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 year, or up to $15 million if the facility is certified as likely to create new jobs and significant investment. The Investment Tax Credit provides a credit for qualified expenditures made by taxpayers for their facilities, capped at either 10% of the expenditures or $5 million, with a potential increase to $7.5 million under similar conditions as the Production Tax Credit.

Both credits are available for taxable years beginning on or after January 1, 2025, and will be repealed effective January 1, 2033. The total annual aggregate amount of credits that can be certified increases over the years, starting at $30 million in 2026 and reaching $100 million by 2028. Taxpayers must apply for certification from the Department of Environment and can transfer their credits to other taxpayers. The bill also includes provisions for the credits to be included in the tax expenditure budget and outlines the necessary documentation and eligibility criteria for claiming the credits.