Lawmakers consider transferable school solar tax credit; committee tables bill to allow refinements on savings guarantees and equity

Sponsors and an industry expert presented House Bill 213, a proposed transferable tax credit intended to encourage solar and battery installations at K–12 public schools in New Mexico. The bill would provide a 40% state tax credit on project “appraised value,” be transferable to third‑party investors, and carry a maximum of $100 million per year; proponents said there would be no fiscal impact in fiscal year 2025 but projected up to $100 million annual impact starting in 2026 as projects ramp up.

A consultant/industry witness summarized the bill’s expected benefits: large reductions in school electricity costs (examples in the handout showed per‑district annual savings ranging from roughly $130,000 for some schools up to $10 million for Albuquerque Public Schools), zero upfront cost for districts under power‑purchase agreement (PPA) models, local jobs from distributed carport installations, and additional emergency shelter and battery backup benefits. The presenter said PPAs and third‑party ownership allow schools to avoid capital outlays while purchasing electricity under long‑term contracts; the federal 30% tax credit (described in testimony) and a state transferable credit together make projects more financially attractive.

Committee members pressed presenters on several recurring issues. Representative Lundstrom and Representative Montoya asked who receives the tax benefit and whether the schools themselves are guaranteed to receive the savings produced by third‑party developers. The presenter said the third‑party PPA provider typically claims federal and state credits and reflects those incentives in a lower PPA electricity price, but staff/legal advisors told presenters that specifying a statutory guarantee of a minimum passed‑through savings amount raised legal/competitive concerns and was not included in the draft bill. Several members said that without a statutory guarantee there is no assurance the full economic value of incentives will be delivered to school districts, raising concerns about out‑of‑state investors claiming credits while local districts receive limited benefit.

Other substantive questions addressed program scope, practical implementation and equity. Members asked whether charter and private schools would qualify; presenters said the bill as drafted targets schools receiving state funds (charter schools were discussed explicitly) and that private schools not receiving state funds were not the primary focus. Members also raised operational concerns about districts with many meters or multiple utilities (for example, Gallup‑McKinley and Deming), noting that a district-level rollout requires per‑meter contracts and coordination with local interconnection requirements. The presenter recommended using existing cooperative procurement channels (CES) to run competitive solicitations and standardize legal review for smaller districts.

Supporters who testified during the hearing included the League of Women Voters of New Mexico, Renewable Taos, the New Mexico Tax Credit Alliance and local advocates. Several committee members noted long‑standing capital needs in school facilities (roofs, HVAC) and said districts should weigh basic efficiency and repairs alongside solar projects.

Action and next steps: Representative (mover not clearly attributable in the record) moved to table HB213; Representative Duncan seconded the motion and the committee adopted it. Members asked sponsors and interested parties to refine the bill language on (1) how savings are passed through to districts, (2) eligibility details for private or charter schools, and (3) administrative processes (contracting, interconnection and procurement) to help small districts with multiple meters implement projects.

Ending: Proponents framed the measure as a long‑term investment to shield schools from future utility rate increases and to create local jobs. Committee members broadly supported the objective but asked for statutory and administrative fixes to ensure the financial benefit accrues to New Mexico schools rather than primarily to third‑party investors; sponsors accepted the need for revisions before reconvening on the tax package.