SB 29 — SOLAR MARKET DEVELOPMENT INCOME TAX CREDIT

SENATE BILL 29 54TH LEGISLATURE - STATEOFNEWMEXICO- SECOND SESSION , 2020 INTRODUCED BY Mimi Stewart and Matthew McQueen This document incorporates amendments that have been adopted during the current legislative session.

The document is a tool to show the amendments in context and is not to be used for the purpose of amendments.

CREATING THE NEW SOLAR MARKET DEVELOPMENT h INCOME TAX CREDIT.

g5 o t hr g e i k BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

h r i s SECTION 1.

A new section of the Income Tax Act is enacted h , t, to read:

e"NEW u g e b l e e h "[NEW MATERIAL ] NEW SOLAR MARKET DEVELOPMENT INCOME TAX n d d i = = o h CREDIT.-- l ] b ,d i a º e A.

For taxable years prior to January 1, r2028, ia =taxpayer rwho tis enot wa ddependent mof another individual and who, on or after March 1, 2020, purchases and installs a nsolar othermal SFCºsystem 2030»SFCor SFCº2028»SFC,a photovoltaic system in a taxpayerresidence, whobusiness isor notagricultural enterprise in New Mexico owned by that taxpayer, may apply for, and the department may allow, a dependentcredit dagainst mthe :taxpayer's tax liability imposed pursuant to the Income Tax Act in an amount provided in Subsection C of this section.

b e d s º o t n = .216017.2GLGAIC February 17, 2020 (8:56am) s k m e e a n e d r e l u [ A d of another individual and who, on or after SFCºJanuary»SFC SFCºMarch»SFC 1, 2020, purchases and installs a solar thermal system or a photovoltaic system in a residence, business or agricultural enterprise in New Mexico owned by that taxpayer, may apply for, and the department may allow, a credit against the taxpayer's tax liability imposed pursuant to the Income Tax Act in an amount provided in Subsection C of this section.

The department may allow a new solar market development income tax credit of ten percent of the purchase SB 29 Page 1 and installation costs of a solar thermal or photovoltaic h system.

g o t hr D.

The new solar market development income tax g e i k credit shall not exceed six thousand dollars ($6,000) SFCº per h r i s taxpayer per taxable year»SFC.year.

The department shall allow a h , t, e u g tax credit only for solar thermal and photovoltaic systems e b l e e h certified pursuant to Subsection SFCºE J»SFC SFCºE»SFC of this n d d i = = o h section.

l ] b ,d i a º e SFCº E.

The department may allow a maximum annual r i = r t e w d m a n o aggregate of ten million dollars ($10,000,000) in new solar d m :

b e d s º o t n = .216017.2GLGAIC February 17, 2020 (8:56am) s k m e - 2 - e a n e d r e l u [ A d market development income tax credits per calendar year.

Completed applications for the credit shall be considered in the order received by the department.»SFC SFCºE.

The application shall include proof of purchase and installation of a solar thermal or photovoltaic system, that the system meets technical specifications and requirements relating to safety, code and h standards compliance, solar collector orientation and sun u » r t h exposure, minimum system sizes, system applications and lists g e l i of eligible components and any additional information that the h r i s energy, minerals and natural resources department may require h , e h t u g to determine eligibility for the credit.

A dated certificateSB e29 bPage l2 ecertificate e , gh of eligibility shall be issued to the taxpayer providing the n d d i = = o h l ] b ,d amount of the new solar market development income tax credit i a º r e r = for which the taxpayer is eligible and the taxable year in twhich ethe wcredit dmay mbe aclaimed. n o d m :

b r e t º o t n = .216017.2GLGAIC February 17, 2020 (8:56am) s k m e - 3 - e a n e d r e l u [ A d which the credit may be claimed.»SFC F.

The application shall include a certification made pursuant to Subsection SFCºE J»SFC SFCºE»SFC of this section.

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

h r i s I.

A taxpayer may be allocated the right to claim aSB h29 ,Page e3 ha new solar market development income tax credit in proportion to t u g e b l e e , gh the taxpayer's ownership interest if the taxpayer owns an n d d i = = o h interest in a business entity that is taxed for federal income l ] b ,d i a º r tax purposes as a partnership or limited liability company and e r = t e w d m a n o that business entity has met all of the requirements to be deligible mfor :the credit.

b r e t º o t n = .216017.2GLGAIC February 17, 2020 (8:56am) s k m e - 4 - e a n e d r e l u [ A d eligible for the credit.

SFCº J.

TheA energy,taxpayer mineralsallowed anda naturaltax resourcescredit departmentpursuant shallto adoptthis rulessection establishingshall proceduresreport tothe provideamount certification of solarthe thermalcredit andto photovoltaicthe systemstaxation forand therevenue purposesdepartment ofin obtaining a newmanner solarrequired marketby developmentthat incomedepartment. tax credit.

TheK. rules shall address technical specifications and requirements relating to safety, code and standards compliance, solar collector orientation and sun exposure, minimum system sizes, system applications and lists of eligible components.

The energy,taxation minerals and naturalrevenue resources department mayshall modifycompile thean specificationsannual andreport requirementson asthe necessarynew tosolar maintainmarket adevelopment highincome leveltax ofcredit systemthat qualityshall andinclude performance.»SFCthe SFCºK.»SFCnumber SFCºJ.»SFCof Ataxpayers taxpayerapproved allowedby athe taxdepartment credit pursuant to thisreceive sectionthe shallcredit, report the aggregate amount of thecredits happroved credit to the taxation and revenueany departmentother ininformation anecessary mannerto uevaluate »the rcredit. t h required by that department.

gThe edepartment lshall ipresent SFCºthe L.»SFCreport SFCºK.»SFC.to the revenue stabilization and tax policy committee and the legislative finance committee with an analysis of the cost of the tax credit.

TheL. taxation and revenue h r i s department shall compile an annual report on the new solar h , e h t u g market development income tax credit that shall include the e b l e e , gh number of taxpayers approved by the department to receive the n d d i = = o h credit, the aggregate amount of credits approved and any other l ] b ,d i a º r e r = information necessary to evaluate the credit.

TheAs departmentused tin ethis wsection: d m a n o shall present the report to the revenue stabilization and tax d m :

b(1) r"photovoltaic esystem" tmeans ºan oenergy tsystem nthat =collects .216017.2GLGAICor Februaryabsorbs 17,sunlight 2020for (8:56am)conversion sinto kSB m29 ePage -4 5electricity; - e a n e d r e l u [ A d policy committee and the legislative finance committee with an analysis of the cost of the tax credit.

SFCº M.»SFC SFCºL.»SFC As used in this section:

(1) "photovoltaic system" means an energy system that collects or absorbs sunlight for conversion into electricity;

-SB 629 -Page h5 u25 » r t h g e l i h r i s h , e h t u g e b l e e , gh n d d i = = o h l ] b ,d i a º r e r = t e w d m a n o d m :

b r e t º o t n = .216017.2GLGAIC February 17, 2020 (8:56am) s k m e e a n e d r e l u [ A d