New Mexico 2024 Regular Session

New Mexico Senate Bill SB40

Introduced

1/16/24

Report Pass

1/23/24

Caption

Geothermal Heat Pump Tax

Impact

If enacted, SB40 will positively impact state law by enhancing the financial incentives for individuals and corporations to invest in geothermal heating technology. The bill amends the definition of 'geothermal ground-coupled heat pump' and sets forth specific criteria for the systems to qualify, thereby potentially increasing the adoption of energy-efficient systems. The refundable nature of the credit means that it can provide immediate financial relief to taxpayers, which may boost installations in residential, commercial, and agricultural sectors across New Mexico.

Summary

Senate Bill 40 seeks to extend the geothermal ground-coupled heat pump tax credits under the Income Tax Act and the Corporate Income and Franchise Tax Act. The bill proposes to increase the annual aggregate caps for these tax credits significantly from two million dollars to sixteen million dollars. It also makes the tax credit refundable, ensuring that taxpayers can avail of the benefits even if their tax liability is lower than the credit amount. The intent behind the bill is to encourage the installation of geothermal heating systems, thereby promoting renewable energy sources within New Mexico.

Contention

While the bill has its proponents, there may be points of contention surrounding how the increased caps and refundable credits will be funded and monitored. Critics could argue that enhanced tax credits could lead to financial burdens on the state budget if not adequately managed. Furthermore, there may be concerns about ensuring that only qualified and efficient systems receive the tax credits, which necessitates strict adherence to the rules and guidelines for installation and certification outlined in the bill.