The proposed bill establishes a new Affordable Housing Revitalization Corporate Income Tax Credit in New Mexico, aimed at incentivizing the rehabilitation of vacant buildings and lots for affordable housing projects. Taxpayers who qualify under the Affordable Housing Act and incur rehabilitation expenses can claim a tax credit of 30% for properties vacant for over two years but less than five years, or 40% for properties vacant for five years or more, with maximum credits capped at $2 million and $4 million respectively. To qualify, at least 80% of the developed residential units must be affordable housing, and rehabilitation expenses must fall within specified limits. The bill outlines a pre-certification process through the New Mexico mortgage finance authority, as well as a certification of eligibility after project completion.

Additionally, the bill sets an aggregate cap of $100 million on the total credits that can be certified in a calendar year, with a sub-limit of $50 million for non-rural projects. Tax credits can be transferred between taxpayers, and any excess credit beyond a taxpayer's liability can be carried forward for up to five years. The provisions of this act will apply to taxable years starting on or after January 1, 2026, and the section will be repealed effective January 1, 2038.