HB 77 — AFFORDABLE HOUSING REVITALIZATION TAX CREDIT

HOUSE BILLCOMMERCE 77AND 57THECONOMIC LEGISLATURE-DEVELOPMENT STATECOMMITTEE OFSUBSTITUTE NEWFOR MEXICOHOUSE -BILL 77 57TH LEGISLATURE -STATEOFNEWMEXICO- SECOND SESSION,SESSION , 2026 INTRODUCED4 BY6 Rebecca8 Dow10 andAN CindyACT NavaRELATING andTO JoshuaTAXATION; N.

Hernandez and Anita Gonzales 7 9 AN ACT RELATING TO TAXATION;

ABeginning taxpayer that, beginning on the effective date of this section a t m m 21 of this section and prior to January 1, 2037, incursa taxpayer that is a qualifying d r e 22 grantee pursuant to the Affordable Housing Act and that incurs c e s k 23 rehabilitation expenses for a revitalization project in New c e sa kn 23b 24 Mexico may claim a credit against the taxpayer's tax liability eu a[ n b 24 imposed pursuant to the Corporate Income and Franchise Tax Act.

u.233572.1 [HCEDC/HB 77 The tax credit provided by this section may be referred to as .232247.4 the "affordable housing revitalization corporate income tax credit".

(1) at least fifteeneighty percent of the residential housing units developed are affordable housing;

and (2) the rehabilitation expenses are at least eighty percent but not more than one hundred twenty-five percent of the estimated rehabilitation expenses stated in the e t 17 notice of intent to rehabilitate pursuant to Subsection C of ew tl 17n d 18 this section.

w= l= n19 d 18 C.

Prior to incurring rehabilitation expenses, a =a =l 19i a le r 20 taxpayer shall apply for pre-certification from the New Mexico i a et rm 20m 21 mortgage finance authority on forms and in the manner ad tr me m22 21 prescribed by the authority.

The application shall include a dc r e 22s k 23 proposal for the revitalization project and a notice of intent c e sa kn 23b 24 to rehabilitate that provides the location of the building or eu a[ n b 24 lot, the estimated expenses and the proposed use upon the u.233572.1 [- 2 - HCEDC/HB 77 completion of the project.

If the New Mexico mortgage finance .232247.4 - 2 - authority determines that the projected costs are likely to meet the requirements to be rehabilitation expenses eligible for the tax credit, the authority shall issue a pre- certification to the taxpayer;

The application shall include an affidavit from a certified public accountant verifying that the rehabilitation expenses were incurred by the taxpayer and meet the requirements of this e t 17 section.

The aggregate amount of credits that may be certified e t 17 as eligible in a calendar year is one hundred million dollars w l n d 18 ($100,000,000);E.

providedThe thataggregate noamount moreof thancredits fiftythat millionmay be = = 19 acertified las dollarseligible ($50,000,000) in creditsa shallcalendar beyear allowedis forone projectshundred million a l i a e r 20 developeddollars in($100,000,000); areas that are not rural areas.

Completedprovided that no more than fifty a t m m 21 applicationsmillion dollars ($50,000,000) in credits shall be consideredallowed for d r e 22 projects developed in theareas orderthat received.are not rural areas.

d r e 22 Applications for certification received after the limitation on c e s k 23 theCompleted aggregateapplications amountshall ofbe creditsconsidered has been met in athe calendarorder year e a n b 24 shallreceived. not be approved.

IfApplications afor taxpayercertification isreceived eligibleafter for the u [ credit,limitation aon datedthe certificateaggregate amount of eligibilitycredits shallhas bebeen issuedmet toin .232247.4a .233572.1 - 3 - theHCEDC/HB taxpayer77 providingcalendar theyear amountshall ofnot creditbe approved for whichthat calendar year, but shall be considered for certification in the taxpayerfollowing iscalendar eligible.year.

E.If a taxpayer is eligible for the credit, a dated certificate of eligibility shall be issued to the taxpayer providing the amount of credit for which the taxpayer is eligible.

F.

F.

That portion of approved credit claimed by a taxpayer that exceeds the taxpayer's income tax liability in the taxable year in which the credit is claimed shall not be refunded but may be carried forward for a maximum of five consecutive taxable years.

ToThat receiveportion aof taxapproved credit providedclaimed by this section, a taxpayer shallthat claimexceeds the credittaxpayer's onincome formstax andliability in the mannertaxable prescribedyear byin which the departmentcredit withinis twelveclaimed monthsshall enot tbe 17refunded followingbut themay calendarbe yearcarried inforward whichfor thea certificatemaximum of wfive le nt d17 18consecutive eligibilitytaxable wasyears. issued.

=w =l 19n ad l18 H.

TheTo receive a tax credit provided by this section= = 19 section, a taxpayer shall beclaim the credit on forms and in the a l i a e r 20 includedmanner inprescribed by the taxdepartment expenditurewithin budgettwelve pursuantmonths to Section a t m m 21 7-1-84following NMSAthe 1978,calendar includingyear thein annualwhich aggregatethe costcertificate of the d r e 22 credit.eligibility was issued.

The credit provided by this section shall be e a n b 24 included in the tax expenditure budget pursuant to Section u [ 7-1-84 NMSA 1978, including the annual aggregate cost of the .233572.1 - 4 - HCEDC/HB 77 credit.

J.

e a n b 24 (1) "abandoned building" means a structure or u [ part of a structure in New Mexico that hashad once been unoccupiedoccupied and .232247.4has -since 4been -unoccupied and non-operational for income-producingincome- producing purposes for at least two years prior to the filing of a notice of intent to rehabilitate;

e t 17 (4) "rehabilitation expenses" means capital expendituresw incurredl whilen participatingd in18 aexpenditures voluntary remediation program administered by the department of environment or for a revitalization project, including estructural t= 17= structural19 repairs, environmental remediation, site wimprovements, new a l ni da 18e improvements,r new20 construction related to the project, =acquisition, =design, 19 a lt acquisition,m design,m 21 engineering and permitting, but excluding icosts arelated eto d r 20e costs22 related to personal property;

ac te ms mk 2123 (5) "revitalization project" means the de ra en 22b 24 renovation, development or redevelopment of an abandoned cu e[ s k 23 building or a vacant lot into single-family or multifamily e.233572.1 a- n5 b- 24HCEDC/HB 77 residential housing;housing, including a revitalization project that is part of a voluntary remediation program administered by the department of environment;

u [ (6) "rural area" means a county that has a .232247.4 - 5 - population less than one hundred twenty-five thousand persons according to the most recent federal decennial census or a municipality with a population less than fifty thousand persons according to the most recent federal decennial census;

and (7) "vacant lot" means a parcel of land in New Mexico without a structure or part of a structure that had once been occupied and has since been unoccupied and non-operational for income-producing purposes for at least two years prior to the filing of a notice of intent to rehabilitate." SECTION 2.

APPLICABILITY.--The provisions of this act e t 17 apply to taxable years beginning on or after January 1, 2026.

- 6 - 16 e t 17 w l n d 18 - 6 - = = 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 [ .232247.4.233572.1