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House committee adopts substitute for HB 568 to address wildfire legal fees, then rolls bill to Thursday
Summary
A House committee adopted a committee substitute to change House Bill 568 — which would provide tax relief tied to legal services for wildfire victims and address gross receipts tax on site-built homes — and agreed to roll the bill to Thursday so sponsors can submit clarifying amendments on scope, definitions and tax language.
A House of Representatives committee adopted a committee substitute for House Bill 568, a measure that would let eligible taxpayers deduct certain tax costs tied to legal services related to recent wildfires and would address gross receipts tax (GRT) on site-built homes, then agreed to roll the bill to Thursday for additional amendments and clarification.
The bill’s sponsor introduced an expert witness, Antonia Redwall, and co-sponsor Representative Joseph Sanchez before summarizing the measure. "This is an important bill for victims of wildfires, not just up in Northern New Mexico, but also Southern New Mexico," Redwall told the committee. She said the bill aims to help families rebuild "generational homes" and to return money to families by allowing deductions for taxes paid on legal services needed to recover damages after fires, including the Hermits Peak/Calf Canyon fires and more recent Salt and South Fork fires.
The substitute combined two elements, Redwall said: the tax treatment for legal services and provisions addressing gross receipts tax on site-built homes. Supporters said the change fixes problems with a prior tax provision that included a statewide cap of $5,000,000 on a gross-receipts-based credit passed last year and produced unequal treatment depending on when households received settlements. "Last year it was a $5,000,000 statewide cap," Redwall said; the current substitute removes that cap so later claimants would not be excluded by an early payout exhausting the cap.
Registered lobbyist Kent Cravens of the New Mexico Association of Realtors spoke in favor: "We're very much in support of this and other kinds of bills that are moving through this session," he said, citing risk mitigation and appropriations for fire preparedness. Other supporters who registered in committee included Gabriela McCarthy, and Deonza Valencia, an attorney representing clients harmed by the Hermits Peak/Calf Canyon fires, who said the bill is "a critical step" toward making affected communities whole.
Committee members raised technical and policy questions during discussion. Questions included whether the substitute limits coverage to the named fires or applies statewide to all federally declared wildfires; whether the measure covers GRT paid on legal services specifically (rather than a broader tax base); and whether reimbursable disaster payments (for example, FEMA funds) would affect eligibility to claim the deduction. Redwall and the sponsor said they are open to clarifying amendments. As presented in committee, the bill ties eligibility to homes destroyed by wildfire in calendar years 2021 through 2023 in some sections and names specific fires in others, which committee members said needed consistent drafting.
Members also pressed on timing and scope. Representative Brett Lord and others said the bill arrived late in session and needed clearer language before moving through additional committees. The sponsor and witness indicated they expected to work with the next committees to refine definitions and to tighten the bill text so it explicitly references the GRT paid on legal services and to consider whether to restore statewide scope or add a sunset provision.
The committee adopted the substitute after a motion and second. Later in the meeting the sponsor agreed to roll the bill until Thursday so that the committee and sponsors could prepare and present a cleaner substitute with the clarifications discussed in committee. No final floor or appropriation vote occurred in this committee; the measure was sent forward with the understanding the sponsor will bring clarifying amendments in the next committee.
Votes at a glance: the committee adopted a committee substitute for House Bill 568 and then rolled the bill to Thursday for further amendment and consideration. The transcript did not record a full roll-call vote tally on the substitute adoption in the committee minutes available here.
Ending: The sponsor and committee members said they would use the short delay to add clearer language on the tax base (GRT on legal services), consider widening the geographic scope to more wildfires, and discuss a potential sunset date before the bill returns to committee.
