SENATE BILL 459
53rd legislature - STATE OF NEW MEXICO - first session, 2017
INTRODUCED BY
Michael Padilla
AN ACT
RELATING TO PROPERTY TAX; CREATING A SPECIAL METHOD OF VALUATION FOR LAND WITH A RESTRICTIVE COVENANT THAT REQUIRES THE LAND TO BE USED PRIMARILY AS OPEN SPACE LAND.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 7-36-15 NMSA 1978 (being Laws 1975, Chapter 165, Section 2, as amended) is amended to read:
"7-36-15. METHODS OF VALUATION FOR PROPERTY TAXATION PURPOSES--GENERAL PROVISIONS.--
A. Property subject to valuation for property taxation purposes under this article of the Property Tax Code shall be valued by the methods required by this article of the Property Tax Code whether the determination of value is made by the department or the county assessor. The same or similar methods of valuation shall be used for valuation of the same or similar kinds of property for property taxation purposes.
B. Unless a method or methods of valuation are authorized in Sections 7-36-20 through 7-36-33 NMSA 1978 and Section 2 of this 2017 act, the value of property for property taxation purposes shall be its market value as determined by application of the sales of comparable property, income or cost methods of valuation or any combination of these methods. In using any of the methods of valuation authorized by this subsection, the valuation authority:
(1) shall apply generally accepted appraisal techniques; and
(2) in determining the market value of residential housing, shall consider any decrease in the value that would be realized by the owner in a sale of the property because of the effects of any affordable housing subsidy, covenant or encumbrance imposed pursuant to a federal, state or local affordable housing program that restricts the future use of the property or the resale price of the property or would otherwise prohibit the owner from fully [benefitting] benefiting from any enhanced value of the property. As used in this paragraph:
(a) "subsidy, covenant or encumbrance imposed pursuant to a federal, state or local affordable housing program" includes those imposed by a nonprofit entity approved by a governmental entity as a qualifying grantee pursuant to the Affordable Housing Act; and
(b) "residential housing" means any building, structure or portion thereof that is primarily occupied, or designed or intended primarily for occupancy, as a residence by one or more households and any real property that is offered for sale or lease for the construction or location thereon of such a building, structure or portion thereof. "Residential housing" includes congregate housing, manufactured homes, housing intended to provide or providing transitional or temporary housing for homeless persons and common health care, kitchen, dining, recreational and other facilities primarily for use by residents of a residential housing project.
C. Dams, reservoirs, tanks, canals, irrigation wells, installed irrigation pumps, stock-watering wells and pumps, similar structures and equipment used for irrigation or stock-watering purposes, water rights and private roads shall not be valued separately from the land they serve. The foregoing improvements and rights shall be considered as appurtenances to the land they serve, and their value shall be included in the determination of value of the land.
D. The department shall adopt regulations to implement the methods of valuation authorized in this article of the Property Tax Code."
SECTION 2. A new section of the Property Tax Code is enacted to read:
"[NEW MATERIAL] SPECIAL METHOD OF VALUATION--LAND USED PRIMARILY AS OPEN SPACE LAND.--
A. The value of land with a restrictive covenant that requires the land to be used primarily as open space land shall be determined on the basis of the land's use. The method of value shall be its market value as determined by application of the sales of comparable property if the land were permanently restricted to the current use of open space land. The value may be determined based on such considerations as sales of land subject to permanent conservation restrictions, sales of land subject to enforceable deed restrictions, before and after appraisals of permanently restricted land in the area and other relevant factors. The value shall not reflect development or market value purposes other than open space use.
B. If a county assessor is unable to determine the value of open space land under the method of valuation described in Subsection A of this section, the assessor may value that land by applying up to a twenty percent reduction off the current and correct value of the land.
C. The department shall provide county assessors with a list of urban areas. The department shall adopt rules for determining whether land is used primarily as open space land and for determining the value of land used primarily as open space land. The rules shall specify procedures to use in determining the value of open space land. The rules shall provide that the:
(1) use of land that is developed, improved or has physical structures, whether permanent or temporary, shall not be considered as land used primarily as open space land; and
(2) value of land used primarily as open space land shall not be less than the value of land used primary for agricultural purposes.
D. The owner of the land shall make application to the county assessor in a tax year in which the valuation method of this section is first claimed to be applicable to the land, or in a tax year immediately subsequent to a tax year in which the land was not valued under this section or in which a change in ownership occurs. 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 neither a change in the use of the land nor a change in ownership.
E. The owner of land valued under this section shall report to the county assessor whenever the use of the land changes so that it is no longer being used primarily as open space land. 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.
F. Any person who is required to make a report under the provisions of Subsection E of this section and who fails to do so is personally liable for a civil penalty in an amount equal to the greater of one thousand dollars ($1,000) 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.
G. As used in this section:
(1) "open space land" means real property with a lot size of one acre or more that:
(a) is located in an urban area;
(b) is undeveloped and permeable;
(c) on and after January 1, 2017, has access to an acequia or an operational well that can irrigate the land;
(d) enhances the value of nearby neighborhoods, public parks, wildlife refuges, nature reservations or sanctuaries or other open space land; and
(e) has a current use that will: 1) preserve and retain the natural state of the land; 2) conserve and enhance natural or scenic resources; or 3) protect water supply or otherwise allow for the permeation of water into the ground; and
(2) "urban area" means an area with a population density of at least one thousand seven hundred fifty people per square mile according to the most recent federal decennial census."
SECTION 3. APPLICABILITY.--The provisions of this act apply to the 2018 and subsequent property tax years.
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