternal providedRevenue inCode." SectionSECTION 7-2D-8.19. NMSA 1978.

D.]A C.new section of the Income Tax Act is enacted to read:

As"HOME usedFIRE inRECOVERY thisINCOME section,TAX "netCREDIT.-- capitalA. gain" means "net capital gain" as defined in Section 1222 (11) of the h g Internal Revenue Code." o t hr SECTION 9.

A newtaxpayer who is not a dependent of another individual and who, beginning on the effective date of this section and prior to January 1, 2030, incurs qualified home expenditures for a home in New Mexico to replace a prior home of the taxpayer that was destroyed by a wildfire in calendar HTRC/HB 252/a Page 30 years 2021 through 2023 may claim a tax credit against the taxpayer's tax liability imposed pursuant to the Income Tax Act isin gan eamount iequal kto hthe rqualified enactedhome expenditures incurred by the taxpayer not to read:exceed fifty thousand dollars ($50,000) per home.

i s h "[NEW MATERIAL ] HOME FIRE RECOVERY INCOME TAX CREDIT.-- , t, e u g A.

A taxpayer who is not a dependent of another e b l e e h individual and who, beginning on the effective date of this n d d i = = o h l ] b ,d section and prior to January 1, 2030, incurs qualified i a º e r i = r STBTCº site-built»STBTC home expenditures for a home in New t e w d m a n o d m :

b e d s º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 34 - e a n e d r e l u [ A d HTRC/HB 252 Mexico to replace a prior home of the taxpayer that was destroyed by a wildfire in calendar years 2021 through 2023 may claim a tax credit against the taxpayer's tax liability imposed pursuant to the Income Tax Act in an amount equal to the qualified STBTCº site-built»STBTC home expenditures incurred by the taxpayer not to exceed fifty thousand dollars ($50,000) per home.

An application for certification shall be made no later than twelve months after the calendar year in h g which construction of the STBTCº site-built»STBTC home is o t hr completed.

Completed applications shall be considered in the g e i k h r order received.

If a taxpayer submits an application for the i s h tax credit and the aggregate amount of certifications has been , t, e u g met for the calendar year, the application shall be placed at e b l e e h n d d i the front of a queue for certification in a subsequent calendar = = o h l ] b ,d year.

Except as otherwise provided in Subsections F and G of i a º e r i = r this section, only one tax credit shall be certified per ttaxpayer. e w d m a n o d m :

b e d s º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 35 - e a n e d r e l u [ A d HTRC/HB 252 taxpayer.

HTRC/HB 252/a Page 31 (1) proof that the taxpayer's prior home was destroyed by wildfire in calendar years 2021 through 2023, including a sworn statement by the taxpayer;

(2) proof that the taxpayer incurred expenditures for the construction of a STBTCº site-built»STBTC home on the same property of the taxpayer's prior, wildfire-wildfire-destroyed destroyed home, including a contract with a builder STBTCºoror manufacturer»STBTCmanufacturer; ;

(3) a sworn statement by the taxpayer and the builder STBTCºofor the site-built home that the construction of a new site-built»STBTC STBTCºor manufacturer of the home that the construction of the»STBTCthe home has been completed and stating the date of its completion;

and h u (4) any additional information the » r t h construction industries division of the regulation and g e l i licensing department may require to determine eligibility for h r i s h , the tax credit.

e h t u g D.

If the construction industries division of the e b l e e , gh regulation and licensing department determines that the n d d i = = o h l ] b ,d taxpayer meets the requirements of this section, the division ishall issue a ºdated rcertificate eof religibility =to shallthe issuetaxpayer aproviding datedthe certificateamount of eligibilitytax tocredit for which the taxpayer tis eeligible wand dthe mtaxable ayear nin owhich dthe mcredit :may be claimed.

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 36 - e a n e d r e l u [ A d HTRC/HB 252 providing the amount of tax credit for which the taxpayer is eligible and the taxable year in which the credit may be claimed.

HTRC/HB 252/a Page 32 E.

Married individuals filing separate returns for a taxable year for which they could have filed a joint return h u may each claim only one-half of the tax credit that would have » r t h been claimed on a joint return.

g e l i H.

A taxpayer may be allocated the right to claim h r i s h , the tax credit in proportion to the taxpayer's ownership e h t u g interest if the taxpayer owns an interest in a business entity e b l e e , gh that is taxed for federal income tax purposes as a partnership n d d i = = o h l ] b ,d or limited liability company and that business entity has met i a º r e r = all of the requirements to be eligible for the credit.

The ttotal ecredit wclaimed dby mall amembers nof othe dpartnership mor :limited liability company shall not exceed the allowable credit pursuant to this section.

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 37 - e a n e d r e l u [ A d HTRC/HB 252 total credit claimed by all members of the partnership or limited liability company shall not exceed the allowable credit pursuant to this section.

The department shall compile an annual report on the 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 HTRC/HB 252/a Page 33 information necessary to evaluate the credit.

(1) "home" means a dwelling designed for long-long-term term habitation in which the taxpayer resides for a majority of the year STBTCºand ;»STBTC STBTCºand is:

(a) constructed permanently on a h u taxpayer's property with a foundation and that cannot be moved;

» r t h or g e l i (b) a manufactured home or modular home h r i s h , that is a single-family dwelling with a heated area of at least e h t u g thirty-six by twenty-four feet and at least eight hundred e b l e e , gh sixty-four square feet and constructed in a factory to the nstandards dof dthe iUnited =States =department oof hhousing land ]urban bdevelopment, ,dthe standardsNational ofManufactured theHousing UnitedConstruction Statesand departmentSafety Standards Act of housing1974 and urbanthe iHousing aand ºUrban rDevelopment eZone rCode =2 development,or the NationalUniform Building Code, as amended to the date of the unit's construction, and installed consistent with the Manufactured Housing ConstructionAct and twith ethe wrules dmade mpursuant athereto nrelating oto dpermanent mfoundations; :

band r(2) e"qualified thome ºexpenditures" omeans tgross nexpenditures =for .227958.3AICthe Februaryconstruction 12,or 2024manufacture (9:39am)of sa kHTRC/HB m252/a ePage -34 38home -on ethe asame nproperty ein dNew rMexico ethat la utaxpayer's [prior Ahome dwas HTRC/HBdestroyed 252by Safetya Standardswildfire Actin ofcalendar 1974years and2021 thethrough Housing2023, andless Urbanany Developmentcompensation Zonerelated Codeto 2home orconstruction, themanufacture Uniformor Buildingrepair Code,costs asreceived amendedpursuant to the datefederal ofHermit's thePeak/Calf unit'sCanyon construction,Fire andAssistance installed consistent with the Manufactured Housing Act andor withfrom theinsurance rulesor madeother pursuantsource theretoof relatingcompensation." toSECTION permanent10. foundations;

and»STBTCSection (2)7-2A-5 "qualifiedNMSA STBTCº1978 site-built»STBTC(being homeLaws expenditures"1981, meansChapter gross37, expendituresSection for38, theas constructionamended) STBTCºofis aamended site-built»STBTC STBTCºor manufacture of a»STBTC home on the same property in New Mexico that a taxpayer's prior home was destroyed by a wildfire in calendar years 2021 through 2023, less any compensation related to homeread: construction STBTCº , manufacture»STBTC or repair costs received pursuant to the federal Hermit's Peak/Calf Canyon Fire Assistance Act STBTCº;

and"7-2A-5. (3) "site-built home" means a home that is h u constructed permanently on a taxpayer's property with a » r t h foundation and that cannot be moved, and excludes a g e l i h r manufactured or mobile home»STBTC STBTCºor from insurance or i s h , other source of compensation»STBTC ." e h t u g SECTION 10.

SectionCORPORATE 7-2A-5INCOME NMSATAX 1978RATES.--The (beingcorporate Lawsincome 1981,tax eimposed bon lcorporations eby eSection ,7-2A-3 ghNMSA n1978 dshall dbe ifive Chapterand 37,nine-tenths Sectionpercent 38,of astaxable amended)income." isSECTION amended11. to read:

=Section =7-9-54.3 oNMSA h1978 l(being ]Laws b2002, ,dChapter "7-2A-5.37, Section 8, as amended by Laws 2010, Chapter 77, Section 2 and by Laws 2010, Chapter 78, Section 2) is amended to read:

CORPORATE INCOME TAX RATES.--The corporate i a º r e r = income tax imposed on corporations by Section 7-2A-3 NMSA 1978 t e w d m a n o d m :

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 39 - e a n e d r e l u [ A d HTRC/HB 252 shall be [If the taxable income is:

The tax shall be:

Not over $500,000 4.8% of taxable income Over $500,000 $24,000 plus 5.9% of excess over $500,000] five and nine-tenths percent of taxable income ." STBTCºSECTION 11.

Section 7-4-10 NMSA 1978 (being Laws 1993, Chapter 153, Section 1, as amended) is amended to read:

"7-4-10.

APPORTIONMENT OF BUSINESS INCOME.--[A.

Except as provided in Subsections B and C of this section] All business income shall be apportioned to this state by multiplying the income by [a fraction, the numerator of which is the property factor plus the payroll factor plus] the sales factor [and the denominator of which is three.

B.

If eighty percent or more of the New Mexico numerators of the property and payroll factors for a filing h g group, or for a taxpayer that is not a member of a filing o t hr g e group, are employed in manufacturing or operating a computer i k h r processing facility, the filing group or the taxpayer may elect i s h to have business income apportioned to this state by , t, e u g e b l multiplying the income by the sales factor for the taxable e e h n d d i year.

= = o h l ] b ,d C.

If a filing group, or a taxpayer that is not a i a º e r i = r t e w d member of a filing group, has a headquarters operation in New m a n o d m :

b e d s º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 40 - e a n e d r e l u [ A d HTRC/HB 252 Mexico, the filing group or the taxpayer may elect to have business income apportioned to this state by multiplying the income by the sales factor for the taxable year.

D.

To elect the method of apportionment provided by Subsection B or C of this section, the taxpayer shall notify the department of the election, in writing, no later than the date on which the taxpayer files the return for the first taxable year to which the election will apply.

The election shall apply as follows:

(1) if the election is made for taxable years beginning prior to January 1, 2020, to the taxable year in which the election is made and to each taxable year thereafter for three years, or until the taxable year ending prior to January 1, 2020, whichever is earlier;

(2) if the election is made for a taxable year beginning on or after January 1, 2020, to the taxable year in h u which the election is made and to each taxable year thereafter » r t h until the taxpayer notifies the department, in writing, that g e l i h r the election is terminated, except that the taxpayer shall not i s h , terminate the election until the method of apportioning e h t u g e b l business income provided by Subsection B or C of this section e e , gh n d d i has been used by the taxpayer for at least three consecutive = = o h l ] b ,d taxable years, including a total of at least thirty-six i a º r e r = t e w d calendar months;

and m a n o d m :

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 41 - e a n e d r e l u [ A d HTRC/HB 252 (3) if the election is made by a qualifying filing group, the election shall apply to the members of the filing group properly included pursuant to Section 7-2A-8.3 NMSA 1978.

E.

For purposes of this section:

(1) "filing group" means "filing group" as that term is defined in the Corporate Income and Franchise Tax Act;

(2) "headquarters operation" means:

(a) the center of operations of a business:

1) where corporate staff employees are physically employed;

2) where the centralized functions are primarily performed, including administrative, planning, managerial, human resources, purchasing, information technology and accounting, but not including operating a call center;

3) the function and purpose of which is to manage and direct most h u aspects and functions of the business operations within a » r t h subdivided area of the United States;

4) from which final g e l i h r authority over regional or subregional offices, operating i s h , facilities and any other offices of the business are issued;

e h t u g e b l and 5) including national and regional headquarters if the e e , gh n d d i national headquarters is subordinate only to the ownership of = = o h l ] b ,d the business or its representatives and the regional i a º r e r = t e w d headquarters is subordinate to the national headquarters;

or m a n o d m :

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 42 - e a n e d r e l u [ A d HTRC/HB 252 (b) the center of operations of a business:

1) the function and purpose of which is to manage and direct most aspects of one or more centralized functions;

and 2) from which final authority over one or more centralized functions is issued;

(3) "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) power generation;

provided that for taxable years beginning prior to January 1, 2024, "manufacturing" includes electricity generation at a facility that does not require location approval and a certificate of convenience and necessity prior to commencing construction or operation of the facility pursuant to the Public Utility Act;

h g (d) processing natural resources, o t hr g e including hydrocarbons;

or i k h r (e) processing or preparation of meals i s h for immediate consumption;

and , t, e u g e b l (4) "operating a computer processing facility" e e h n d d i means managing the necessary and ancillary activities for the = = o h l ] b ,d operation of a facility primarily used to process data or i a º e r i = r t e w d information, but does not include managing the operation of m a n o d m :

b e d s º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 43 - e a n e d r e l u [ A d HTRC/HB 252 facilities that are predominantly used to support sales of tangible property or the provision of banking, financial or professional services]." SECTION 12.

Section 7-4-19 NMSA 1978 (being Laws 1965, Chapter 203, Section 19, as amended) is amended to read:

"7-4-19.

EQUITABLE ADJUSTMENT OF STANDARD ALLOCATION OR APPORTIONMENT.--If the allocation and apportionment provisions of the Uniform Division of Income for Tax Purposes Act do not fairly represent the extent of the taxpayer's business activity in this state, the taxpayer may petition for, or the department may require, in respect to all or any part of the taxpayer's business activity, if reasonable:

A.

separate accounting;

[B.

the exclusion of any one or more of the factors;

C.

the inclusion of one or more additional factors h g which will fairly represent the taxpayer's business activity in o t hr g e this state] or i k h r [D.] B.

the employment of any other method to i s h effectuate an equitable allocation and apportionment of the , t, e u g e b l taxpayer's income."»STBTC e e h n d d i SECTION STBTCº 13.»STBTC STBTCº11.»STBTC Section = = o h l ] b ,d 7-9-54.3 NMSA 1978 (being Laws 2002, Chapter 37, Section 8, as i a º e r i = r t e w d amended by Laws 2010, Chapter 77, Section 2 and by Laws 2010, m a n o d m :

b e d s º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 44 - e a n e d r e l u [ A d HTRC/HB 252 Chapter 78, Section 2) is amended to read:

DEDUCTION--GROSS RECEIPTS TAX--WIND AND SOLAR GENERATION EQUIPMENT--ENERGY STORAGE EQUIPMENTEQUIPMENT--SALES --SALES TO GOVERNMENTS.-- A.

Prior to July 1, 20342034, , receipts from selling wind generation equipment or solar generation equipment to a government for the purpose of installing a wind or solar electric generation facility may be deducted from gross receipts.

[The deduction allowed pursuant to this section shall not be claimed for receipts from an expenditure for which a taxpayer claims a credit pursuant to Section 7-2-18.25, 7-2A-25 or 7-9G-2 NMSA 1978] Prior to July 1, 2034, receipts from selling HTRC/HB 252/a Page 35 energy storage equipment or related equipment to a government for the purpose of installing an energy storage facility may be deducted from gross receipts.

h g C.

o t hr (1) "energy storage equipment" means equipment g e i k h r that is installed for the purpose of storing electric energy in i s h an energy storage facility that uses mechanical, chemical, , t, e u g thermal, kinetic or other processes to store energy for release e b l e e h at a later time to integrate energy supply associated with n d d i = = o h l ] b ,d renewable generation across the electric grid;

i(2) a"government" ºmeans ethe rUnited iStates =or rthe [(1)]state (2)or "government"a meansgovernmental theunit Unitedor Statesa tsubdivision, eagency, wdepartment dor minstrumentality aof nthe ofederal dgovernment mor :the state;

b(3) e"related dequipment" smeans ºtransformers, opower tconversion nequipment, =circuit .227958.3AICbreakers Februaryand 12,switching 2024and (9:39am)metering sequipment kused mto econnect: - 45 - e a n e d r e l u [ A d HTRC/HB 252 or the state or a governmental unit or a subdivision, agency, department or instrumentality of the federal government or the state;

[(2)] (3) "related equipment" means transformers, power conversion equipment , circuit breakers and switching and metering equipment used to connect:

[(3)] (4) "solar generation equipment" means solar thermal energy collection, concentration and heat HTRC/HB 252/a Page 36 transfer and conversion equipment;

turbines and associated electrical generating equipment used to generate electricity from solar thermal h g energy;

and o t hr [(4)] (5) "wind generation equipment" means g e i k h r wind generation turbines, blades, nacelles, rotors and i s h supporting structures used to generate electricity from wind , t, e u g and related equipment." e b l e e h SECTION STBTCº12. 14.»STBTC STBTCº12.»STBTC A new section n d d i = = o h l ] b ,d of the Gross Receipts and Compensating Tax Act is enacted to i a º e r i = r read:

tA enew wsection dof mthe aGross nReceipts oand dCompensating mTax :Act is enacted to read:

b"DEDUCTION--GROSS e d s º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 46 - e a n e d r e l u [ A d HTRC/HB 252 "[NEW MATERIAL ] DEDUCTION--GROSS RECEIPTS TAX--TAX--ENVIRONMENTAL ENVIRONMENTAL MODIFICATIONS FOR MEDICAID RECIPIENTS.-- A.

Prior to July 1, 2034, receipts of an eligible provider for environmental STBTCºmodifications modification services»STBTC STBTCºmodifications»STBTC reimbursed by the medical assistance division may be deducted from gross receipts.

(2) "environmental modifications" include HTRC/HB 252/a Page 37 the purchasing and installing of equipment or making physical adaptions to a recipient's residence that are necessary to ensure the health, welfare and safety of the recipient or h g enhance the recipient's access to the home environment and o t hr increase the recipient's ability to act independently;

g e i k h r (3) "medicaid" means the medical assistance i s h program established pursuant to Title 19 of the federal Social , t, e u g Security Act and regulations issued pursuant to that act;

e b l e e h n d d i (4) "medical assistance division" means the = = o h l ] b ,d medical assistance division of the health care authority i a º e r i = r department;

and t(5) e"recipient" wmeans da mperson awhom nthe omedical dassistance mdivision :has determined to be eligible to receive medicaid-related services and who meets the financial and medical level of care criteria to receive medical assistance division services through one of the division's waiver programs granted by the federal department of health and human services." SECTION 13.

b e d s º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 47 - e a n e d r e l u [ A d HTRC/HB 252 (5) "recipient" means a person whom the medical assistance division has determined to be eligible to receive medicaid-related services and who meets the financial and medical level of care criteria to receive medical assistance division services through one of the division's waiver programs granted by the federal department of health and human services." SECTION STBTCº 15.»STBTC STBTCº13.»STBTC A new section of the Gross Receipts and Compensating Tax Act is enacted to read:

"[NEW"DEDUCTIONS--GROSS MATERIAL ] DEDUCTIONS--GROSS RECEIPTS--CHILD CARE ASSISTANCE THROUGH A LICENSED CHILD CARE ASSISTANCE PROGRAM--PROGRAM--PRE- PRE-KINDERGARTENKINDERGARTEN SERVICES BY FOR-PROFIT PRE-KINDERGARTEN PROVIDERS.-- HTRC/HB 252/a Page 38 A.

Receipts from the sale of child care assistance services by a taxpayer pursuant to a contract or grant with the h u early childhood education and care department to provide such » r t h services through a licensed child care assistance program may g e l i be deducted from gross receipts.

h r i s h , B.

Receipts of for-profit pre-kindergarten e h t u g providers for the sale of pre-kindergarten services pursuant to e b l e e , gh the Pre-Kindergarten Act may be deducted from gross receipts.

n d d i = = o h l ] b ,d C.

A taxpayer allowed a deduction pursuant to this i a º r e r = section shall report the amount of the deduction separately in t e w d m a nmanner orequired dby mthe :department.

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 48 - e a n e d r e l u [ A d HTRC/HB 252 a manner required by the department.

(1) "child care assistance" means "child care assistance" or "early childhood care assistance", as those terms are defined in the Early Childhood Care HTRC/HB 252/a Page 39 Accountability Act;

and (2) "licensed child care assistance program" h g means "licensed child care program", "licensed early childhood o t hr care program" or "licensed exempt child care program", as those g e i k h r terms are defined in the Early Childhood Care Accountability i s h Act." , t, e u g STBTCº SECTION 16.14.

REPEAL.--Sections 7-4-11 through e b l e e h 7-4-15 NMSA 1978 (being Laws 1965, Chapter 203, Sections 11 n d d i = = o h l ] b ,d through 15, as amended) are repealed effective January 1, 2025.

i a º e r i = r SECTION 17.

APPLICABILITY.-- t e w d m a n o d m :

b e d s º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 49 - e a n e d r e l u [ A d HTRC/HB 252 A.

The provisions of Sections 7 and 9 of this act apply to taxable years beginning on or after January 1, 2024.

B.

The provisions of Sections 5, 8 and 10 through of this act apply to taxable years beginning on or after January 1, 2025.

SECTION 18.

EFFECTIVE DATE.-- A.

The effective date of the provisions of Sections through 4 and 13 through 15 of this act is July 1, 2024.

B.

The effective date of the provisions of Sections 5, 8 and 10 through 12 of this act is January 1, 2025.»STBTC STBTCº SECTION 14.

"[NEW"CREDIT--GROSS MATERIAL] CREDIT--GROSS RECEIPTS TAX--LEGAL SERVICES FOR WILDFIRE COMPENSATION RECOVERY.-- A.

A taxpayer who sells legal services to and at the request of a person eligible to receive compensation h g pursuant to the federal Hermit's Peak/Calf Canyon Fire o t hr g e Assistance Act may claim a tax credit against gross receipts i k h r taxes due in an amount equal to the amount of gross receipts i s h tax due on the receipt for the sale;

, t, e u g e b l (1) the legal services are directly related to e e h n d d i recovering the compensation;

= = o h l ] b ,d (2) the taxpayer did not pass the amount of i a º e r i = r t e w d gross receipts tax on to the person eligible to receive the mfederal acompensation; n o d m :

band e(3) dthe slegal ºservices owere tsold nto =a .227958.3AICperson Februarywho 12,states 2024in (9:39am)writing sin ka mmanner ethat -the 50department -may erequire athat nthe eperson dis religible eto lreceive uthe [federal Acompensation, dthe services were directly related to HTRC/HB 252252/a federalPage compensation;40 recovering the compensation and the gross receipts tax was not passed on to the person.

and (3) the legal services were sold to a person who states in writing in a manner that the department may require that the person is eligible to receive the federal compensation, the services were directly related to recovering the compensation and the gross receipts tax was not passed on to the person.

h u C.

That portion of the tax credit claimed by a » r t h taxpayer that exceeds the taxpayer's gross receipts tax g e l i h r liability in the taxable period in which the credit is claimed i s h , shall not be refunded to the taxpayer but may be carried e h t u g e b l forward for thirty-six consecutive taxable periods.

e e , gh n d d i D.

As used in this section, "legal services" means = = o h l ] b ,d services performed by a licensed attorney for a client, i a º r e r = t e w d regardless of the attorney's form of business entity or whether mthe aservices nare oprepaid, dincluding mlegal :representation before courts or administrative agencies;

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 51 - e a n e d r e l u [ A d HTRC/HB 252 the services are prepaid, including legal representation before courts or administrative agencies;

and notary public and other ancillary legal services performed for a client in conjunction with a HTRC/HB 252/a Page 41 licensed attorney.

"[NEW"CREDIT--GROSS MATERIAL] CREDIT--GROSS RECEIPTS TAX--SALE OF DYED SPECIAL FUEL USED FOR AGRICULTURAL PURPOSES.-- A.

Prior to July 1, 2029, a taxpayer who sells h u special fuel dyed in accordance with federal regulations may » r t h claim a tax credit against gross receipts taxes due in an g e l i h r amount equal to the amount of any gross receipts tax due on the i s h , receipt for sale;

e h t u g e b l (1) the taxpayer did not pass the amount of e e , gh n d d i gross receipts tax on to the person purchasing the special = = o h l ] b ,d fuel;

and i(2) the special fuel is sold to a ºperson rwho estates rin =writing tin ea wmanner dthat (2)the department may require that the person will use the special fuel isprimarily soldfor toagricultural apurposes personand whothe mgross areceipts ntax owas dnot mpassed :on to the person.

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 52 - e a n e d r e l u [ A d HTRC/HB 252 states in writing in a manner that the department may require that the person will use the special fuel primarily for agricultural purposes and the gross receipts tax was not passed on to the person.

To receive HTRC/HB 252/a Page 42 the credit, the taxpayer shall apply to the department on forms and in a manner prescribed by the department.

That portion of the tax credit claimed by a taxpayer that exceeds the taxpayer's gross receipts tax liability in the taxable period in which the credit is claimed h g shall not be refunded to the taxpayer but may be carried o t hr g e forward for thirty-six consecutive taxable periods." i k h r SECTION 16.

Section 7-29-4 NMSA 1978 (being Laws 1980, i s h Chapter 62, Section 5, as amended) is amended to read:

, t, e u g e b l "7-29-4.

OIL AND GAS SEVERANCE TAX IMPOSED--COLLECTION--IMPOSED-- eCOLLECTION--INTEREST e h n d d i INTEREST OWNER'S LIABILITY TO STATE--INDIAN LIABILITY--LIABILITY--EXCLUSIONS.-- = = o h l ] b ,d EXCLUSIONS.-- i a º e r i = r t e w d A.

There is imposed and shall be collected by the mdepartment a ntax oon dall mproducts :that are severed and sold, except as provided in Subsection B of this section.

b e d s º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 53 - e a n e d r e l u [ A d HTRC/HB 252 department a tax on all products that are severed and sold, except as provided in Subsection B of this section.

HTRC/HB 252/a Page 43 (2) on oil and on other liquid hydrocarbons removed from natural gas at or near the wellhead, except as provided in Paragraphs (3), (5), (8) and (9) of this subsection, three and three-fourths percent of taxable value 5 determined pursuant to Section 7-29-4.1 NMSA 1978;

(3) on oil and on other liquid hydrocarbons removed from natural gas at or near the wellhead produced from a qualified enhanced recovery project, one and seven-eighthsseven- eighths percent of the taxable value determined pursuant to Section h u 7-29-4.1 NMSA 1978, provided that the annual average price of » r t h west Texas intermediate crude oil, determined by the department g e l i h r by averaging the posted prices in effect on the last day of i s h , each month of the twelve-month period ending on May 31 prior to e h t u g e b l the fiscal year in which the tax rate is to be imposed, was e e , gh n d d i less than twenty-eight dollars ($28.00) per barrel;

=(4) =on othe hnatural lgas ]from ba ,dwell (4)workover onproject that is certified by the oil conservation division of the energy, minerals and natural gasresources fromdepartment ain its approval of the well workover iproject, atwo ºand rforty-five ehundredths rpercent =of tthe etaxable wvalue ddetermined projectpursuant to Section 7-29-4.1 NMSA 1978, provided that isthe certifiedannual average price of west Texas intermediate crude oil, determined by the oildepartment conservationby divisionaveraging the posted prices in effect on the last day of meach amonth nof othe dtwelve-month mHTRC/HB :252/a Page 44 period ending on May 31 prior to the fiscal year in which the tax rate is to be imposed, was less than twenty-four dollars ($24.00) per barrel;

b(5) ron ethe toil ºand oon tother nliquid =5 .227958.3AIChydrocarbons Februaryremoved 12,from 2024natural (9:39am)gas sat kor mnear ethe -wellhead 54from - e a nwell eworkover dproject rthat eis lcertified uby [the Aoil dconservation HTRC/HBdivision 252of the energy, minerals and natural resources department in its approval of the well workover project, two and forty-five hundredths percent of the taxable value determined pursuant to Section 7-29-4.1 NMSA 1978, provided that the annual average price of west Texas intermediate crude oil, determined by the department by averaging the posted prices in effect on the last day of each month of the twelve-month period ending on May 31 prior to the fiscal year in which the tax rate is to be imposed, was less than twenty-four dollars ($24.00) per barrel;

(5)(6) on the oil and on other liquid hydrocarbons removed from natural gas at or near the wellhead from a wellstripper workover project that is certified by the oil conservation division of the energy, minerals and natural resources department in its approval of the well workoverproperty, project,one two and forty-fiveseven-eighths hundredths percent of the taxable value determined pursuant to Section 7-29-4.1 NMSA 1978, h u provided that the average annual averagetaxable pricevalue of westnatural Texasgas »was requal tto hor intermediateless crudethan oil,one determineddollar byfifteen thecents department($1.15) byper gthousand ecubic lfeet i h r averaging the posted prices in effect on the lastcalendar dayyear ofpreceding eachJuly i1 s h , month of the twelve-month period ending on May 31 prior to the e h t u g e b l fiscal year in which the tax rate is to be imposed,imposed; was less e e , gh n d d i than twenty-four dollars ($24.00) per barrel;

=(7) =on othe hnatural lgas ]from ba ,dstripper (6)well onproperty, two and thirteen-sixteenths percent of the taxable HTRC/HB 252/a Page 45 value determined pursuant to Section 7-29-4.1 NMSA 1978, provided that the average annual taxable value of natural gas fromwas agreater stripperthan wellone idollar afifteen ºcents r($1.15) eper rthousand =cubic tfeet ebut wnot dmore property,than one anddollar seven-eighthsthirty-five percent5 cents ($1.35) per thousand cubic feet in the calendar year preceding July 1 of the taxablefiscal valueyear min awhich nthe otax drate mis :to be imposed;

b(8) ron ethe toil ºand oon tother nliquid =hydrocarbons .227958.3AICremoved Februaryfrom 12,natural 2024gas (9:39am)at sor knear mthe ewellhead -from 55 - e a nstripper ewell dproperty, rone eand lseven-eighths upercent [of Athe dtaxable HTRC/HBvalue 252 determined pursuant to Section 7-29-4.1 NMSA 1978, provided that the average annual taxable value of naturaloil gas was equal to or less than one dollar fifteen centsdollars ($1.15)($15.00) per thousandbarrel cubic feet in the calendar year preceding July 1 of the fiscal year in which the tax rate is to be imposed;

(7)(9) on the oil and on other liquid hydrocarbons removed from natural gas at or near the wellhead from a stripper well property, two and thirteen-sixteenths percent of the taxable value determined pursuant to Section 7-29-4.1 NMSA 1978, provided that the average annual taxable value of naturaloil gas was greater than one dollar fifteen centsdollars ($1.15)($15.00) per thousandbarrel cubic feet but not more than oneeighteen dollardollars thirty-five($18.00) cents ($1.35) per thousandbarrel cubic feet in the calendar year preceding July 1 of the fiscal year in which the tax rate is to be imposed;

(8) on the oil and (10) on othercarbon liquiddioxide, hydrocarbonshelium removedand fromnon- naturalHTRC/HB gas252/a atPage or46 nearhydrocarbon thegases, wellheadthree h u from a stripper well property, one and seven-eighthsthree-fourths percent of » r t h the taxable value determined pursuant to Section 7-29-4.1 NMSA g1978. e l i h r 1978, provided that the average annual taxable value of oil was i s h , equal to or less than fifteen dollars ($15.00) per barrel in e h t u g e b l the calendar year preceding July 1 of the fiscal year in which e e , gh n d d i the tax rate is to be imposed;

= = o h l ] b ,d (9) on the oil and on other liquid i a º r e r = t e w d hydrocarbons removed from natural gas at or near the wellhead m a n o d m :

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 56 - e a n e d r e l u [ A d HTRC/HB 252 from a stripper well property, two and thirteen-sixteenths percent of the taxable value determined pursuant to Section 7-29-4.1 NMSA 1978, provided that the average annual taxable value of oil was greater than fifteen dollars ($15.00) per barrel but not more than eighteen dollars ($18.00) per barrel in the calendar year preceding July 1 of the fiscal year in which the tax rate is to be imposed;

and (10) on carbon dioxide, helium and non- hydrocarbon gases, three and three-fourths percent of the taxable value determined pursuant to Section 7-29-4.1 NMSA 1978.

The tax imposed in Subsection A of this 5 section shall not be imposed on:

(1) natural gas severed and sold from a production restoration project during the first ten years of production following the restoration of production, provided h u that the annual average price of west Texas intermediate crude » r t h oil, determined by the department by averaging the posted g e l i h r prices in effect on the last day of each month of the twelve-twelve-month i s h , month period ending on May 31 prior to each fiscal year in e h t u g e b l which the tax exemption is to be effective, was less than e e , gh n d d i twenty-four dollars ($24.00) per barrel;

=(2) =beginning oJuly h1, l2024, ]natural bgas ,dsevered (2)from beginninga Julystripper 1,well 2024,property naturaland gassold ifrom a ºproduction rcompliance eproject rduring =the tfirst eten wyears dof severedproduction fromfollowing athe strippercompletion wellof propertythe andproject soldor fromuntil athe mdate athe ntotal oamount dof mtax :that would have been imposed but for this subsection equals the cost of the production compliance project, whichever occurs first;

b(3) rbeginning eJuly t1, º2024, ooil tand nother =liquid .227958.3AIChydrocarbons Februaryremoved 12,from 2024natural (9:39am)gas sat kor mnear ethe -wellhead 57from - e a nstripper ewell dproperty r e l u [ A d HTRC/HB 252 production compliance project during the first ten years of production following HTRC/HB 252/a Page 47 the completion of the project or until the date the total amount of tax that would have been imposed but for this subsection equals the cost of the production compliance project, whichever occurs first;

(3)and beginning5 July(4) 1, 2024, oil and other liquid hydrocarbons removed from natural gas at or near the wellhead from a stripper well property production compliancerestoration project during the first ten years of production following the completionrestoration of production, provided that the projectannual oraverage untilprice of west Texas intermediate crude oil, determined by the datedepartment by averaging the totalposted amountprices in effect on the last day of taxeach thatmonth wouldof havethe beentwelve-month imposedperiod butending foron thisMay subsection31 equalsprior theto costeach offiscal year in which the productiontax complianceexemption project,is whicheverto occursbe first;effective, was less than twenty-four dollars ($24.00) per barrel.

andC. [(2)] (4) oil and other liquid hydrocarbons removed from natural gas at or near the wellhead from a production restoration project during the first ten years of h u production following the restoration of production, provided » r t h that the annual average price of west Texas intermediate crude g e l i h r oil, determined by the department by averaging the posted i s h , prices in effect on the last day of each month of the twelve- e h t u g e b l month period ending on May 31 prior to each fiscal year in e e , gh n d d i which the tax exemption is to be effective, was less than = = o h l ] b ,d twenty-four dollars ($24.00) per barrel.

iEvery ainterest ºowner rshall ebe rliable =for tthe etax wto dthe C.extent of the interest owner's interest in such products.

Every interest owner shall be liable for the tax m a n o d m :

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 58 - e a n e d r e l u [ A d HTRC/HB 252 to the extent of [his] the interest owner's interest in such products.

As used in this section, "production compliance project" means a procedure undertaken by the operator of a natural gas or crude oil well that, in order to continue production from the well, is required by rules HTRC/HB 252/a Page 48 promulgated on or after May 25, 2021 by the oil conservation commission to reduce the venting and flaring of natural gas from wells and production equipment and facilities and of natural gas from natural gas gathering systems or by the 5 environmental improvement board to reduce ambient ozone concentrations." SECTION 17.

Section 7-29B-1 NMSA 1978 (being Laws 1995, h u Chapter 15, Section 1) is amended to read:

» r t h "7-29B-1.

SHORT TITLE.--[SectionsTITLE.--Chapter 1 through 6 of this g e l i h r act] Chapter 7, Article 29B NMSA 1978 may be cited as the i s h , "Natural Gas and Crude Oil Production Incentive Act"." e h t u g e b l SECTION 18.

Section 7-29B-2 NMSA 1978 (being Laws 1995, e e , gh n d d i Chapter 15, Section 2, as amended by Laws 1999, Chapter 7, = = o h l ] b ,d Section 2 and as further amended by Laws 1999, Chapter 256, i a º r e r = t e w d Section 3) is amended to read:

m"7-29B-2. a n o d m :

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 59 - e a n e d r e l u [ A d HTRC/HB 252 "7-29B-2.

"average daily production" means, for any crude oil or natural gas property assigned a single production number by the department, the number derived by HTRC/HB 252/a Page 49 dividing the total volume of crude oil or natural gas production from the property reported to the division during a calendar year by the sum of the number of days each eligible well within the property produced or injected during 5 that calendar year;

"division" means the oil conservation division h g of the energy, minerals and natural resources department;

o t hr g e E.

"eligible well" means a crude oil or natural gas i k h r well that produces or an injection well that injects and is i s h integral to production for any period of time during the , t, e u g e b l preceding calendar year;

e e h n d d i F.

"natural gas" means any combustible vapor = = o h l ] b ,d composed chiefly of hydrocarbons occurring naturally;

i a º e r i = r t e w d G.

"operator" means the person responsible for the mactual physical operation of a nnatural ogas dor moil :well;

b e d s º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 60 - e a n e d r e l u [ A d HTRC/HB 252 actual physical operation of a natural gas or oil well;

"production compliance project" means a procedure undertaken by the operator of a natural gas or crude oil well that, in order to continue production from the well, is required by rules promulgated on or after May 25, 2021 by the oil conservation commission to reduce the venting HTRC/HB 252/a Page 50 and flaring of natural gas from wells and production equipment and facilities and of natural gas from natural gas gathering systems or by the environmental improvement board to reduce ambient ozone concentrations;

[I.]5 J.

"production restoration incentive tax exemption" means the tax exemption set forth in Subsection B of Section 7-29-4 NMSA 1978 for natural gas or oil produced from a h u production restoration project;

» r t h [J.] K.

"production restoration project" means the g e l i h r use of any process for returning to production a natural gas or i s h , oil well that had thirty days or less of production in any e h t u g e b l period of twenty-four consecutive months beginning on or after e e , gh n d d i January 1, 1993 as approved and certified by the division;

= = o h l ] b ,d [K.] L.

"severance" means the taking from the soil i a º r e r = t e w d of any product in any manner whatsoever;

mM. a n o d m :

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 61 - e a n e d r e l u [ A d HTRC/HB 252 [L.] M.

(2) if a natural gas producing property, produced an average daily production of less than sixty HTRC/HB 252/a Page 51 thousand cubic feet of natural gas per eligible well per day during the preceding calendar year;

or (3) if a property with wells that produce both crude oil and natural gas, produced an average daily 5 production of less than ten barrels of oil per eligible well per day for the preceding calendar year, as determined by converting the volume of natural gas produced by the well to barrels of oil by h u using a ratio of six thousand cubic feet to one barrel of oil;

» r t h [M.] N.

"stripper well incentive tax rates" means g e l i h r the tax rates set forth in Paragraphs (6) through (9) of i s h , Subsection A of Section 7-29-4 NMSA 1978 and in Paragraphs (4) e h t u g e b l through (7) of Subsection A of Section 7-31-4 NMSA 1978 for e e , gh n d d i natural gas or oil produced from a well within a stripper well = = o h l ] b ,d property;

i a º r e r = t e w d [N.] O.

"well workover incentive tax rate" means mthe atax nrate oset dforth min :Paragraphs (4) and (5) of Subsection A of Section 7-29-4 NMSA 1978 on the natural gas or oil produced from a well workover project;

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 62 - e a n e d r e l u [ A d HTRC/HB 252 the tax rate set forth in Paragraphs (4) and (5)P. of Subsection A of Section 7-29-4 NMSA 1978 on the natural gas or oil produced from a well workover project;

and [O.] P.

Section 7-29B-3 NMSA 1978 (being Laws 1995, Chapter 15, Section 3, as amended by Laws 1999, Chapter HTRC/HB 252/a Page 52 7, Section 3 and as further amended by Laws 1999, Chapter 256, Section 4) is amended to read:

APPROVAL OF PRODUCTION RESTORATION PROJECTS, PRODUCTION COMPLIANCE PROJECTS, WELL WORKOVER PROJECTS AND 5 STRIPPER WELL PROPERTIES.-- A.

h u (1) the operator of the well makes application » r t h to the division in accordance with the provisions of the g e l i h r Natural Gas and Crude Oil Production Incentive Act and rules i s h , adopted pursuant to that act for approval of a production e h t u g e b l restoration project and the application is made within twelve e e , gh n d d i months of the completion of the production restoration project;

=and =(2) othe hdivision lrecords ]show bthat ,dthe andwell ihad athirty ºdays ror eless rof =production tin eany wperiod dof (2)twenty-four theconsecutive divisionmonths recordsbeginning showon thator theafter wellJanuary m1, a1993. n o d m :

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 63 - e a n e d r e l u [ A d HTRC/HB 252 had thirty days or less of production in any period of twenty- four consecutive months beginning on or after January 1, 1993.

(1) the operator of the well makes an application to the division in accordance with the provisions of the Natural Gas and Crude Oil Production Incentive Act and rules adopted pursuant to that act for approval of a HTRC/HB 252/a Page 53 production compliance project and the application is made within twelve months of the completion of the production compliance project;

(2) in order to continue production, the 5 production compliance project was required by rules promulgated on or after May 25, 2021 by the oil conservation commission to reduce the venting and flaring of natural gas from wells and production equipment and facilities and of natural gas from natural gas gathering systems or by the environmental h u improvement board to reduce ambient ozone concentrations;

» r t h (3) the well is approved and certified by the g e l i h r division as a stripper well property;

i s h , (4) the operator of the well has total e h t u g e b l production in New Mexico of not more than one thousand barrels e e , gh n d d i of oil equivalent per day;

and = = o h l ] b ,d (5) the production compliance project was i a º r e r = t e w d implemented to install, upgrade or replace the following well mequipment, aas napproved oby dthe mdivision: :

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 64 - e a n e d r e l u [ A d HTRC/HB 252 equipment, as approved by the division:

and HTRC/HB 252/a Page 54 (f) smokeless combustion chambers.

[B.] C.

(1) the operator of the well makes 5 application to the division in accordance with the provisions of the Natural Gas and Crude Oil Production Incentive Act and rules adopted pursuant to that act for approval of a well workover project;

(2) the division determines that the procedure h g performed by the operator of the well is a procedure to o t hr g e increase the production from the well, but is not routine i k h r maintenance performed by a prudent operator to maintain the i s h well in operation.

Such procedures may include, but are not , t, e u g e b l limited to:

e e h n d d i (a) re-entry into the well to drill = = o h l ] b ,d deeper, to sidetrack to a different location or to recomplete i a º e r i = r t e w d for production;

m(b) recompletion by reperforation of a nzone ofrom dwhich mnatural :gas or oil has been produced or by perforation of a different zone;

b e d s º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 65 - e a n e d r e l u [ A d HTRC/HB 252 (b) recompletion by reperforation of a zone from which natural gas or oil has been produced or by perforation of a different zone;

or (e) squeezing, cementing or installing HTRC/HB 252/a Page 55 equipment necessary for removal of excessive water, brine or condensate from the well bore in order to establish, continue or increase production from the well;

and (3) the operator of the well submits to the 5 division evidence of a positive production increase over the production rate of the well prior to the workover.

The operator must submit a production curve or tabulation made up of at least twelve months' production prior to the workover and h g at least three months' production following the workover that o t hr g e reflects a positive production increase from the workover.

The i k h r production curve or tabulation must be certified by the i s h operator as that of the well on which a workover was performed.

, t, e u g e b l [C.] D.

A natural gas or crude oil producing e e h n d d i property shall be approved and certified by the division as a = = o h l ] b ,d stripper well property if the division records show that the i a º e r i = r t e w d property is assigned a single production unit number by the mdepartment aand: n o d m :

b e d s º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 66 - e a n e d r e l u [ A d HTRC/HB 252 department and:

(2) if a natural gas producing property, produced an average daily production of less than sixty thousand cubic feet of natural gas per eligible well per day HTRC/HB 252/a Page 56 during the preceding calendar year;

or (3) if a property with wells that produce both crude oil and natural gas, produced an average daily production of less than ten barrels of oil per eligible well 5 per day for the preceding calendar year, as determined by converting the volume of natural gas produced by the well to barrels of oil by using a ratio of six thousand cubic feet to one barrel of oil." SECTION 20.

Section 7-29B-4 NMSA 1978 (being Laws 1995, h u Chapter 15, Section 4, as amended) is amended to read:

» r t h "7-29B-4.

APPLICATION PROCEDURES--CERTIFICATION OF g e l i h r APPROVAL--RULES--ADMINISTRATION.-- i s h , A.

The operator of a proposed production e h t u g e b l restoration project, production compliance project or well e e , gh n d d i workover project shall apply to the division for approval of a = = o h l ] b ,d production restoration project, production compliance project i a º r e r = t e w d or a well workover project in the form and manner prescribed by mthe adivision nand oshall dprovide many :relevant material and information the division requires for that approval.

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 67 - e a n e d r e l u [ A d HTRC/HB 252 the division and shall provide any relevant material and information the division requires for that approval.

Upon a determination that the project complies with the provisions of the Natural Gas and Crude Oil Production Incentive Act and rules adopted pursuant to that act, the division shall approve the application and shall issue a certification of approval to the operator and HTRC/HB 252/a Page 57 designate the natural gas or oil well as a production restoration project, production compliance project or well workover project, as applicable.

In addition to the powers enumerated in 5 Section 70-2-12 NMSA 1978, the division shall adopt, promulgate and enforce rules to carry out the provisions of the Natural Gas and Crude Oil Production Incentive Act.

The division shall consider and approve applications for approval of a production restoration project, h u production compliance project or well workover project without » r t h holding hearings on the applications.

If the division denies g e l i h r approval of an application pursuant to such a process, the i s h , division, upon the request of the applicant, shall set a e h t u g e b l hearing of the application before an examiner appointed by the e e , gh n d d i division to conduct the hearing.

The hearing shall be = = o h l ] b ,d conducted in accordance with the provisions of the Oil and Gas i a º r e r = t e w d Act for such hearings." mSECTION a21. n o d m :

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 68 - e a n e d r e l u [ A d HTRC/HB 252 SECTION 21.

certification of the date that production has HTRC/HB 252/a Page 58 been restored on a production restoration project;

[C.] D.

certification of the date that a well workover 5 project has been completed;

and [D.] E.

Section 7-29B-6 NMSA 1978 (being Laws 1995, h g Chapter 15, Section 6, as amended) is amended to read:

o t hr g e "7-29B-6.

QUALIFICATION FOR PRODUCTION RESTORATION i k h r INCENTIVE TAX EXEMPTION, PRODUCTION COMPLIANCE PROJECT TAX i s h EXEMPTION AND WELL WORKOVER AND STRIPPER WELL PROPERTY , t, e u g e b l INCENTIVE TAX RATE--SECRETARY OF TAXATION AND REVENUE e e h n d d i APPROVAL--REFUND.-- = = o h l ] b ,d A.

The person responsible for paying the oil and i a º e r i = r t e w d gas severance tax on natural gas or oil produced from a mproduction restoration project shall qualify to receive a nten-year oproduction drestoration mincentive :tax exemption upon:

b e d s º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 69 - e a n e d r e l u [ A d HTRC/HB 252 production restoration project shall qualify to receive a ten- year production restoration incentive tax exemption upon:

and (3) submission of any other relevant HTRC/HB 252/a Page 59 material that the secretary of taxation and revenue deems necessary to administer the applicable provisions of the Natural Gas and Crude Oil Production Incentive Act.

The person responsible for paying the oil and 5 gas severance tax on natural gas or oil produced from a production compliance project shall qualify to receive a production compliance project tax exemption upon:

h u (1) application to the department in the form » r t h and manner prescribed by the department for approval of the g e l i h r production compliance project tax exemption;

i s h , (2) submission of the certification of e h t u g e b l approval from the division and designation of the natural gas e e , gh n d d i or oil well as a production compliance project;

= = o h l ] b ,d (3) submission to the department of verifiable i a º r e r = t e w d total costs of compliance for the production compliance project mfor apayout npurposes; o d m :

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 70 - e a n e d r e l u [ A d HTRC/HB 252 for payout purposes;

[B.] C.

HTRC/HB 252/a Page 60 (1) application to the department in the form and manner prescribed by the department for approval to apply the well workover incentive tax rate to the natural gas or oil produced from a well workover project;

5 (2) submission of the certification from the division of approval and designation of the natural gas or oil h u well as a well workover project;

and » r t h (3) any other relevant material that the g e l i h r department considers necessary to administer the applicable i s h , provisions of the Natural Gas and Crude Oil Production e h t u g e b l Incentive Act.

e e , gh n d d i [C.] D.

The person responsible for paying the oil = = o h l ] b ,d and gas severance tax and the oil and gas emergency school tax ion natural gas and crude oil produced from a ºstripper rwell eproperty rshall =qualify tto ereceive wthe dstripper onwell naturalproperty gasincentive tax rate for the fiscal year following certification by the division in the form and crudemanner oilagreed producedto fromby athe stripperdivision welland mthe adepartment ndesignating othe dproperty mas :a stripper well property.

bThe rdivision e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 71 - e a n e d r e l u [ A d HTRC/HB 252 property shall qualifycertify to receive the stripper well propertyproperties incentive tax rate for thecalendar fiscal year following1998 certificationno bylater thethan divisionJune in30, the1999 form and mannerno agreedlater tothan byJune the1 divisionof andeach thesucceeding departmentyear designatingfor the propertypreceding ascalendar ayear. stripper well property.

TheE. division shall certify stripper well properties for calendar year 1998 no later than June 30, and no later than June 1 of each succeeding year for the preceding calendar year.

[D.]The E.production restoration incentive tax exemption shall apply to natural gas or oil produced from a production restoration project beginning the first day of the HTRC/HB 252/a Page 61 month following the date the division certifies that production has been restored and ending the last day of the tenth year of production following that date.

The productionwell restorationworkover incentive tax exemptionrate shallapplies apply to the natural gas or oil 5 produced from a productionwell restorationworkover project beginning the first day of the month following the date the division certifies that production has been restored and ending the lastwell dayworkover ofproject thehas tenthbeen yearcompleted. of production following that date.

The stripper well workoverproperty incentive tax raterates appliesapply to the natural gas or oil produced from a stripper well workoverproperty projectin beginning the firsttwelve daymonths ofbeginning theMay month1 followingprior hto uJuly the1 dateof the divisionfiscal certifiesyear thatto which the wellcertification workoverof projectthe »property ras ta hstripper haswell beenproperty completed.applies.

TheF. stripper well property incentive tax g e l i h r rates apply to the natural gas or oil produced from a stripper i s h , well property in the twelve months beginning May 1 prior to e h t u g e b l July 1 of the fiscal year to which the certification of the e e , gh n d d i property as a stripper well property applies.

=The =person oresponsible hfor lpayment ]of bthe ,doil [E.]and F.gas severance tax on natural gas or oil production from an approved well workover project may file a claim for credit against current tax liability or for refund in accordance with Section 7-1-26 NMSA 1978 for taxes paid in excess of the amount due using the well workover incentive tax rate.

The person responsible for payment of the i a º r e r = t e w d oil and gas severance tax on natural gas or oil production from m a n o d m :

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 72 - e a n e d r e l u [ A d HTRC/HB 252 an approved well workover project may file a claim for credit against current tax liability or for refund in accordance with Section 7-1-26 NMSA 1978 for taxes paid in excess of the amount due using the well workover incentive tax rate.

[F.] G.

Well workover projects certified prior to July 1, 1999 shall be deemed to be approved and certified in accordance with the provisions of this 1999 act and natural HTRC/HB 252/a Page 62 gas or oil produced from those projects shall be eligible for the well workover incentive tax rate effective beginning July 1, 1999.

[G.] H.

The secretary of taxation and revenue may 5 adopt and promulgate rules to enforce the provisions of this h u section." » r t h SECTION 23.

Section 7-2-18.16 NMSA 1978 (being Laws g e l i h r 2007, Chapter 45, Section 10) is amended to read:

i s h , "7-2-18.16.

CREDIT--SPECIAL NEEDS ADOPTED CHILD TAX e h t u g e b l CREDIT--CREATED--QUALIFICATIONS--DURATION OF CREDIT.-- e e , gh n d d i A.

A taxpayer who files an individual New Mexico = = o h l ] b ,d income tax return, who is not a dependent of another individual iand who adopts a ºspecial rneeds echild ron =or tafter eJanuary w1, d2007 andor whohas adoptsadopted a special needs child onprior orto after January 1, m2007, may claim a ncredit oagainst dthe mtaxpayer's :tax liability imposed pursuant to the Income Tax Act.

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 73 - e a n e d r e l u [ A d HTRC/HB 252 or has adopted a special needs child prior to January 1, 2007, may claim a credit against the taxpayer's tax liability imposed pursuant to the Income Tax Act.

A taxpayer may claim and the department may allow a special needs adopted child tax credit in the amount of [one thousand dollars ($1,000)] one thousand five hundred dollars ($1,500) to be claimed against the taxpayer's tax liability for the taxable year imposed pursuant to the Income Tax Act.

A taxpayer may claim a special needs adopted child tax credit for each year that the child may be claimed HTRC/HB 252/a Page 63 as a dependent for federal taxation purposes by the taxpayer.

If the amount of the special needs adopted child tax credit due to the taxpayer exceeds the taxpayer's h u individual income tax liability, the excess shall be refunded.

» r t h E.

[A husband and wife] Married individuals who g e l i h r file separate returns for a taxable year in which they could i s h , have filed a joint return may each claim only one-half of the e h t u g e b l special needs adopted child tax credit provided in this section e e , gh n d d i that would have been allowed on a joint return.

= = o h l ] b ,d F.

A taxpayer allowed a tax credit pursuant to this i a º r e r = t e w d section shall report the amount of the credit to the department min a nmanner orequired dby mthe :department.

b r e t º o t n = .227958.3AIC February 12, 2024 (9:39am) s k m e - 74 - e a n e d r e l u [ A d HTRC/HB 252 in a manner required by the department.

[F.] H.

As used in this section, "special needs adopted child" means an individual who may be over eighteen years of age and who is certified by the children, youth and HTRC/HB 252/a Page 64 families department or a licensed child placement agency as meeting the definition of a "difficult to place child" pursuant to the Adoption Act;

provided, however, if the classification as a "difficult to place child" is based on a physical or h u mental impairment or an emotional disturbance the physical or » r t h mental impairment or emotional disturbance shall be at least g e l i h r moderately disabling." i s h , SECTION 24.

A new section of the Income Tax Act is e h t u g e b l enacted to read:

e"DEDUCTION--SCHOOL e , gh n d d i "[NEW MATERIAL] DEDUCTION--SCHOOL SUPPLIES PURCHASED BY A = = o h l ] b ,d PUBLIC SCHOOL TEACHER.-- i a º r e r = t e w d A.

A taxpayer who is not a dependent of another mindividual and is a npublic oschool dteacher mmay :claim a deduction from net income in an amount equal to the costs of school supplies purchased by the public school teacher in a taxable year, not to exceed:

b(1) rfor ea ttaxable ºyear obeginning ton nJanuary =1, .227958.3AIC February 12, 2024 (9:39am) s k m e - 75 - e a n e d r e l u [ A d HTRC/HB 252 individual and isprior a public school teacher may claim a deduction from net income in an amount equal to theJanuary costs1, of2025, schoolfive supplieshundred purchaseddollars by($500); the public school teacher in a taxable year, not to exceed:

(1)and (2) for a taxable year beginning on January 1, 2025 and prior to January 1, 2025,2029, fiveone hundredthousand dollars ($500);($1,000).

and (2) for a taxable year beginning on January 1, and prior to January 1, 2029, one thousand dollars ($1,000).

To claim a deduction pursuant to this section, a taxpayer shall submit to the department information required by the secretary establishing that the taxpayer is HTRC/HB 252/a Page 65 eligible to claim a deduction pursuant to this section.