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 potential 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 these facilities, capped at $5 million per facility, or $7.5 million if the facility meets similar criteria for job creation and emissions reduction.

Both credits are available for taxable years beginning on or after January 1, 2025, and will be repealed effective January 1, 2033.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 available is set to increase over the years, starting at $30 million in 2026 and reaching $100 million annually by 2028. Taxpayers must apply for certification from the Department of Environment to claim these credits, and the credits cannot be refunded but can be carried forward for up to three years. The bill also includes provisions for the transfer of credits between taxpayers and mandates regular reporting on the number of credits certified.