HOUSE BILL 292

52nd legislature - STATE OF NEW MEXICO - first session, 2015

INTRODUCED BY

Andy Nunez

AN ACT

RELATING TO TAX ADMINISTRATION; ENACTING THE ADMINISTRATIVE HEARINGS OFFICE ACT; PROVIDING FOR INDEPENDENT HEARING OFFICERS; CREATING A HEARING OFFICE SEPARATE FROM THE TAXATION AND REVENUE DEPARTMENT FOR ADMINISTRATIVE HEARINGS; PROVIDING POWERS AND DUTIES; PROVIDING PROCEDURES; TRANSFERRING FUNCTIONS, PERSONNEL, APPROPRIATIONS, MONEY, PROPERTY, CONTRACTUAL OBLIGATIONS, STATUTORY REFERENCES AND RULES; REPEALING SECTION 7-1-24.1 NMSA 1978 (BEING LAWS 2013, CHAPTER 27, SECTION 7); CREATING A PRIVATE RIGHT TO REQUEST THE SECRETARY OF TAXATION AND REVENUE TO PROMULGATE, AMEND OR REPEAL A DEPARTMENT RULE; CREATING A PRIVATE RIGHT TO APPEAL TO THE COURT OF APPEALS A RULE PROMULGATED BY THE SECRETARY OR THE SECRETARY'S DENIAL OF A REQUEST TO PROMULGATE, AMEND OR REPEAL A RULE.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 6 of this act may be cited as the "Administrative Hearings Office Act".

     SECTION 2. [NEW MATERIAL] ADMINISTRATIVE HEARINGS OFFICE--CREATED--POWERS AND DUTIES--EMPLOYEES OF THE OFFICE.--

          A. The "administrative hearings office" is created and is administratively attached pursuant to the provisions of Section 9-1-7 NMSA 1978 to the department of finance and administration.

          B. The head of the administrative hearings office is the "chief hearing officer", who shall be appointed by the governor with the advice and consent of the senate for a term of six years, except that the initial term shall begin on July 1, 2015 and shall end on December 31, 2015. In appointing a chief hearing officer, the governor shall select a person who, at the time of appointment, is a licensed New Mexico attorney who has knowledge of the tax law and substantial experience making the record in an administrative hearing suitable for judicial review. The governor shall appoint a chief hearing officer without regard to party affiliation and solely on the grounds of professional experience and competence and fitness to perform the duties of chief hearing officer. The chief may be reappointed to successive terms. The initial chief hearing officer shall be the person who is the chief of the hearings bureau of the taxation and revenue department on July 1, 2015. The chief hearing officer shall be removed only for malfeasance, misfeasance or abuse of office.

          C. The chief hearing officer may:

                (1) adopt and promulgate rules pertaining to administrative hearings; and 

                (2) subject to appropriations, hire and contract for such professional, technical and support staff as needed to carry out the functions of the administrative hearings office; provided that such hiring and contracting be without regard to party affiliation and solely on the grounds of competence and fitness to perform the duties of the position. Employees of the administrative hearings office, except the chief hearing officer, are subject to the provisions of the Personnel Act.

          D. The chief hearing officer shall:

                (1) oversee the administrative hearings office; and

                (2) considering the knowledge and experience of particular hearing officers, efficiency in the hearing process and potential conflicts of interest, assign and distribute the work of the office.

     SECTION 3. [NEW MATERIAL] HEARING OFFICER CODE OF CONDUCT--INDEPENDENCE.--

          A. The chief hearing officer shall:

                (1) adopt and promulgate a hearing officer code of conduct; and

                (2) periodically evaluate each hearing officer's performance for competency, efficiency and professional demeanor in accord with relevant legal standards and the hearing officer code of conduct.

          B. The chief hearing officer shall ensure that each hearing officer has decisional independence; however, the chief hearing officer may:

                (1) consult with a hearing officer about a genuine question of law; and

                (2) review with a hearing officer any issue on appeal addressed by a court of this state. 

           C. The administrative hearings office shall:

                (1) hear all tax protests pursuant to the provisions of the Tax Administration Act;

                (2) hear property tax protests pursuant to the provisions of Sections 7-38-22 and 7-38-23 NMSA 1978;

                (3) conduct all adjudicatory hearings pursuant to the Motor Vehicle Code;

                (4) conduct all driver's license revocation hearings pursuant to the provisions of the Implied Consent Act;

                (5) make and preserve a complete record of all proceedings; and

                (6) maintain confidentiality regarding taxpayer information as required by the provisions of Section 7-1-8 NMSA 1978.

          D. In hearings conducted pursuant to the Tax Administration Act and the Motor Vehicle Code:

                (1) the Rules of Evidence do not apply. The hearing officer may require reasonable substantiation of statements or records tendered, the accuracy or truth of which is in reasonable doubt, to rule on the admissibility of evidence. A taxpayer may request a written ruling on a contested question of evidence in a matter in which the taxpayer has filed a written protest and for which that protest is pending. The administrative hearings office shall issue a copy of its written ruling to the taxation and revenue department at the time the ruling is issued to the taxpayer;

                (2) the Rules of Civil Procedure for the District Courts do not apply. The hearing officer shall conduct a hearing to allow the ample and fair presentation of complaints and defenses. The hearing officer shall hear arguments, permit discovery, entertain and dispose of motions, require written expositions of the case as the circumstances justify and render a decision in accordance with the law and the evidence presented and admitted. A taxpayer may request a written ruling on a contested question of procedure in a matter in which the taxpayer has filed a written protest and for which that protest is pending. The administrative hearings office shall issue a copy of its written ruling to the taxation and revenue department at the time the ruling is issued to the taxpayer; and

                (3) the hearing officer may administer oaths and issue subpoenas for the attendance of witnesses and the production of relevant books and papers.

      SECTION 4. [NEW MATERIAL] CERTAIN ACTIONS PROHIBITED.--A hearing officer shall not:

          A. engage or participate in any way in the enforcement or formulation of general tax policy other than to conduct hearings. A taxpayer or the taxation and revenue department may request that the chief hearing officer determine whether a hearing officer has engaged or participated in the enforcement or formulation of general tax policy and whether that engagement or participation affects the hearing officer's impartiality in a particular matter. To avoid actual or apparent prejudice, the chief hearing officer may designate another hearing officer for the matter; and

          B. engage in ex-parte communications concerning the substantive issues of any matter that has been protested while that matter is pending. If the chief hearing officer determines that a hearing officer has engaged in prohibited ex-parte communications, the chief hearing officer shall designate another hearing officer for that matter.

     SECTION 5. [NEW MATERIAL] TAX PROTESTS--PROCEDURES.--

          A. Upon timely receipt of a tax protest filed pursuant to the provisions of Section 7-1-24 NMSA 1978, the taxation and revenue department shall promptly acknowledge the protest by letter to the protesting taxpayer or the taxpayer's representative. If the protest is not filed in accordance with the provisions of Section 7-1-24 NMSA 1978, the department shall inform the taxpayer of the deficiency and the opportunity to correct it. Within forty-five days after receipt of a protest filed pursuant to the provisions of Section 7-1-24 NMSA 1978 that has not been resolved, the taxation and revenue department shall request from the administrative hearings office a hearing and shall send to the office a copy of the protest. The chief hearing officer shall promptly designate a hearing officer and shall set a date for a hearing to take place within ninety days from the date the protest was filed pursuant to Section 7-1-24 NMSA 1978.

          B. A taxpayer may appear at the hearing on the taxpayer's own behalf or may be represented by a bona fide employee, an attorney, a certified public accountant or, with respect only to tax imposed pursuant to the Income Tax Act, a person who is an enrolled agent for federal income tax purposes. If the taxation and revenue department and the taxpayer agree, the hearing may be conducted via videoconference. At the beginning of the hearing, the hearing officer shall inform the taxpayer of the taxpayer's right to representation. A hearing shall not be open to the public except upon request of the taxpayer. A hearing officer may postpone or continue a hearing at the hearing officer's discretion.

          C. Within thirty days after the hearing, the hearing officer shall inform the taxation and revenue department and the taxpayer in writing of the decision and, pursuant to the provisions of Section 7-1-25 NMSA 1978, of the aggrieved party's right to, and the requirements for perfection of, an appeal from the decision to the court of appeals and of the consequences of a failure to appeal. The written decision shall embody an order granting or denying the relief requested or granting or denying a part of the relief requested, as appropriate.

          D. A taxpayer with two or more protests containing related issues may request that the protests be combined and heard jointly. The hearing officer shall grant the request to combine protests unless it would create an unreasonable burden on the administrative hearings office or the taxation and revenue department.

          E. Nothing in this section shall be construed to authorize a criminal proceeding or to authorize an administrative protest of the issuance of a subpoena or summons.

     SECTION 6. [NEW MATERIAL] MOTOR VEHICLE ADMINISTRATIVE HEARINGS--PROCEDURES.--

          A. A person may dispute the denial of or failure to either allow or deny a license, permit, placard or registration provided for in the Motor Vehicle Code. Upon timely receipt of a protest, the chief hearing officer shall promptly designate a hearing officer to conduct a hearing and shall set a date for the hearing. On that date, the hearing officer shall hear the protest.

          B. A person may appear at a hearing set pursuant to the provisions of Subsection A of this section for the person's self or be represented by a bona fide employee or an attorney. A hearing shall not be open to the public except if held pursuant to the provisions of the Implied Consent Act or upon request of the person. A hearing officer may postpone or continue a hearing.

          C. At the beginning of the hearing, the hearing officer shall inform the person of the person's right to representation. Within thirty days after the hearing, the hearing officer shall inform the protestant in writing of the decision and of the protestant's right to, and the requirements for perfection of, an appeal from the decision to the district court and of the consequences of a failure to appeal. The written decision shall embody an order granting or denying the relief requested or granting such part of the relief requested, as appropriate.

          D. If the protestant or the secretary of taxation and revenue is dissatisfied with the decision and order of the hearing officer, the party may appeal pursuant to the provisions of Section 39-3-1.1 NMSA 1978.

          E. No court of this state has jurisdiction to entertain a proceeding by any person in which the person calls into question the application to that person of any provision of the Motor Vehicle Code, except as a consequence of the appeal by that person to the district court from the action and order of the hearing officer as provided for in this section.

          F. Nothing in this section shall be construed to authorize a criminal proceeding or to authorize an administrative protest of the issuance of a subpoena or summons.  

     SECTION 7. Section 7-1-3 NMSA 1978 (being Laws 1965, Chapter 248, Section 3, as amended) is amended to read:

     "7-1-3. DEFINITIONS.--Unless the context clearly indicates a different meaning, the definitions of words and phrases as they are stated in this section are to be used, and whenever in the Tax Administration Act these words and phrases appear, the singular includes the plural and the plural includes the singular:

          A. "automated clearinghouse transaction" means an electronic credit or debit transmitted through an automated clearinghouse payable to the state treasurer and deposited with the fiscal agent of New Mexico;

          B. "department" means the taxation and revenue department, the secretary or any employee of the department exercising authority lawfully delegated to that employee by the secretary;

          C. "electronic payment" means a payment made by automated clearinghouse deposit, any funds wire transfer system or a credit card, debit card or electronic cash transaction through the internet;

          D. "employee of the department" means any employee of the department, including the secretary, or any person acting as agent or authorized to represent or perform services for the department in any capacity with respect to any law made subject to administration and enforcement under the provisions of the Tax Administration Act;

          E. "financial institution" means any state or federally chartered, federally insured depository institution;

          F. "hearing officer" means a person who has been designated by the chief hearing officer to serve as a hearing officer and who is:

                (1) the chief hearing officer;

                (2) an employee of the administrative hearings office; or

                (3) a contractor of the administrative hearings office;

          [F.] G. "Internal Revenue Code" means the Internal Revenue Code of 1986, as that code may be amended or its sections renumbered;

          [G.] H. "levy" means the lawful power, hereby invested in the secretary, to take into possession or to require the present or future surrender to the secretary or the secretary's delegate of any property or rights to property belonging to a delinquent taxpayer;

          [H.] I. "local option gross receipts tax" means a tax authorized to be imposed by a county or municipality upon the taxpayer's gross receipts, as that term is defined in the Gross Receipts and Compensating Tax Act, and required to be collected by the department at the same time and in the same manner as the gross receipts tax; "local option gross receipts tax" includes the taxes imposed pursuant to the Municipal Local Option Gross Receipts Taxes Act, Supplemental Municipal Gross Receipts Tax Act, County Local Option Gross Receipts Taxes Act, Local Hospital Gross Receipts Tax Act, County Correctional Facility Gross Receipts Tax Act and such other acts as may be enacted authorizing counties or municipalities to impose taxes on gross receipts, which taxes are to be collected by the department in the same time and in the same manner as it collects the gross receipts tax;

          [I.] J. "managed audit" means a review and analysis conducted by a taxpayer under an agreement with the department to determine the taxpayer's compliance with a tax administered pursuant to the Tax Administration Act and the presentation of the results to the department for assessment of tax found to be due;

          [J.] K. "net receipts" means the total amount of money paid by taxpayers to the department in a month pursuant to a tax or tax act less any refunds disbursed in that month with respect to that tax or tax act;

          [K.] L. "overpayment" means an amount paid, pursuant to any law subject to administration and enforcement under the provisions of the Tax Administration Act, by a person to the department or withheld from the person in excess of tax due from the person to the state at the time of the payment or at the time the amount withheld is credited against tax due;

          [L.] M. "paid" includes the term "paid over";

          [M.] N. "pay" includes the term "pay over";

          [N.] O. "payment" includes the term "payment over";

          [O.] P. "person" means any individual, estate, trust, receiver, cooperative association, club, corporation, company, firm, partnership, limited liability company, limited liability partnership, joint venture, syndicate, other association or gas, water or electric utility owned or operated by a county or municipality; "person" also means, to the extent permitted by law, a federal, state or other governmental unit or subdivision, or an agency, department or instrumentality thereof; and "person", as used in Sections 7-1-72 through

7-1-74 NMSA 1978, also includes an officer or employee of a corporation, a member or employee of a partnership or any individual who, as such, is under a duty to perform any act in respect of which a violation occurs;

          [P.] Q. "property" means property or rights to property;

          [Q.] R. "property or rights to property" means any tangible property, real or personal, or any intangible property of a taxpayer;

          [R.] S. "return" means any tax or information return, declaration of estimated tax or claim for refund, including any amendments or supplements to the return, required or permitted pursuant to a law subject to administration and enforcement pursuant to the Tax Administration Act and filed with the secretary or the secretary's delegate by or on behalf of any person;

          [S.] T. "return information" means a taxpayer's name, address, government-issued identification number and other identifying information; any information contained in or derived from a taxpayer's return; any information with respect to any actual or possible administrative or legal action by an employee of the department concerning a taxpayer's return, such as audits, managed audits, denial of credits or refunds, assessments of tax, penalty or interest, protests of assessments or denial of refunds or credits, levies or liens; or any other information with respect to a taxpayer's return or tax liability that was not obtained from public sources or that was created by an employee of the department; but "return information" does not include statistical data or other information that cannot be associated with or directly or indirectly identify a particular taxpayer;

          [T.] U. "secretary" means the secretary of taxation and revenue and, except for purposes of Subsection B of Section

7-1-4 NMSA 1978 [and Subsection E of Section 7-1-24 NMSA 1978], also includes the deputy secretary or a division director or deputy division director delegated by the secretary;

          [U.] V. "secretary or the secretary's delegate" means the secretary or any employee of the department exercising authority lawfully delegated to that employee by the secretary;

          [V.] W. "security" means money, property or rights to property or a surety bond;

          [W.] X. "state" means any state of the United States, the District of Columbia, the commonwealth of Puerto Rico and any territory or possession of the United States;

          [X.] Y. "tax" means the total amount of each tax imposed and required to be paid, withheld and paid or collected and paid under provision of any law made subject to administration and enforcement according to the provisions of the Tax Administration Act and, unless the context otherwise requires, includes the amount of any interest or civil penalty relating thereto; "tax" also means any amount of any abatement of tax made or any credit, rebate or refund paid or credited by the department under any law subject to administration and enforcement under the provisions of the Tax Administration Act to any person contrary to law and includes, unless the context requires otherwise, the amount of any interest or civil penalty relating thereto;

          [Y. "taxpayer" means a person liable for payment of any tax, a person responsible for withholding and payment or for collection and payment of any tax a person to whom an assessment has been made, if the assessment remains unabated or the amount thereof has not been paid, or a person who entered into a special agreement to assume the liability of gross receipts tax or governmental gross receipts tax of another person and the special agreement was approved by the secretary pursuant to the Tax Administration Act; and]

          Z. "tax return preparer" means a person who prepares for others for compensation or who employs one or more persons to prepare for others for compensation any return of income tax, a substantial portion of any return of income tax, any claim for refund with respect to income tax or a substantial portion of any claim for refund with respect to income tax; provided that a person shall not be a "tax return preparer" merely because such person:

                (1) furnishes typing, reproducing or other mechanical assistance;

                (2) is an employee who prepares an income tax return or claim for refund with respect to an income tax return of the employer, or of an officer or employee of the employer, by whom the person is regularly and continuously employed; or

                (3) prepares as a trustee or other fiduciary an income tax return or claim for refund with respect to income tax for any person; and

          AA. "taxpayer" means a person liable for payment of any tax; a person responsible for withholding and payment or for collection and payment of any tax; a person to whom an assessment has been made, if the assessment remains unabated or the amount thereof has not been paid; or a person who entered into a special agreement to assume the liability of gross receipts tax or governmental gross receipts tax of another person and the special agreement was approved by the secretary pursuant to the Tax Administration Act." 

     SECTION 8. Section 7-1-4.2 NMSA 1978 (being Laws 2003, Chapter 398, Section 2) is amended to read:

     "7-1-4.2. NEW MEXICO TAXPAYER BILL OF RIGHTS.--The rights afforded New Mexico taxpayers during the assessment, collection and enforcement of any tax administered by the department as set forth in the Tax Administration Act include:

          A. the right to available public information and prompt and courteous tax assistance;

          B. the right to be represented or advised by counsel or other qualified representatives at any time in administrative interactions with the department in accordance with the provisions of Section 7-1-24 NMSA 1978 or the administrative hearings office in accordance with the provisions of the Administrative Hearings Office Act;

          C. the right to have audits, inspections of records and meetings conducted at a reasonable time and place in accordance with the provisions of Section 7-1-11 NMSA 1978;

          D. the right to have the department conduct its audits in a timely and expeditious manner and be entitled to the tolling of interest as provided in the Tax Administration Act;

          E. the right to obtain nontechnical information that explains the procedures, remedies and rights available during audit, protest, appeals and collection proceedings pursuant to the Tax Administration Act;

          F. the right to be provided with an explanation of the results of and the basis for audits, assessments or denials of refunds that identify any amount of tax, interest or penalty due;

          G. the right to seek review, through formal or informal proceedings, of any findings or adverse decisions relating to determinations during audit or protest procedures in accordance with the provisions of Section 7-1-24 NMSA 1978 and the Administrative Hearings Office Act;

          H. the right to have the taxpayer's tax information kept confidential unless otherwise specified by law, in accordance with Section 7-1-8 NMSA 1978;

          I. the right to abatement of an assessment of taxes determined to have been incorrectly, erroneously or illegally made, as provided in Section 7-1-28 NMSA 1978 and the right to seek a compromise of an asserted tax liability by obtaining a written determination of liability or nonliability when the secretary in good faith is in doubt of the liability as provided in Section 7-1-20 NMSA 1978;

           J. upon receipt of a tax assessment, the right to be informed clearly that if the assessment is not paid, secured, protested or otherwise provided for in accordance with the provisions of Section 7-1-16 NMSA 1978, the taxpayer will be a delinquent taxpayer and, upon notice of delinquency, the right to timely notice of any collection actions that will require sale or seizure of the taxpayer's property in accordance with the provisions of the Tax Administration Act; and

          K. the right to procedures for payment of tax obligations by installment payment agreements, in accordance with Section 7-1-21 NMSA 1978."

     SECTION 9. Section 7-1-8.3 NMSA 1978 (being Laws 2009, Chapter 243, Section 5) is amended to read:

     "7-1-8.3. INFORMATION THAT MAY BE REVEALED TO PUBLIC.--An employee of the department may reveal:

          A. information obtained through the administration of a law not subject to administration and enforcement under the provisions of the Tax Administration Act to the extent that revealing that information is not otherwise prohibited by law;

          B. return information with respect to the taxes or tax acts administered pursuant to Subsection B of Section 7-1-2 NMSA 1978, except that:

                (1) return information for or relating to a period prior to July 1, 1985 with respect to [Sections 7-25-1 through 7-25-9 and 7-26-1 through 7-26-8 NMSA 1978] the Resources Excise Tax Act and the Severance Tax Act may be revealed only to a committee of the legislature for a valid legislative purpose;

                (2) except as provided in Paragraph (3) of this subsection, contracts and other agreements between the taxpayer and other parties and the proprietary information contained in those contracts and agreements shall not be revealed without the consent of all parties to the contract or agreement; and

                (3) audit workpapers and the proprietary information contained in the workpapers shall not be revealed except to:

                     (a) the [minerals management service] bureau of safety and environmental enforcement of the United States department of the interior, if production occurred on federal land;

                     (b) a person having a legal interest in the property that is subject to the audit;

                     (c) a purchaser of products severed from a property subject to the audit; or

                     (d) the authorized representative of any of the persons in Subparagraphs (a) through (c) of this paragraph. This paragraph does not prohibit the revelation of proprietary information contained in the workpapers that is also available from returns or from other sources not subject to the provisions of Section 7-1-8 NMSA 1978;

          C. return information with respect to the taxes, surtaxes, advance payments or tax acts administered pursuant to Subsection C of Section 7-1-2 NMSA 1978;

          D. a decision and order made by a hearing officer pursuant to [Section 7-1-24 NMSA 1978] the provisions of the Administrative Hearings Office Act with respect to a protest filed with the secretary on or after July 1, 1993;

          E. any written ruling on questions of evidence or procedure made by a hearing officer pursuant to [Section 7-1-24 NMSA 1978] the provisions of the Administrative Hearings Office Act; provided that the name and identification number of the taxpayer requesting the ruling shall not be revealed; and

          F. return information included in a notice of lien or release or extinguishment of lien."

     SECTION 10. Section 7-1-8.4 NMSA 1978 (being Laws 2009, Chapter 243, Section 6) is amended to read:

     "7-1-8.4. INFORMATION THAT MAY BE REVEALED TO JUDICIAL BODIES OR WITH RESPECT TO JUDICIAL PROCEEDINGS OR INVESTIGATIONS AND TO ADMINISTRATIVE HEARINGS OFFICE.--An employee of the department may reveal to:

          A. a district court, an appellate court or a federal court, a return or return information:

                (1) in response to an order thereof in an action relating to taxes or an action for tax fraud or any other crime that may involve taxes due to the state and in which the information sought is about a taxpayer [who] that is party to the action and is material to the inquiry, in which case only that information may be required to be produced in court and admitted in evidence subject to court order protecting the confidentiality of the information and no more;

                (2) in an action in which the department is attempting to enforce an act with which the department is charged or to collect a tax; or

                (3) in any matter in which the department is a party and the taxpayer has put the taxpayer's own liability for taxes at issue, in which case only that information regarding the taxpayer [who] that is party to the action may be produced, but this shall not prevent revelation of department policy or interpretation of law arising from circumstances of a taxpayer [who] that is not a party;

          B. the Bernalillo county metropolitan court, upon that court's request, the last known address and the date of that address for every person the court certifies to the department as a person who owes fines, fees or costs to the court or who has failed to appear pursuant to a court order or a promise to appear;

          C. a magistrate court, upon the magistrate court's request, the last known address and the date of that address for every person the court certifies to the department as a person who owes fines, fees or costs to the court or who has failed to appear pursuant to a court order or a promise to appear;

          D. a district attorney, a state district court grand jury or federal grand jury, information for an investigation of or proceeding related to an alleged criminal violation of the tax laws; [and]

          E. a third party subject to a subpoena or levy issued pursuant to the provisions of the Tax Administration Act, the identity of the taxpayer involved, the taxes or tax acts involved and the nature of the proceeding; and

          F. the administrative hearings office, information in relation to a protest or other hearing, in which case only that information regarding the taxpayer that is a party to the action may be produced, but this shall not prevent revelation of department policy or interpretation of law arising from circumstances of a taxpayer that is not a party. The office shall maintain confidentiality regarding taxpayer information as required by the provisions of Section 7-1-8 NMSA 1978."

     SECTION 11. Section 7-1-22 NMSA 1978 (being Laws 1965, Chapter 248, Section 24, as amended) is amended to read:

     "7-1-22. EXHAUSTION OF ADMINISTRATIVE REMEDIES.--No court of this state has jurisdiction to entertain any proceeding by a taxpayer in which the taxpayer calls into question the taxpayer's liability for any tax or the application to the taxpayer of any provision of the Tax Administration Act, except as a consequence of the appeal by the taxpayer to the court of appeals from the [action and order of the secretary, all as specified in Section 7-1-24 NMSA 1978] order of a hearing officer, or except as a consequence of a claim for refund as specified in Section 7-1-26 NMSA 1978."

     SECTION 12. Section 7-1-24 NMSA 1978 (being Laws 1965, Chapter 248, Section 26, as amended) is amended to read:

     "7-1-24. DISPUTING LIABILITIES--ADMINISTRATIVE PROTEST.--

          A. [Any] A taxpayer may dispute:

                (1) the assessment to the taxpayer of any amount of tax;

                (2) the application to the taxpayer of any provision of the Tax Administration Act except the issuance of a subpoena or summons; or

                (3) the denial of or failure either to allow or to deny a:

                     (a) credit or rebate; or

                     (b) claim for refund made in accordance with Section 7-1-26 NMSA 1978.

          B. The taxpayer may dispute a matter described in Subsection A of this section by filing with the secretary a written protest. Every protest shall identify the taxpayer and the tax credit, rebate, property or provision of the Tax Administration Act involved and state the grounds for the taxpayer's protest and the affirmative relief requested. The statement of grounds for protest shall specify individual grounds upon which the protest is based and a summary statement of the evidence, if any, expected to be produced supporting each ground asserted; provided that the taxpayer may supplement the statement at any time prior to ten days before [any] the hearing conducted on the protest pursuant to [Section 7-1-24.1 NMSA 1978] the provisions of the Administrative Hearings Office Act or, if a scheduling order has been issued, in accordance with the scheduling order. The secretary may, in appropriate cases, provide for an informal conference before [setting] a hearing of the protest is set by the administrative hearings office or before acting on [any] a claim for refund. In the case of an assessment of tax by the department, a protest may be filed without making payment of the amount assessed.

          C. [Any] A protest by a taxpayer shall be filed within ninety days of the date of the mailing to or service upon the taxpayer by the department of the notice of assessment or other peremptory notice or demand, the date of mailing or filing a return, the date of the application to the taxpayer of the applicable provision of the Tax Administration Act, the date of denial of a claim pursuant to Section [7-1-24.1] 7-1-26 NMSA 1978 or the last date upon which the department was required to take action on the claim but failed to take action. If a protest is not filed within the time required, the secretary may proceed to enforce collection of any tax if the taxpayer is delinquent within the meaning of Section 7-1-16 NMSA 1978. The fact that the department did not mail the assessment or other peremptory notice or demand by certified or registered mail or otherwise demand and receive acknowledgment of receipt by the taxpayer shall not be deemed to demonstrate the taxpayer's inability to protest within the required time.

          D. No proceedings other than those to enforce collection of [any] an amount assessed as tax and to protect the interest of the state by injunction, as provided in Sections 7-1-31, 7-1-33, 7-1-34, 7-1-40, 7-1-53, 7-1-56 and

7-1-58 NMSA 1978, are stayed by timely filing of a protest [under] pursuant to the provisions of this section.

          E. Nothing in this section shall be construed to authorize [any] a criminal [proceedings hereunder] proceeding or to authorize an administrative protest of the issuance of a subpoena or summons."

     SECTION 13. Section 7-1-25 NMSA 1978 (being Laws 1965, Chapter 248, Section 27, as amended) is amended to read:

     "7-1-25. APPEALS FROM [SECRETARY'S] HEARING OFFICER'S DECISION AND ORDER.--

          A. If the protestant or secretary is dissatisfied with the decision and order of the hearing officer, the party may appeal to the court of appeals for further relief, but only to the same extent and upon the same theory as was asserted in the hearing before the hearing officer. All such appeals shall be upon the record made at the hearing and shall not be de novo. All such appeals to the court of appeals shall be taken within thirty days of the date of mailing or delivery of the written decision and order of the hearing officer to the protestant, and, if not so taken, the decision and order are conclusive.

          B. The procedure for perfecting an appeal under this section to the court of appeals shall be as provided by the Rules of Appellate Procedure.

          C. Upon appeal, the court shall set aside a decision and order of the hearing officer only if found to be:

                (1) arbitrary, capricious or an abuse of discretion;

                (2) not supported by substantial evidence in the record; or

                (3) otherwise not in accordance with the law.

          D. If the secretary appeals a decision of the hearing officer and the court's decision, from which either no appeal is taken or no appeal may be taken, upholds the decision of the hearing officer, the court shall award reasonable [attorney's] attorney fees to the protestant. If the decision upholds the hearing officer's decision only in part, the award shall be limited to reasonable [attorney's] attorney fees associated with the portion upheld."

     SECTION 14. Section 7-1-26 NMSA 1978 (being Laws 1965, Chapter 248, Section 28, as amended) is amended to read:

     "7-1-26. DISPUTING LIABILITIES--CLAIM FOR CREDIT, REBATE OR REFUND.--

          A. [Any] A person who believes that an amount of tax has been paid by or withheld from that person in excess of that for which the person was liable, who has been denied any credit or rebate claimed or who claims a prior right to property in the possession of the department pursuant to a levy made under authority of Sections 7-1-31 through 7-1-34 NMSA 1978 may claim a refund by directing to the secretary, within the time limited by the provisions of Subsections D and E of this section, a written claim for refund. Except as provided in Subsection I of this section, a refund claim shall include:

                (1) the taxpayer's name, address and identification number;

                (2) the type of tax for which a refund is being claimed, the credit or rebate denied or the property levied upon;

                (3) the sum of money or other property being claimed;

                (4) with respect to refund, the period for which overpayment was made; and

                (5) a brief statement of the facts and the law on which the claim is based, which may be referred to as the "basis for the refund".

          B. The secretary or the secretary's delegate may allow the claim in whole or in part or may deny the claim.

                (1) If the claim is denied in whole or in part in writing, no claim may be refiled with respect to that which was denied, but the person, within ninety days after either the mailing or delivery of the denial of all or any part of the claim, may elect to pursue one, but not more than one, of the remedies in Subsection C of this section.

                (2) If the department has neither granted nor denied any portion of a claim for refund within one hundred twenty days of the date the claim was mailed or delivered to the department, the person may refile it within the time limits set forth in Subsection D of this section or may within ninety days elect to pursue one, but only one, of the remedies in Subsection C of this section. After the expiration of the two hundred ten days from the date the claim was mailed or delivered to the department, the department may not approve or disapprove the claim unless the person has pursued one of the remedies under Subsection C of this section.

          C. A person may elect to pursue [one, but only] no more than one of the remedies in Paragraphs (1) and (2) of this subsection. [In any case, if] A person [does timely pursue] who timely pursues more than one remedy [the person] shall be deemed to have elected the first remedy invoked. The [remedies are as follows: (1) the] person may:

                (1) direct to the secretary, pursuant to the provisions of Section 7-1-24 NMSA 1978, a written protest [against the denial of, or failure to either allow or deny, the claim or portion of the claim] that shall set forth:

                     (a) the circumstances of: 1) an alleged overpayment; 2) a denied credit; 3) a denied rebate; or 4) a denial of a prior right to property levied upon by the department;

                     (b) an allegation that, because of that overpayment or denial, the state is indebted to the taxpayer for a specified amount, including any allowed interest, or for the property;

                     (c) demanding the refund to the taxpayer of that amount or that property; and

                     (d) reciting the facts of the claim for refund; or

                (2) [the person may] commence a civil action in the district court for Santa Fe county by filing a complaint setting forth the circumstance of the claimed overpayment, denied credit or rebate or denial of a prior right to property levied upon by the department alleging that on account thereof the state is indebted to the plaintiff in the amount or property stated, together with any interest allowable, demanding the refund to the plaintiff of that amount or property and reciting the facts of the claim for refund. The plaintiff or the secretary may appeal from any final decision or order of the district court to the court of appeals.

          D. Except as otherwise provided in Subsection E of this section, no credit or refund of any amount may be allowed or made to any person unless as the result of a claim made by that person as provided in this section:

                (1) within three years of the end of the calendar year in which:

                     (a) the payment was originally due or the overpayment resulted from an assessment by the department pursuant to Section 7-1-17 NMSA 1978, whichever is later;

                     (b) the final determination of value occurs with respect to any overpayment that resulted from a disapproval by any agency of the United States or the state of New Mexico or any court of increase in value of a product subject to taxation under the Oil and Gas Severance Tax Act, the Oil and Gas Conservation Tax Act, the Oil and Gas Emergency School Tax Act, the Oil and Gas Ad Valorem Production Tax Act or the Natural Gas Processors Tax Act;

                     (c) property was levied upon pursuant to the provisions of the Tax Administration Act; or

                     (d) an overpayment of New Mexico tax resulted from: 1) an internal revenue service audit adjustment or a federal refund paid due to an adjustment of an audit by the internal revenue service or an amended federal return; or 2) making a change to a federal return for which federal approval is required by the Internal Revenue Code;

                (2) when an amount of a claim for credit under the provisions of the Investment Credit Act, Laboratory Partnership with Small Business Tax Credit Act or Technology Jobs Tax Credit Act or for the rural job tax credit pursuant to Section 7-2E-1.1 NMSA 1978 or similar credit has been denied, the taxpayer may claim a refund of the credit no later than one year after the date of the denial;

                (3) when a taxpayer under audit by the department has signed a waiver of the limitation on assessments on or after July 1, 1993 pursuant to Subsection F of Section

7-1-18 NMSA 1978, the taxpayer may file a claim for refund of the same tax paid for the same period for which the waiver was given, until a date one year after the later of the date of the mailing of an assessment issued pursuant to the audit, the date of the mailing of final audit findings to the taxpayer or the date a proceeding is begun in court by the department with respect to the same tax and the same period;

                (4)  if the payment of an amount of tax was not made within three years of the end of the calendar year in which the original due date of the tax or date of the assessment of the department occurred, a claim for refund of that amount of tax can be made within one year of the date on which the tax was paid; or

                (5) when a taxpayer has been assessed a tax on or after July 1, 1993 under Subsection B, C or D of Section

7-1-18 NMSA 1978 and when the assessment applies to a period ending at least three years prior to the beginning of the year in which the assessment was made, the taxpayer may claim a refund for the same tax for the period of the assessment or for any period following that period within one year of the date of the assessment unless a longer period for claiming a refund is provided in this section.

          E. No credit or refund shall be allowed or made to any person claiming a refund of gasoline tax under Section

7-13-11 NMSA 1978 unless notice of the destruction of the gasoline was given the department within thirty days of the actual destruction and the claim for refund is made within six months of the date of destruction. No credit or refund shall be allowed or made to any person claiming a refund of gasoline tax under Section 7-13-17 NMSA 1978 unless the refund is claimed within six months of the date of purchase of the gasoline and the gasoline has been used at the time the claim for refund is made.

          F. If as a result of an audit by the department or a managed audit covering multiple periods an overpayment of tax is found in any period under the audit, that overpayment may be credited against an underpayment of the same tax found in another period under audit pursuant to Section 7-1-29 NMSA 1978, provided that the taxpayer files a claim for refund for the overpayments identified in the audit.
          G. Any refund of tax paid under any tax or tax act administered under Subsection B of Section 7-1-2 NMSA 1978 may be made, at the discretion of the department, in the form of credit against future tax payments if future tax liabilities in an amount at least equal to the credit amount reasonably may be expected to become due.

          H. For the purposes of this section, [the term] "oil and gas tax return" means a return reporting tax due with respect to oil, natural gas, liquid hydrocarbons, carbon dioxide, helium or nonhydrocarbon gas pursuant to the Oil and Gas Severance Tax Act, the Oil and Gas Conservation Tax Act, the Oil and Gas Emergency School Tax Act, the Oil and Gas Ad Valorem Production Tax Act, the Natural Gas Processors Tax Act or the Oil and Gas Production Equipment Ad Valorem Tax Act.

          I. The filing of a fully completed original income tax return, corporate income tax return, corporate income and franchise tax return, estate tax return or special fuel excise tax return that shows a balance due the taxpayer or a fully completed amended income tax return, an amended corporate income tax return, an amended corporate income and franchise tax return, an amended estate tax return, an amended special fuel excise tax return or an amended oil and gas tax return that shows a lesser tax liability than the original return constitutes the filing of a claim for refund for the difference in tax due shown on the original and amended returns." 

     SECTION 15. Section 7-1-29.1 NMSA 1978 (being Laws 2003, Chapter 398, Section 12) is amended to read:

     "7-1-29.1. AWARDING OF COSTS AND FEES.--

          A. In any administrative or court proceeding that is brought by or against the taxpayer on or after July 1, 2003 in connection with the determination, collection or refund of any tax, interest or penalty for a tax governed by the provisions of the Tax Administration Act, the taxpayer shall be awarded a judgment or a settlement for reasonable administrative costs incurred in connection with an administrative proceeding with the department or the administrative hearings office or reasonable litigation costs incurred in connection with a court proceeding, if the taxpayer is the prevailing party.

          B. As used in this section:

                (1) "administrative proceeding" means any procedure or other action before the department or the administrative hearings office;

                (2) "court proceeding" means any civil action brought in state district court;

                (3) "reasonable administrative costs" means:

                     (a) any administrative fees or similar charges imposed by the department or the administrative hearings office; and

                     (b) actual charges for: 1) filing fees, court reporter fees, service of process fees and similar expenses; 2) the services of expert witnesses; 3) any study, analysis, report, test or project reasonably necessary for the preparation of the party's case; and 4) fees and costs paid or incurred for the services in connection with the proceeding of attorneys or of certified public accountants who are authorized to practice [before the department] in the context of an administrative proceeding; and

                (4) "reasonable litigation costs" means:

                     (a) reasonable court costs; and

                     (b) actual charges for: 1) filing fees, court reporter fees, service of process fees and similar expenses; 2) the services of expert witnesses; 3) any study, analysis, report, test or project reasonably necessary for the preparation of the party's case; and 4) fees and costs paid or incurred for the services of attorneys in connection with the proceeding.

          C. For purposes of this section:

                (1) the taxpayer is the prevailing party if the taxpayer has:

                     (a) substantially prevailed with respect to the amount in controversy; or

                     (b) substantially prevailed with respect to most of the issues involved in the case or the most significant issue or set of issues involved in the case;

                (2) the taxpayer shall not be treated as the prevailing party if, prior to July 1, 2015, the department, or, on or after July 1, 2015, the hearing officer, establishes that the position of the department in the proceeding was based upon a reasonable application of the law to the facts of the case. For purposes of this paragraph, the position of the department shall be presumed not to be based upon a reasonable application of the law to the facts of the case if:

                     (a) the department did not follow [its] applicable published guidance in the proceeding; or

                     (b) the assessment giving rise to the proceeding is not supported by substantial evidence determined at the time of the issuance of the assessment;

                (3) as used in Subparagraph (a) of Paragraph (2) of this subsection, "applicable published guidance" means:

                     (a) department or administrative hearings office regulations, information releases, instructions, notices, technical advice memoranda and announcements; and

                     (b) private letter rulings and letters issued by the department to the taxpayer; and

                (4) the determination of whether the taxpayer is the prevailing party and the amount of reasonable litigation costs or reasonable administrative costs shall be made by agreement of the parties or:

                     (a) in the case where the final determination with respect to the tax, interest or penalty is made in an administrative proceeding, by the [department] hearing officer; or

                     (b) in the case where the final determination is made by the court, the court.

          D. An order granting or denying in whole or in part an award for reasonable litigation costs pursuant to Subsection A of this section in a court proceeding may be incorporated as a part of the decision or judgment in the court proceeding and shall be subject to appeal in the same manner as the decision or judgment. A decision or order granting or denying in whole or in part an award for reasonable administrative costs pursuant to Subsection A of this section by [the department] a hearing officer shall be reviewable in the same manner as a decision of [the department] a hearing officer.

          E. No agreement for or award of reasonable administrative costs or reasonable litigation costs in any administrative or court proceeding pursuant to Subsection A of this section shall exceed the lesser of twenty percent of the amount of the settlement or judgment or fifty thousand dollars ($50,000). A taxpayer awarded administrative litigation costs pursuant to this section may not receive an award of attorney fees pursuant to Subsection D of Section 7-1-25 NMSA 1978."

     SECTION 16. Section 7-38-21 NMSA 1978 (being Laws 1973, Chapter 258, Section 61, as amended) is amended to read:

     "7-38-21. PROTESTS--ELECTION OF REMEDIES.--

          A. A property owner may protest the value or classification determined for [his] the property owner's property for property taxation purposes, the allocation of value of [his] the property to a particular governmental unit or a denial of a claim for an exemption or for a limitation on increase in value either by:

                (1) filing, as provided in the Property Tax Code, a petition of protest with:

                     (a) the [director] administrative hearings office; or

                     (b) the county assessor [as provided in the Property Tax Code]; or

                (2) filing a claim for refund after paying [his] the property owner's taxes as provided in the Property Tax Code.

          B. The initiation of a protest under Paragraph (1) of Subsection A of this section is an election to pursue that remedy and is an unconditional and irrevocable waiver of the right to pursue the remedy provided [under] in Paragraph (2) of Subsection A of this section.

          C. A property owner may also protest the application to [his] the property owner's property of any administrative fee adopted pursuant to Section 7-38-36.1 NMSA 1978 by filing a claim for refund after paying [his] the property owner's taxes as provided in the Property Tax Code."

     SECTION 17. Section 7-38-22 NMSA 1978 (being Laws 1973, Chapter 258, Section 62, as amended) is amended to read:

     "7-38-22. PROTESTING VALUES, CLASSIFICATION, ALLOCATION OF VALUES AND DENIAL OF EXEMPTION DETERMINED BY THE DIVISION.--

          A. A property owner may protest the value or classification determined by the division for [his] the property owner's property for property taxation purposes or the division's allocation of value of [his] the property owner's property to a particular governmental unit or the denial of a claim for an exemption by filing a petition with the [director] administrative hearings office. Filing a petition in accordance with this section entitles a property owner to a hearing on [his] the property owner's protest.

          B. Petitions shall:

                (1) be filed [with the division] no later than thirty days after the mailing by the division of the notice of valuation;

                (2) state the property owner's name and address and the description of the property;

                (3) state why the property owner believes the value, classification, [the] allocation of value or denial of an exemption is incorrect and what [he] the property owner believes the correct value, classification, allocation of value or exemption to be;

                (4) state the value, classification, allocation of value or exemption that is not in controversy; and

                (5) contain such other information as the [division] administrative hearings office may by [regulation] rule require.

          C. The [division] administrative hearings office shall notify the director and the property owner by certified mail of the date, time and place that [he] the parties may appear before the [director] administrative hearings office to [support his] present evidence related to the petition. The notice shall be mailed at least fifteen days prior to the hearing date.

          D. The director may provide for an informal conference on the protest before the hearing."

     SECTION 18. Section 7-38-23 NMSA 1978 (being Laws 1973, Chapter 258, Section 63, as amended) is amended to read:

     "7-38-23. PROTEST HEARINGS--VERBATIM RECORD--ACTION BY HEARING OFFICER--TIME LIMITATIONS.--

          A. Except for the rules relating to discovery, the technical rules of evidence and the Rules of Civil Procedure for the District Courts do not apply at a protest [hearings before the hearing officer] hearing conducted pursuant to the provisions of the Property Tax Code, but the [hearings] hearing shall be conducted so that an ample opportunity is provided for the presentation of complaints and defenses. All testimony shall be taken under oath. A verbatim record of the hearings shall be made but need not be transcribed unless required for appeal purposes. A hearing officer shall be designated by the [secretary] chief hearing officer of the administrative hearings office to conduct the hearing.

          B. Final action taken by the hearing officer on a petition shall be by written order. The hearing officer's order shall be made within thirty days after the date of the hearing, but this time limitation may be extended by agreement of the department and the protestant. A copy of the order shall be sent immediately by certified mail to the property owner. A copy of the order shall also be sent to the county assessor.

          C. All protests shall be decided within one hundred twenty days of the date the protest is filed unless the parties otherwise agree. The protest shall be denied if the property owner or [his] the property owner's authorized representative fails, without reasonable justification, to appear at the hearing.

          D. The hearing officer's order shall be in the name of the [secretary] chief hearing officer, dated, state the changes to be made in the valuation records, if any, and direct the county assessor to take appropriate action. The department shall make any changes in its valuation records required by the order.

          E. Changes in the valuation records shall clearly indicate that the prior entry has been superseded by an order of the hearing officer.

          F. The department shall maintain a file of all orders made pursuant to this section. The file shall be open for public inspection.

          G. If an order of the hearing officer is appealed under Section 7-38-28 NMSA 1978, the department shall immediately notify the appropriate county assessor of the appeal. Notations shall be made in the valuation records of the assessor and the department indicating the pendency of the appeal."

     SECTION 19. Section 7-38-28 NMSA 1978 (being Laws 1973, Chapter 258, Section 68, as amended) is amended to read:

     "7-38-28. APPEALS FROM ORDERS OF THE [DIRECTOR] HEARING OFFICER OR COUNTY VALUATION PROTESTS BOARDS.--

          A. A property owner may appeal an order made by [the director] a hearing officer or a county valuation protests board by filing an appeal pursuant to the provisions of Section 39-3-1.1 NMSA 1978.

          B. The director shall notify the appropriate county assessor of the decision and order of the district court and shall direct the assessor to take appropriate action to comply with the decision and order."

     SECTION 20. Section 9-11-6.2 NMSA 1978 (being Laws 1995, Chapter 31, Section 3) is amended to read:

     "9-11-6.2. ADMINISTRATIVE REGULATIONS, RULINGS, INSTRUCTIONS AND ORDERS--PRESUMPTION OF CORRECTNESS.--

          A. The secretary is empowered and directed to issue and file as required by law all regulations, rulings, instructions or orders necessary to implement and enforce any provision of any law the administration and enforcement of which the department, the secretary, any division of the department or any director of any division of the department is charged, including all rules and regulations necessary by reason of any alteration of any such law. In order to accomplish its purpose, this provision is to be liberally construed.

          B. Directives issued by the secretary shall be in form substantially as follows:

                (1) regulations shall be written statements of the secretary of general application, interpreting and exemplifying the [statues] statutes to which they relate;

                (2) rulings shall be written statements of the secretary, of limited application to one or a small number of persons, interpreting the statutes to which they relate, ordinarily issued in response to a request for clarification of the consequences of a specified set of circumstances;

                (3) orders shall be written statements of the secretary or [a hearing officer or] other delegate of the secretary to implement a decision after a hearing; and

                (4) instructions shall be other written statements or directives of the secretary or secretary's delegate not dealing with the merits of any law but otherwise in aid of the accomplishment of the duties of the secretary.

          C. To be effective, any ruling or regulation issued by the secretary shall be reviewed by the attorney general or other legal counsel of the department prior to being filed as required by law, and the fact of the review shall be indicated on the ruling or regulation.

          D. To be effective, a regulation shall first be issued as a proposed regulation and filed for public inspection in the office of the secretary. Unless otherwise provided by statute, no regulation affecting any person or agency outside the department shall be adopted, amended or repealed without a public hearing on the proposed action before the secretary or a hearing officer designated by the secretary. The public hearing shall be held in Santa Fe unless otherwise permitted by statute. Notice of the subject matter of the regulation, the action proposed to be taken, the time and place of the hearing, the manner in which interested parties may present their views and the method by which copies of the proposed regulation, proposed amendment or repeal of an existing regulation may be obtained shall be published at least thirty days prior to the hearing date in [a] the New Mexico register and mailed at least thirty days prior to the hearing date to all persons who have made a written request for advance notice of hearing. After the proposed regulation has been on file for not less than sixty days and a public hearing on the proposed action has been held by the secretary or a hearing officer designated by the secretary, the secretary may issue it as a final regulation by signing the regulation and filing the regulation in the manner required by law. The secretary shall not delegate the authority to sign regulations.

          E. In addition to filing copies of regulations with the state records center and archives as required by law, the secretary shall maintain in the office of the secretary a duplicate official set of current and superseded regulations, a set of current and superseded rulings and such additional sets of those regulations and rulings as appear necessary, which duplicate or additional sets shall be available for inspection by the public, but superseded regulations need be maintained for no longer than ten years from the date of supersession.

          F. The secretary shall develop and maintain a file of names and addresses of individuals and professional and industry groups having an interest in the promulgation of new, revised or proposed regulations. At convenient times, the secretary shall distribute to these persons all such regulations and all pertinent rulings, making such charges as will defray the expense incurred in their physical preparation and mailing. Such charges are appropriated to the department to defray the costs of preparing and distributing regulations and rulings.

          G. Any regulation, ruling, instruction or order issued by the secretary or [order or instruction issued by a hearing officer or other] delegate of the secretary is presumed to be a proper implementation of the provisions of the laws that are charged to the department, the secretary, any division of the department or any director of any division of the department.

          H. The extent to which regulations, rulings and orders will have retroactive effect shall be stated and, if no such statement is made, they will be applied prospectively only.

          I. An interested person may petition the secretary to request the promulgation, amendment or repeal of a rule and may accompany the petition with data, views and arguments in support of the petition. Within thirty days after the submission of the petition, the secretary shall deny the petition in writing, stating the reasons for the denial, or initiate rulemaking proceedings.

          J. An interested person who is adversely affected by a rule promulgated by the secretary or, pursuant to Subsection I of this section, by an action of the secretary to promulgate, amend or repeal a rule or deny a petition requesting the secretary to promulgate, amend or repeal a rule, may appeal to the court of appeals for relief. An appeal shall be on the record made at a hearing before the secretary and shall be taken to the court of appeals within thirty days after the date of the secretary's action.

          K. On appeal of a rule, or of an action made by the secretary pursuant to Subsection I of this section, the court shall set aside the rule or the secretary's action only if it is found to be:

                (1) arbitrary, capricious or an abuse of discretion;

                (2) not supported by substantial evidence in the record; or

                (3) otherwise not in accordance with law.

          L. After a hearing and a showing of good cause by the appellant, a stay of the rule, or the secretary's action made pursuant to Subsection I of this section, being appealed may be granted, pending the outcome of the judicial review. The stay of the rule or the secretary's action may be granted by the secretary on application for a stay or, if the secretary denies a stay within ninety days after receipt of the application, by the court of appeals."

     SECTION 21. Section 66-2-11 NMSA 1978 (being Laws 1978, Chapter 35, Section 15, as amended) is amended to read:

     "66-2-11. GIVING OF NOTICE.--Whenever the department or the administrative hearings office is authorized or required to give any notice under the Motor Vehicle Code or any other law regulating the operation of vehicles, unless a different method of giving notice is otherwise expressly prescribed, notice shall be given either by personal delivery to the person to be notified or by deposit in the United States mail of the notice in an envelope with postage prepaid, addressed to the person at [his] the person's address as shown by the records of the department. The giving of notice by mail is complete upon the expiration of seven days after deposit of the notice. Proof of the giving of notice in either manner may be made by the certificate of any officer or employee of the department or affidavit of any person over eighteen years of age, naming the person to whom the notice was given and specifying the time, place and manner of the giving of the notice. Notice is given when a person refuses to accept notice."

     SECTION 22. Section 66-2-17 NMSA 1978 (being Laws 1995, Chapter 129, Section 3) is amended to read:

     "66-2-17. ADMINISTRATIVE HEARING--PROCEDURE [APPEALS FROM SECRETARY'S DECISION AND ORDER--EXHAUSTION OF ADMINISTRATIVE REMEDIES].--

          A. Unless a more specific provision for review exists, any person may dispute the denial of, or failure to either allow or deny, any license, permit, placard or registration provided for under the Motor Vehicle Code by filing with the secretary a written protest against the action or inaction [taken] by the department. Every protest shall identify the person and the action or inaction that is in dispute, the grounds for the protest and the affirmative relief requested. The statement of grounds for protest shall specify individual grounds upon which the protest is based and a summary statement of the evidence expected to be produced supporting each ground asserted, if any; provided that the person may supplement the statement at any time prior to [any] a hearing conducted on the protest [under Subsection D of this section] pursuant to the provisions of the Administrative Hearings Office Act. The secretary may, in appropriate cases, provide for an informal conference before [setting] the administrative hearings office sets a hearing of the protest.

          B. Any protest by a person shall be filed within thirty days of the date of the mailing or verbal notification of the action proposed to be taken by the department. If a protest is not filed within the time required for filing a protest, the secretary may proceed with the action [or inaction] proposed by the department.

          [C. Upon timely receipt of a protest, the department or hearing officer shall promptly set a date for hearing and on that date hear the protest.

          D. A hearing officer shall be designated by the secretary to conduct the hearing. A person may appear at a hearing for himself or be represented by a bona fide employee or an attorney. Hearings shall not be open to the public except upon request of the person and may be postponed or continued at the discretion of the hearing officer.

          E. In hearings before the hearing officer, the technical rules of evidence shall not apply, but in ruling on the admissibility of evidence, the hearing officer may require reasonable substantiation of statements or records tendered, the accuracy or truth of which is in reasonable doubt.

          F. In hearings before the hearing officer, the Rules of Civil Procedure for the District Courts shall not apply, but the hearing shall be conducted so that both complaints and defenses are amply and fairly presented. To this end, the hearing officer shall hear arguments, permit discovery, entertain and dispose of motions, require written expositions of the case as the circumstances justify and render a decision in accordance with the law and the evidence presented and admitted.

          G. In the case of the hearing of any protest, the hearing officer shall make and preserve a complete record of the proceedings. At the beginning of the hearing, the hearing officer shall inform the person of the person's right to representation. The hearing officer, within thirty days of the hearing, shall inform the protestant in writing of the decision, informing the protestant at the same time of the right to, and the requirements for perfection of, an appeal from the decision to the district court and of the consequences of a failure to appeal. The written decision shall embody an order granting or denying the relief requested or granting such part thereof as seems appropriate.

          H. If the protestant or secretary is dissatisfied with the decision and order of the hearing officer, the party may appeal pursuant to the provisions of the Administrative Procedures Act.

          I. No court of this state has jurisdiction to entertain any proceeding by any person in which the person calls into question the application to that person of any provision of the Motor Vehicle Code, except as a consequence of the appeal by that person to the district court from the action and order of the secretary or hearing officer as provided for in this section.

          J. Nothing in this section shall be construed to authorize any criminal proceedings hereunder or to authorize an administrative protest of the issuance of a subpoena or summons.]"

     SECTION 23. Section 66-4-3 NMSA 1978 (being Laws 1978, Chapter 35, Section 216, as amended) is amended to read:

     "66-4-3. REFUSAL TO ISSUE LICENSE--CANCELLATION OR SUSPENSION OF LICENSE OR USE OF TEMPORARY PERMITS--HEARING--APPEAL.--

          A. The department may refuse to issue a license for just cause and may cancel or suspend a license or use of a temporary registration permit, demonstration permit or transport permit for violation of the Motor Vehicle Code. The [department shall take the] action authorized in this section shall be taken only after a hearing [Notice of hearing shall be given the party concerned as provided in Section 66-2-11 NMSA 1978. The notice shall state the proposed action of the department and the reason for the proposed action.

          B. The department shall prepare rules for the conduct of the hearing. At the hearing, the technical rules of evidence do not apply, and a party has the right to be represented by counsel, to call witnesses in the party's own behalf and to cross-examine the witnesses of other parties.

          C. The secretary or the secretary's designated agent shall conduct the hearing for the department and shall cause a record of hearing to be made.

          D.] before the administrative hearings office. Within ten days after completion of the hearing, the [secretary] hearing officer designated to conduct the hearing shall cause to be served upon all parties, in the manner provided in Section 66-2-11 NMSA 1978, the [secretary's] hearing officer's findings and decision. The decision shall be:

                (1) granting a license or refusing to grant a license;

                (2) continuing a license, canceling a license or suspending a license for a time stated; or

                (3) continuing use of dealer plates and temporary registration permits, demonstration permits or transport permits, canceling dealer plates and temporary registration permits, demonstration permits or transport permits or suspending use of temporary registration permits, demonstration permits or transport permits for a time stated.

          [E.] B. A party aggrieved by the [secretary's] hearing officer's decision may file an appeal in the district court pursuant to the provisions of Section 39-3-1.1 NMSA 1978."

     SECTION 24. Section 66-5-19 NMSA 1978 (being Laws 1978, Chapter 35, Section 241, as amended) is amended to read:

     "66-5-19. RESTRICTED LICENSES.--

          A. The division, upon issuing a driver's license or a provisional license, [has authority] may, whenever good cause appears, [to] impose restrictions, including the shortening of the licensure period suitable to the licensee's driving ability with respect to the type of or special mechanical control devices required on a motor vehicle that the licensee may operate or such other restrictions applicable to the licensee as the division determines to be appropriate to ensure the safe operation of a motor vehicle by the licensee.

          B. At age seventy-five and thereafter, the applicant shall renew the applicant's license on a yearly basis at no cost to the applicant.

          C. The division may either issue a special restricted license or may set forth such restrictions upon the usual license form.

          D. The division may issue a restricted license or a restricted provisional license for driving during daylight hours only to some visually impaired persons who fail the usual eyesight test. The health standards advisory board created pursuant to the provisions of Section 66-5-6 NMSA 1978 shall evaluate the extent of the visual impairment and [its] the impairment's effect on the driving ability of the applicant and, based on [its] the board's recommendations, the director may issue a restricted license under the following conditions:

                (1) the applicant has no record of moving violations;

                (2) the necessity of the license is shown to the satisfaction of the director; and

                (3) the applicant satisfies the provisions of Section 66-5-206 NMSA 1978 relating to proof of financial responsibility.

          E. The division may, upon receiving satisfactory evidence of any violation of the restrictions of the license, suspend the license, but the licensee is entitled to a hearing as upon a suspension under Sections [66-5-1] 66-5-1.1 through 66-5-47 NMSA 1978 and as provided in the Administrative Hearings Office Act.

          F. It is a misdemeanor for any person to operate a motor vehicle in any manner in violation of the restrictions imposed in a restricted license issued to the person."

     SECTION 25. Section 66-5-30 NMSA 1978 (being Laws 1978, Chapter 35, Section 252, as amended) is amended to read:

     "66-5-30. AUTHORITY OF DIVISION TO SUSPEND OR REVOKE LICENSE.--

          A. The division [is authorized to] may suspend the instruction permit, driver's license or provisional license of a driver without preliminary hearing upon a showing by its records or other sufficient evidence, including information provided to the state pursuant to an intergovernmental agreement authorized by Section 66-5-27.1 NMSA 1978, that the licensee:

                (1) has been convicted of an offense for which mandatory revocation of license is required upon conviction;

                (2) has been convicted as a driver in an accident resulting in the death or personal injury of another or serious property damage;

                (3) has been convicted with such frequency of offenses against traffic laws or rules governing motor vehicles as to indicate a disrespect for traffic laws and a disregard for the safety of other persons on the highways;

                (4) is an habitually reckless or negligent driver of a motor vehicle;

                (5) is incompetent to drive a motor vehicle;

                (6) has permitted an unlawful or fraudulent use of the license;

                (7) has been convicted of an offense in another state or tribal jurisdiction that if committed within this state's jurisdiction would be grounds for suspension or revocation of the license;

                (8) has violated provisions stipulated by a district court in limitation of certain driving privileges;

                (9) has failed to fulfill a signed promise to appear or notice to appear in court as evidenced by notice from a state court or tribal court, whenever appearance is required by law or by the court as a consequence of a charge or conviction under the Motor Vehicle Code or pursuant to the laws of the tribe;

                (10) has failed to pay a penalty assessment within thirty days of the date of issuance by the state or a tribe; or

                (11) has accumulated seven points, but less than eleven points, and when the division has received a recommendation from a municipal or magistrate judge that the license be suspended for a period not to exceed three months.

          B. Upon suspending the license of a person as authorized in this section, the division shall immediately notify the licensee in writing [and upon his request shall afford him an opportunity for a hearing] of the licensee's right to a hearing before the administrative hearings office and shall notify the office. The office shall schedule the hearing to take place as early as practicable, but within [not to exceed] no more than twenty days, not counting Saturdays, Sundays and legal holidays after receipt of the request. The hearing shall be held in the county [wherein] in which the licensee resides unless the [division] hearing officer and the licensee agree that the hearing may be held in some other county; provided that the hearing request is received within twenty days from the date that the suspension was deposited in the United States mail. The [director may, in his discretion, extend the twenty-day period. Upon the hearing, the director or his duly authorized agent may administer oaths and may issue subpoenas for the attendance of witnesses and the production of relevant books and papers and may require a reexamination of the licensee. Upon] hearing shall be held as provided in the Administrative Hearings Office Act. After the hearing, the [division] hearing officer shall either rescind [its] the order of suspension or [good cause appearing therefor, may] continue, modify or extend the suspension of the license or revoke the license."

     SECTION 26. Section 66-5-204 NMSA 1978 (being Laws 1983, Chapter 318, Section 5, as amended) is amended to read:

     "66-5-204. ADMINISTRATIVE AND COURT REVIEW.--An owner of a motor vehicle registered in New Mexico who is aggrieved by the decision of the secretary made under the provisions of the Mandatory Financial Responsibility Act may appeal to the [hearing officer of the department] administrative hearings office for a hearing to be held within twenty days [of] after the receipt by the [department] administrative hearings office of the appeal. A person who continues aggrieved after the decision made by the hearing officer may appeal that decision in the district court pursuant to the provisions of Section

39-3-1.1 NMSA 1978."

     SECTION 27. Section 66-5-236 NMSA 1978 (being Laws 1983, Chapter 318, Section 35, as amended) is amended to read:

     "66-5-236. SUSPENSION FOR NONPAYMENT OF JUDGMENT OR FOR FALSE AFFIRMATION.--

          A. Except as otherwise provided, the secretary shall suspend:

                (1) the motor vehicle registration for all motor vehicles and the driver's license of any person against whom a judgment has been rendered, the department being in receipt of a certified copy of the judgment on a form provided by the department; or

                (2) the registration for a period not to exceed one year of a person who is operating a motor vehicle in violation of Section 66-5-205 NMSA 1978 or falsely affirms the existence of a motor vehicle insurance policy or some other means of satisfying the financial responsibility requirements of the Mandatory Financial Responsibility Act, but only if evidence of financial responsibility is not submitted within twenty days after the date of the mailing of the department's demand [therefor] for that evidence. The department shall notify the person that [he] the person may request a hearing before the administrative hearings office within twenty days after the date of the mailing of the department's demand [as provided under this subsection].

          B. The registration shall remain suspended and shall not be renewed, nor shall any registration be issued thereafter in the name of that person, unless and until every judgment is stayed, satisfied in full or to the extent provided in the Mandatory Financial Responsibility Act and evidence of financial responsibility as required in Section 66-5-218 NMSA 1978 is provided to the department."

     SECTION 28. Section 66-8-111.1 NMSA 1978 (being Laws 1984, Chapter 72, Section 7, as amended by Laws 2003, Chapter 51, Section 14 and by Laws 2003, Chapter 90, Section 7) is amended to read:

     "66-8-111.1. LAW ENFORCEMENT OFFICER AGENT FOR DEPARTMENT--WRITTEN NOTICE OF REVOCATION AND RIGHT TO HEARING.--On behalf of the department, a law enforcement officer requesting a chemical test or directing the administration of a chemical test pursuant to Section 66-8-107 NMSA 1978 shall serve immediate written notice of revocation and of right to a hearing before the administrative hearings office pursuant to the Implied Consent Act on a person who refuses to permit chemical testing or on a person who submits to a chemical test the results of which indicate an alcohol concentration in the person's blood or breath of eight one hundredths or more if the person is twenty-one years of age or older, four one hundredths or more if the person is driving a commercial motor vehicle or two one hundredths or more if the person is less than twenty-one years of age. Upon serving notice of revocation, the law enforcement officer shall take the license or permit of the driver, if any, and issue a temporary license valid for twenty days or, if the driver requests a hearing pursuant to Section 66-8-112 NMSA 1978, valid until the date the [department] administrative hearings office issues the order following that hearing; provided that a temporary license shall not be issued to a driver without a valid license or permit. The law enforcement officer shall send the person's driver's license to the department along with the signed statement required pursuant to Section 66-8-111 NMSA 1978."

     SECTION 29. Section 66-8-112 NMSA 1978 (being Laws 1978, Chapter 35, Section 520, as amended by Laws 2003, Chapter 51, Section 15 and by Laws 2003, Chapter 90, Section 8) is amended to read:

     "66-8-112. REVOCATION OF LICENSE OR PRIVILEGE TO DRIVE--NOTICE--EFFECTIVE DATE--HEARING--HEARING COSTS--REVIEW.--

          A. The effective date of revocation pursuant to Section 66-8-111 NMSA 1978 is twenty days after notice of revocation or, if the person whose driver's license or privilege to drive is being revoked or denied requests a hearing pursuant to [this section] the Administrative Hearings Office Act, the date that the [department] administrative hearings office issues the order following that hearing. The date of notice of revocation is:

                (1) the date the law enforcement officer serves written notice of revocation and of right to a hearing pursuant to Section 66-8-111.1 NMSA 1978; or

                (2) in the event the results of a chemical test cannot be obtained immediately, the date notice of revocation is served by mail by the department. This notice of revocation and of right to a hearing shall be sent by certified mail and shall be deemed to have been served on the date borne by the return receipt showing delivery, refusal of the addressee to accept delivery or attempted delivery of the notice at the address obtained by the arresting law enforcement officer or on file with the department.

          B. Within ten days after receipt of notice of revocation pursuant to Subsection A of this section, a person whose license or privilege to drive is revoked or denied or the person's agent may request a hearing. The hearing request shall be made in writing and shall be accompanied by a payment of twenty-five dollars ($25.00) or a sworn statement of indigency on a form provided by the [department] administrative hearings office. A standard for indigency shall be established pursuant to [regulations] rules adopted by the department. Failure to request a hearing within ten days shall result in forfeiture of the person's right to a hearing. Any person less than eighteen years of age who fails to request a hearing within ten days shall have notice of revocation sent to [his] the person's parent, guardian or custodian by the department. A date for the hearing shall be set by the [department] administrative hearings office, if practical, within thirty days after receipt of notice of revocation. The hearing shall be held in the county in which the offense for which the person was arrested took place.

          C. The [department] administrative hearings office may postpone or continue any hearing on its own motion or upon application from the person and for good cause shown for a period not to exceed ninety days from the date of notice of revocation and, [provided that] if the office so orders, the department [extends] shall extend the validity of the temporary license for the period of the postponement or continuation.

          D. At the hearing, the [department or its agent] administrative hearings office may administer oaths and may issue subpoenas for the attendance of witnesses and the production of relevant books and papers.

          E. The hearing shall be limited to the following issues:

                (1) whether the law enforcement officer had reasonable grounds to believe that the person had been driving a motor vehicle within this state while under the influence of intoxicating liquor or drugs;

                (2) whether the person was arrested;

                (3) whether this hearing is held no later than ninety days after notice of revocation; and either

                (4) whether:

                     (a) the person refused to submit to a test upon request of the law enforcement officer; and

                     (b) the law enforcement officer advised that the failure to submit to a test could result in revocation of the person's privilege to drive; or

                (5) whether:

                     (a) the chemical test was administered pursuant to the provisions of the Implied Consent Act; and

                     (b) the test results indicated an alcohol concentration in the person's blood or breath of eight one hundredths or more if the person is twenty-one years of age or older, four one hundredths or more if the person is driving a commercial motor vehicle or two one hundredths or more if the person is less than twenty-one years of age.

          F. The [department] administrative hearings office shall enter an order sustaining the revocation or denial of the person's license or privilege to drive if the [department] hearing officer from the office finds that:

                (1) the law enforcement officer had reasonable grounds to believe the driver was driving a motor vehicle while under the influence of intoxicating liquor or drugs;

                (2) the person was arrested;

                (3) this hearing is held no later than ninety days after notice of revocation; and

                (4) either:

                     (a) the person refused to submit to the test upon request of the law enforcement officer after the law enforcement officer advised [him] the person that [his] the person's failure to submit to the test could result in the revocation of [his] the person's privilege to drive; or

                     (b) that a chemical test was administered pursuant to the provisions of the Implied Consent Act and the test results indicated an alcohol concentration in the person's blood or breath of eight one hundredths or more if the person is twenty-one years of age or older, four one hundredths or more if the person is driving a commercial motor vehicle or two one hundredths or more if the person is less than twenty-one years of age.

          G. If one or more of the elements set forth in Paragraphs (1) through (4) of Subsection F of this section are not found by the [department] hearing officer, the person's license shall not be revoked.

          H. A person adversely affected by an order of the [department] administrative hearings office may seek review within thirty days in the district court in the county in which the offense for which the person was arrested took place. The district court, upon thirty days' written notice to the department, shall hear the case. On review, it is for the court to determine only whether reasonable grounds exist for revocation or denial of the person's license or privilege to drive based on the record of the administrative proceeding.

          I. Any person less than eighteen years of age shall have results of [his] the person's hearing forwarded by the [department] administrative hearings office to [his] the person's parent, guardian or custodian."

     SECTION 30. TEMPORARY PROVISION--TRANSFER OF PERSONNEL, FUNCTIONS, APPROPRIATIONS, MONEY, PROPERTY, CONTRACTUAL OBLIGATIONS, STATUTORY REFERENCES AND RULES.--

          A. On the effective date of this act, all personnel, functions, appropriations, money, records, furniture, equipment and other property of, or attributable to, the hearings bureau of the office of the secretary of taxation and revenue shall be transferred to the administrative hearings office.

          B. On the effective date of this act, all contractual obligations of the hearings bureau of the office of the secretary of taxation and revenue shall be binding on the administrative hearings office.

          C. On the effective date of this act, all references in statute to the hearings bureau of the office of the secretary of taxation and revenue or hearing officers of the taxation and revenue department in Chapters 7 and 66 NMSA 1978 shall be deemed to be references to the administrative hearings office or a hearing officer of the office.

          D. Rules of the taxation and revenue department pertaining to hearing officers and the conduct of hearings pursuant to actions related to Chapter 7 or 66 NMSA 1978 shall be deemed to be the rules of the administrative hearings office until amended or repealed by the office.

     SECTION 31. REPEAL.--Section 7-1-24.1 NMSA 1978 (being Laws 2013, Chapter 27, Section 7) is repealed.

     SECTION 32. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2015.

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