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    • 2026 Legislative Wrap-Up

      EconomicPress ReleaseGeneral News Article

       
       

      2026 Legislative Wrap-Up:
      What Passed and What Matters
       
       
      The 2026 New Mexico Legislative Session has officially concluded following the Governor's March 11 deadline to sign or veto legislation passed during the 30-day session. With the bill signing period now complete, the policy and budget decisions made at the Roundhouse are fully settled.
      This year's session included major appropriations and targeted policy changes affecting economic development, workforce, infrastructure, housing, and community investment across the state.
      Below is a summary of key budget investments followed by notable legislation that may impact economic development professionals and the communities they serve.
      Key Economic Development Appropriations
      The state budget includes several appropriations of interest to New Mexico's economic development community, including:
      Special Appropriations to the Economic Development Department:
      • $10 million for quantum computing
      • $49.3 million for quantum benchmarking intiiative to match funds from the federal defense advanced research projects agency
      • $11.6 million for distribution to New Mexico higher education institutions for endowed faculty positions and postdoctoral researchers for the education ecosystem.
      • $2 million for the healthy food financing program
      • $15 million for innovation hubs, including $7 million for start-up costs and $600K for aerospace.
      • $38 million for a single centralized open user facility for applied quantum information science research, including capabilities that meet national security needs for full collaboration with national laboratories and including workforce training space and equipment
      • $3 million for quantum New Mexico Institute
      • $110 million for the research, development, and deployment fund ($40 million for quantum initiatives and $40 million for advanced energy initiatives)
      • $2 million for business recruitment and attraction efforts
      Special Appropriations to the Tourism Department:
      • $1 million for the Roswell air show
      • $18 million for national and international marketing and advertising campaigns
      • $1 million for the four hundredth anniversary wine celebration
      • $1.9 million for grants to tribal and local governments for tourism-related infrastructure projects through the destination forward grant program.
      Economic Development Legislation Signed Into Law
      Alongside budget investments, lawmakers enacted several policy changes relevant to economic development professionals and the communities they serve. These measures include:
      House Bill 154 (Advanced Energy Product Definition) updates the Advanced Energy Equipment Income Tax Credit and Advanced Energy Equipment Corporate Income Tax Credit by revising the definition of "advanced energy product." The bill replaces reliance on federal tax law references with a state-defined list of qualifying products and components, including: solar technologies, wind energy components, battery and energy storage systems, fusion technologies, inverter technologies, and certain designated critical minerals.
      Senate Bill 58 (Extension of Metropolitan Redevelopment Property Tax Exemption) extends the length of time certain properties located in Metropolitan Redevelopment Areas (MRAs) may remain exempt from property tax. The bill increases the exemption period from: 7 years to 14 years.
      House Bill 165 (Payment of Certain IRB Special Assessments) clarifies responsibility for special assessments imposed under the Improvement Special Assessment Act when property is financed using Industrial Revenue Bonds (IRBs).  This clarification allows IRB-financed properties to participate in Property Assessed Clean Energy (PACE) financing programs, expanding financing tools available for commercial and industrial development projects.
      Senate Bill 151 (Corporate Income Tax Changes) ultimately became the Legislature's primary tax policy package during the 2026 session and represents a mixed outcome for New Mexico's business and economic development community. The legislation includes several tax changes expected to increase state revenue, estimated to generate more than $100 million annually by FY28, while also preserving an important economic development incentive by extending the state's High-Wage Jobs Tax Credit, which was scheduled to expire later this year.
      Tax Increase Provisions in SB151
      To increase state revenue, the bill decouples New Mexico from several provisions of federal tax law that currently reduce taxable income for corporations. These changes include eliminating the use of:
      • First-year bonus depreciation
      • First-year expensing for manufacturing facilities
      • Certain business interest deduction provisions
      The legislation also expands the state tax base by including certain income from foreign-controlled corporations.

      Economic Development Incentives in SB 151 
      The bill also includes provisions with positive economic development implications.
      The legislation extends the High-Wage Jobs Tax Credit, one of New Mexico's primary economic development incentives. The credit was scheduled to expire in June of 2026, but the bill extends eligibility for new jobs created before July 1, 2036, providing long-term certainty for employers considering expansion in the state.
      The bill also creates a Gross Receipts Tax deduction for receipts derived from construction materials and labor used in the development of affordable multifamily residential housing projects.
       
      CREDIT: NMIDEA



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      2026 Legislative Wrap-Up