NMSA 1978, § 7-2A-24 — 7-2A-24

Geothermal ground-coupled heat pump corporate income
tax credit.

# A.

A taxpayer that files a New Mexico corporate income tax return for a taxable year
beginning on or after January 1, 2024 and that purchases and installs after May 15,
2024 but before December 31, 2034 a geothermal ground-coupled heat pump in a
property owned by the taxpayer may claim against the taxpayer's corporate income tax
liability, and the department may allow, a tax credit of up to thirty percent of the
purchase and installation costs of the system. The credit provided in this section may
be referred to as the "geothermal ground-coupled heat pump corporate income tax
credit". The total geothermal ground-coupled heat pump corporate income tax credit
allowed to a taxpayer shall not exceed nine thousand dollars ($9,000). The department
shall allow a geothermal ground-coupled heat pump corporate income tax credit only for
geothermal ground-coupled heat pumps that are certified pursuant to Subsection C of
this section and installed by a nationally accredited ground source heat pump installer.

# B.

That portion of a geothermal ground-coupled heat pump corporate income tax
credit that exceeds a taxpayer's tax liability in the taxable year in which the credit is
claimed shall be refunded to the taxpayer.

# C.

The energy, minerals and natural resources department shall adopt rules
establishing procedures to provide certification of geothermal ground-coupled heat
pumps for purposes of obtaining a geothermal ground-coupled heat pump corporate
income tax credit. The rules shall address technical specifications and requirements
relating to safety, building code and standards compliance, minimum system sizes,
system applications and lists of eligible components. The energy, minerals and natural
resources department may modify the specifications and requirements as necessary to
maintain a high level of system quality and performance.

# D.

The maximum annual aggregate of credits that may be certified in a calendar
year by the energy, minerals and natural resources department is four million dollars
($4,000,000). That department shall not certify a tax credit for which a taxpayer claims
a 2021 sustainable building corporate income tax credit using a geothermal ground-
coupled heat pump as a component of qualification for the rating system certification
level used in determining eligibility for that credit. Completed applications for the credit
shall be considered in the order received. The energy, minerals and natural resources
department shall provide the department appropriate information for all certificates of
eligibility in a secure manner on regular intervals agreed upon by both departments.

# E.

A taxpayer allowed a tax credit pursuant to this section shall claim the credit on
forms and in a manner required by the department.

# F.

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

# G.

As used in this section, "geothermal ground-coupled heat pump" means a
heating and refrigerating system that directly or indirectly utilizes available heat below
the surface of the earth for distribution of heating and cooling or domestic hot water and
that has either a minimum coefficient of performance of three and four-tenths or an
efficiency ratio of sixteen or greater.