SENATE CORPORATIONS AND TRANSPORTATION COMMITTEE SUBSTITUTE FOR
SENATE BILL 350
53rd legislature - STATE OF NEW MEXICO - first session, 2017
AN ACT
RELATING TO PROPERTY TAX; CREATING A SPECIAL METHOD OF VALUATION FOR LAND PREVIOUSLY USED FOR AGRICULTURAL PURPOSES; PROVIDING FOR A RECAPTURE OF TAX SAVINGS IF THE LAND IS SUBSEQUENTLY SUBDIVIDED OR IS DEVELOPED FOR PURPOSES OTHER THAN FOR AGRICULTURAL USE; PROVIDING A PENALTY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. A new section of the Property Tax Code, Section 7-36-20.1 NMSA 1978, is enacted to read:
"7-36-20.1. [NEW MATERIAL] SPECIAL METHOD OF VALUATION--LAND PREVIOUSLY USED FOR AGRICULTURAL PURPOSES--RECAPTURE--PENALTY.--
A. The value of land that, in the previous year, had been valued pursuant to Section 7-36-20 NMSA 1978 but is no longer eligible to be valued pursuant to that section shall be determined on the basis of the land's capacity to produce agricultural products multiplied by a factor of two; provided that the value shall not exceed fifty percent of the market value of the property.
B. Eligibility for the special valuation provided by this section requires that:
(1) the property shall be maintained in compliance with all local, state and federal environmental protection rules and regulations;
(2) the property is maintained in compliance with rules of the state and its political subdivisions regarding maintenance of property, including controlling noxious weeds, keeping community ditches or acequias in working condition and keeping the land free of nuisances; and
(3) to prevent blowing dust, a cover crop is planted and maintained to provide soil cover on the property if the soil would otherwise be bare.
C. If the land had been valued in the previous year pursuant to Subsection A of this section as grazing land, the land shall be deemed to carry the minimum livestock pursuant to rules established by the department for purposes of Subsection D of Section 7-36-20 NMSA 1978 and the owner of the land shall pay a tax equivalent to the value of the livestock pursuant to Section 7-36-21 NMSA 1978.
D. All improvements existing at the time of making an application pursuant to Subsection E of this section, other than those specified in Section 7-36-15 NMSA 1978, on land used primarily for agricultural purposes shall be valued separately for property taxation purposes, and the value of these improvements shall be added to the value of the land determined under this section. Any improvements made while the land is valued pursuant to this section, other than for agricultural purposes, shall be considered to be a change of use of the land and the owner of the land shall report the change as required by Subsection G of this section.
E. The owner of the land shall make application to the county assessor in a tax year that is no more than three years subsequent to the tax year in which the land was valued pursuant to Section 7-36-20 NMSA 1978, or immediately following the tax year in which the land had been valued pursuant to this section under prior ownership. Application shall be made under oath, shall be in a form and contain the information required by department rules and shall be made no later than thirty days after the date of mailing by the assessor of the notice of valuation. Once land is valued under this section, application need not be made in subsequent tax years as long as there is no change in the ownership or use of the land.
F. If the owner of the land that is valued pursuant to this section subdivides the land or develops the land for purposes other than for agricultural use, the owner of record at the time the change of use occurs shall be liable for the difference between the taxes assessed against the land and the taxes that would otherwise have been assessed against the land for each of the number of years the land was valued pursuant to this section, up to a maximum of five years, to be collected and distributed in the same manner as other ad valorem levies.
G. The owner of land valued under this section shall report to the county assessor whenever the use of the land changes so that it no longer meets the requirements of this section. This report shall be made on a form prescribed by department rules and shall be made by the last day of February of the tax year immediately following the year in which the change in the use of the land occurs.
H. Any person who is required to make a report under the provisions of Subsection G of this section and who fails to do so is personally liable for a civil penalty in an amount equal to the greater of twenty-five dollars ($25.00) or twenty-five percent of the difference between the property taxes ultimately determined to be due and the property taxes originally paid for the tax years for which the person failed to make the required report.
I. For the purpose of this section:
(1) "agricultural products" means plants, crops, trees, forest products, orchard crops, livestock, poultry, captive deer or elk, or fish; and
(2) "agricultural use" means the:
(a) use of land for the production of agricultural products;
(b) use of land that meets the requirements for payment or other compensation pursuant to a soil conservation program under an agreement with an agency of the federal government;
(c) resting of land to maintain its capacity to produce agricultural products; or
(d) resting of land as the direct result of at least moderate drought conditions as designated by the United States department of agriculture, if the drought conditions occurred in the county within which the land is located for at least eight consecutive weeks during the previous tax year; provided that the land was used in the tax year immediately preceding the previous tax year primarily for a purpose identified pursuant to this paragraph."
SECTION 2. APPLICABILITY.--The provisions of this act apply to the 2019 and subsequent property tax years.
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