HB 437 — FOSTER CARE ORGANIZATION TAX CREDIT

HOUSE HEALTH AND HUMAN SERVICES COMMITTEE SUBSTITUTE FOR HOUSE BILL 437 57TH57 LEGISLATURETH -STATEOFNEWMEXICO-LEGISLATUR- STATE OF NEW MEXICO - FIRST SESSION,SESSIO, 2025 INTRODUCED4 BY6 Mark8 Duncan10 andAN StefaniACT LordRELATING andTO JonathanTAXATION; A.

HenryCREATING andTHE CathrynnQUALIFYING N.FOSTER CARE ORGANIZATION INCOME TAX CREDIT;

BrownPROVIDING 7A 9DELAYED ANREPEAL. ACT RELATING TO TAXATION;

CREATING THE QUALIFYING FOSTER CARE ORGANIZATION INCOME TAX CREDIT.

AFor taxable years beginning prior to January 1, i a e r 20 2031, a taxpayer who is a resident, who is not a idependent of a et rm 20m dependent21 of another individual and who makes a contribution to a tqualifying md mr 21e a22 qualifying foster care organization may claim a credit dagainst rthe c e 22s againstk the23 taxpayer's tax liability imposed pursuant to the cIncome Tax e sa kn 23b Income24 Tax Act.

The credit authorized pursuant to this section e a n b 24 may be u [ referred to as the "qualifying foster care organization uincome [.231528.1 incomeHHHC/HB 437 tax credit".

.230823.1 B.

The amount of the credit shall be in an amount equal to:to the amount contributed to the qualifying foster care organization, not to exceed:

e t 17 The documentation shall be signed by an officer of the w l n d 18 organization under penalty of perjury and shall include:

e= t= 1719 (1) documentation that demonstrates to the wa l ni da 18e r 20 department that the organization has been granted exemption =a =t 19m am l21 from the federal income tax by the United States commissioner id ar e r22 20 of internal revenue as an organization described in Section ac te ms mk 2123 501(c)(3) of the Internal Revenue Code;

de ra en 22b 24 (2) financial data indicating the cu e[ s k 23 organization's budget for the organization's prior operating e.231528.1 a- n2 b- 24HHHC/HB 437 year and the amount of that budget spent on foster care u [ services;

and .230823.1 - 2 - (3) a statement that the organization plans to continue spending at least fifty percent of the organization's budget on foster care services.

TheFor a contribution for which the credit providedis bye thist section17 shallclaimed beand includedthat inis made on or before the taxfifteenth expenditureday budgetof pursuantthe tow Sectionl 7-1-84n NMSAd 1978,18 includingfourth month following the totalclose annualof aggregatethe costtaxable ofyear, the = = 19 credit may be applied to either the current or preceding a l i a e tr 1720 taxable year and is considered to have been made on the credit.last a t m m 21 day of that taxable year.

wd lr ne d22 18 G.

A taxpayer who claims a deduction pursuant to c e s k 23 the Income Tax Act for the same contribution for which the tax e a n b 24 credit provided by this section is allowed shall not be u [ eligible for the tax credit provided by this section for the .231528.1 - 3 - HHHC/HB 437 amount deducted.

H.

The credit provided by this section shall be in lieu of a deduction pursuant to Section 170 of the Internal Revenue Code and taken for purposes of the tax imposed pursuant to the Income Tax Act.

I.

The credit provided by this section shall be included in the tax expenditure budget pursuant to Section 7-1-84 NMSA 1978, including the total annual aggregate cost of the credit.

J.

= = 19 a l (1) "foster care services" means cash i a e r 20 assistance, medical care, child care, behavioral health a t m m 21 services, food, snacks at the qualifying foster care d r e 22 organization's foster youth events, clothing, shelter, c e s k 23 character education programs, workforce development programs, e a n b 24 secondary education student retention programs, housing or ue [t 17 financial literacy services, activities to support, train and .230823.1w -l 3n -d 18 retain foster parents licensed or certified by the children, = = 19 youth and families department or a child placement agency to a l i a e r 20 provide care for children in the custody of the department or a t m m 21 agency in their role as a foster parent and activities to d r e 22 support caregivers and guardians pursuant to the Kinship c e s k 23 Guardianship Act or any other assistance that is reasonably e a n b 24 necessary to meet basic needs or provide normalcy and that is u [ provided and used in New Mexico.

As used in this paragraph, .231528.1 - 4 - HHHC/HB 437 "normalcy" means the condition of experiencing a typical childhood by participating in activities that are age or developmentally appropriate, as defined in 42 U.S.C.

(a) has been granted exemption from the federal income tax by the United States commissioner of internal revenue as an organization described in Section e t 17 501(c)(3) of the Internal Revenue Code;

and w l n d 18 (b) each operating year, provides foster = = 19 a l care services to at least two hundred qualified individuals in i a e r 20 New Mexico and spends at least fifty percent of its budget on a t m m 21 foster care services to qualified individuals in New Mexico;

d r e 22 and c e s k 23 (3) "qualified individual" means:

e a n b 24 (a) a foster child.

As used in this ue [t 17 subparagraph, "foster child" means:

1) a child in the custody .230823.1w -l 4n -d 18 of the children, youth and families department or a child = = 19 placement agency that may be placed with a person licensed or a l i a e r 20 certified by that department or agency to provide care for the a t m m 21 child;

or 2) a participant in the fostering connections program d r e 22 pursuant to the Fostering Connections Act;

or c e s k 23 (b) a person who is under twenty-seven e a n b 24 years of age and whose reason for leaving foster care is:

1) u [ reaching eighteen years of age;

2) adoption or legal .231528.1 - 5 - HHHC/HB 437 guardianship after reaching fifteen years of age;

DELAYED REPEAL.--Section 1 of this act is repealed effective January 1, 2031.

SECTION 3.

- 56 - 9 11 13 15 e t 17 w l n d 18 = = 19 a l i a e r 20 a t m m 21 d r e 22 c e s k 23 e a n b 24 u [ .230823.1.231528.1