Summary:

 House Bill 176 (HB 176) creates an income tax credit for individuals who purchase and install a backup power generator in New Mexico. The credit covers 50% of purchase and installation costs, with a total annual cap of $5 million. The tax credit is available for taxable years prior to January 1, 2035. HB 176 applies to taxable years beginning on or after January 1, 2025. 

Legislation Overview:

 House Bill 176 (HB 176) establishes a refundable tax credit for individuals who install backup power generators. The credit is equal to 50% of eligible costs, and any amount exceeding a taxpayer’s liability will be refunded. To qualify, taxpayers must apply for certification from the Energy, Minerals, and Natural Resources Department (EMNRD), which will issue certificates on a first-come, first-served basis until the five million dollar ($5,000,000) cap is reached. The bill includes provisions for joint filers and pass-through entities, allowing proportional credit claims based on ownership shares. The tax credit program applies to taxable years beginning January 1, 2025 and is set to expire on January 1, 2035.

Bill Implications

HB 176 will reduce state income tax revenue by up to five million dollars ($5,000,000) annually. The financial impact will depend on the number of applicants and the extent to which they claim the full credit. The bill may incentivize investment in backup power systems, potentially reducing the burden on the electric grid during outages. Administrative costs for processing applications and issuing credits will be incurred by the EMNRD. 

Current Law:

 There is currently no state income tax credit for purchasing or installing backup power generators. Residents must cover generator costs without state financial assistance. HB 176 introduces a new incentive aimed at increasing resilience to power outages.