Some Roswell downtown businesses could benefit from state legislation on its way to the New Mexico Senate after it passed the House of Representatives Tuesday morning.
The Main Street Fire Suppression Equipment Tax Credit, House Bill 145, is sponsored by state Rep. Javier Martinez (D-Albuquerque), and is intended to help property owners with historic or aging buildings located in designated Main Street economic districts renovate and repurpose the structures. The legislation is especially intended to help businesses in rural areas.
If passed, the legislation would take effect July 1. It calls for creating a tax credit fund with $1 million from state gross receipts taxes.
That fund then would be used to provide eligible businesses with a tax credit of up to 50% of the cost of installing fire suppression systems, provided that the equipment is certified by the state fire marshal. The tax credit would be capped at $50,000, which could be carried over for up to five tax years. But the credit could not be taken if the fire suppression project receives other government funding.
“We think this is one of the most innovative pieces of legislation to help revitalize downtowns,” said Bruce Krasnow, public information officer with the New Mexico Economic Development Department, which oversees the New Mexico Main Street program. “We are pleased that it passed with bipartisan support.”
He added that the EDD thinks the bill probably will pass the Senate before the legislative session ends Feb. 20, given that both Democrats and Republicans have supported it so far.
Prior to Tuesday’s 61-0 House vote, the bill had passed unanimously out of both the House Commerce and Economic Development Committee and the House Taxation and Revenue Committee.
New Mexico Main Street advocated for the legislation after meeting with business owners and government officials from local communities who supported the idea. That included Roswell Mayor Dennis Kintigh.
Krasnow said the idea is to limit the program to Main Street district businesses to begin with, to see how the credit works. He thinks as many as two dozen businesses could participate with the initial $1 million funding.
The Commerce and Economic Development Committee amended the original bill, mostly to make minor language changes. But one change also restricts eligibility for the credit to businesses within a “metropolitan redevelopment area” of a Main Street or Arts & Cultural district in a Class B county.
Roswell and 19 other New Mexico cities have been designated Main Street or Arts & Cultural Districts and are in Class B counties. Roswell also has the Railroad District Metropolitan Redevelopment Area as part of its Main Street district.
The Railroad District MRA is bound by Eighth Street and Second Street from north to south and from Virginia Avenue to Railroad Avenue from west to east, according to city documents.
Bill Morris, Roswell community development manager, said that he thinks the tax credit could be useful to some Roswell property owners.
“Sprinklers are an important component for public safety,” he said, “but they are expensive and difficult to retrofit into older buildings, so I think it could be useful for people to have this credit to help with such projects.”
He added that there are buildings within the Railroad District MRA that would be eligible and that some aren’t being fully utilized because they lack sprinkler systems in certain parts of the structures.
The legislation was supported by the EDD and the Department of Cultural Affairs. The Legislative Finance Committee, in its Fiscal Impact Report, raised several potential issues concerning the proposed legislation. These included that it could cost the Taxation and Revenue Department as much as $26,000 to incorporate the tax credit into its software, that no expiration date is given for the credit and that the tax credit fund might require future authorizations of additional funding.
Senior Writer Lisa Dunlap can be reached at 575-622-7710, ext. 351, or at email@example.com.