A day after the House version of the legislation narrowly passed a committee, an identical bill to extend the state’s solar tax credit had a much more comfortable reception in the Senate.
The Senate Conservation Committee passed the bill on an 8-1 vote. The opposition to the legislation did not stem from the merits of the bill itself, but rather concerns about using tax credits at all.
The legislation is the same as what passed last year, and Sen. Mimi Stewart, D-Albuquerque, described it as a compromise with the House Ways and Means Committee. The compromise is from a “step-down” which would lower the tax credit as years go on, from the current ten percent down to 5 percent after eight years.
“When you want to have a tax credit for an industry to promote that industry, you want to get it started,” Stewart said. She said the House Ways and Means wanted to “have an ending part.”
The credit would “sunset” or end after eight years.
Sen. Bill Sharer, R-Farmington, was the lone vote against the legislation. He supported helping rooftop solar, but opposes the use of tax credits in general.
“It’s time to redo the entire tax code,” Sharer said.
He also asked what would happen to the industry, which Stewart said employees nearly 2,000 people at almost 100 businesses, if the tax credit were to go away.
“I think some of the businesses might leave,” Stewart said. “They did in Nevada.”
Others had similar misgivings about tax credits in general.
“If we lowered the tax rate and did away with tax credits for everybody could this business and other businesses survive?” Sen. Bill Payne, R-Albuquerque, asked.
Sen. Joseph Cervantes, D-Las Cruces, wondered at the point of the “step-down” since the tax credit already has a $5 million cap on incentives paid out by the state.
Stewart said that it was about “certainty” for the industry.
“It would be just as certain to say it’s ten percent forever,” Cervantes said.
“It’s hard to get my head around to what this accomplishes,” he said. He went on to say he would have to ask some of those in House why the step-down was included.
Cervantes also asked about the fate of last year’s bill, which was pocket vetoed by Gov. Susana Martinez.
Stewart said she spoke “at length” with Martinez’s chief of staff, Keith Gardner. She said she was told it was not signed into law because there was one more year until the tax credit ended.
“It’s not much of a reason, but that was the reason I was given.”
The bill heads to the Senate Corporations and Transportation Committee.