The proposed bill establishes a new tax credit known as the "home fire recovery income tax credit" for taxpayers in New Mexico who have incurred qualified expenditures to replace homes destroyed by wildfires between 2021 and 2023. Eligible taxpayers, who are not dependents of another individual, can claim a tax credit equal to their qualified site-built home expenditures against their tax liability. To qualify, taxpayers must apply for certification from the construction industries division, providing proof of their prior home's destruction, evidence of expenditures for the new home, and other required documentation. The credit can be claimed within twelve months of receiving the eligibility certificate, and any excess credit can be carried forward for up to three years.

Additionally, the bill outlines specific provisions regarding the allocation of the credit for married individuals filing separately, as well as for those owning interests in business entities. The construction industries division is tasked with issuing certificates of eligibility and compiling an annual report on the credit's usage, which will be presented to relevant legislative committees. The bill includes a delayed repeal provision, stating that the section will be repealed effective January 1, 2032, and it applies to taxable years beginning on or after January 1, 2025.