The proposed bill establishes a new income tax credit in New Mexico for taxpayers who purchase and permanently install backup power generators. This credit, referred to as the "backup power generator income tax credit," allows eligible taxpayers to claim a credit equal to fifty percent of the purchase and installation costs of the generator. To qualify, taxpayers must not be dependents of another individual and must apply for certification from the energy, minerals, and natural resources department. The total amount of credits that can be certified in any calendar year is capped at five million dollars, and applications will be processed in the order they are received.

The bill also includes provisions for married individuals filing separately, allowing them to claim half of the credit they would have received if filing jointly. Additionally, it permits taxpayers with ownership interests in certain business entities to allocate the credit based on their ownership share. The credit is refundable if it exceeds the taxpayer's liability, and it will be included in the state's tax expenditure budget. The provisions of this act will apply to taxable years beginning on or after January 1, 2025, and the credit will be repealed effective January 1, 2035.