April 15, 2015

Supporters want to know why solar tax credit extension was vetoed


Photo Credit: Walmart Corporate cc

Gov. Susana Martinez rejected a bill that would extend the Solar Market Development Tax Credit in the state—and supporters aren’t sure why.

Photo Credit: Walmart Corporate cc

Photo Credit: Walmart Corporate cc

Martinez pocket vetoed the legislation, which means she did not sign the legislation before the deadline on action for bills passed in the final days of the legislative session.

Unlike a regular veto, the 18 pieces of legislation that Martinez pocket vetoed do not come with an executive message that says why Martinez did not agree with the legislation.

Groups that supported the solar tax credit extension do not know why the bill was pocket vetoed.

“We’ve been asking and we haven’t heard a reason,” Sanders Moore, state director of Environment New Mexico, told New Mexico Political Report.

“No one has actually heard an explanation,” Liliana Castillo, communications manager of Conservation Voters New Mexico said.

New Mexico Political Report reached out to a spokesman for Martinez and asked why she did not sign the legislation. The governor’s office did not respond.

Some critics of the bill said that it was not necessary to extend the tax credit since it is still in effect through 2016. The tax credit provides up to ten percent of the cost of solar photovoltaic or solar thermal systems for residential and small business customers.

Moore said that extending the tax credit would provide stability for the solar industry.

“This is a jobs bill,” Moore said. “This would really help grow the employment in the solar industry.”

Castillo called the tax credit “instrumental in building the solar industry in our state.”

The bill was amended in the House Ways and Means Committee to extend the sunset date from 2020 to 2024 and to decrease the tax credit from 10 percent through 2019 to 5 percent in 2024.

The legislation wasn’t the only piece of solar tax credit legislation that Martinez vetoed. She also vetoed House Bill 296 which would have extended the solar market development tax credit for residential and small businesses to leased systems.

That legislation was vetoed with a message. From that message:

While I support efforts to promote access to renewable energy and believe that encouraging the leasing of solar panels is one of many ways this can occur, House Bill 296 is structured in a way that would create unintended consequences. For example, depending upon how a company structures its business model, a homeowner could lease solar panels for their home, receive a tax credit payment worth several thousand dollars, and then move out of the home soon after making the first lease payment – saddling the burden of the lease payments on the next homeowner, without the benefit of the tax credit.

Martinez suggested an idea she would prefer, to allow the tax credit to go to the company leasing the system and requiring the company to pass along the credit to the person leasing the system.

This could bode well for the future of the bill, sponsored by Sarah Maestas Barnes, R-Albuquerque, provided that the solar tax credit still exists.