This bill establishes two new corporate income tax credits in New Mexico aimed at promoting industrial decarbonization: the Industrial Decarbonization Production Corporate Income Tax Credit and the Industrial Decarbonization Investment Corporate Income Tax Credit. The Production Tax Credit allows taxpayers who operate qualified industrial facilities to claim a credit for reducing carbon dioxide equivalent emissions by at least 40% below an industrial benchmark, with a maximum credit of $10 million per facility per taxable year, potentially increasing to $15 million for facilities that significantly contribute to job creation and investment. The Investment Tax Credit offers a credit for qualified expenditures made by these facilities, capped at either 10% of the expenditures or $5 million, with a potential increase to $7.5 million under similar conditions.

Both credits are subject to a total annual aggregate limit, starting at $30 million in 2026 and increasing to $100 million by 2028. Taxpayers must apply for certification from the Department of Environment and can transfer their credits to other taxpayers. The credits are not refundable but can be carried forward for three years. The provisions of this act will apply to taxable years beginning on or after January 1, 2025, and the credits will be repealed effective January 1, 2033.