HOUSE BILL 294

57th legislature - STATE OF NEW MEXICO - first session, 2025

INTRODUCED BY

Kathleen Cates

AN ACT

RELATING TO PROPERTY TAXATION; PROVIDING THAT CERTAIN LAND WITH A CONSERVATION EASEMENT SHALL BE VALUED AS AGRICULTURAL LAND FOR THE PURPOSES OF PROPERTY TAXATION.

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

     SECTION 1. Section 7-36-20 NMSA 1978 (being Laws 1973, Chapter 258, Section 21, as amended) is amended to read:

     "7-36-20. SPECIAL METHOD OF VALUATION--LAND USED PRIMARILY FOR AGRICULTURAL PURPOSES--CONSERVATION EASEMENTS.--

          A. The value of land used primarily for agricultural purposes shall be determined on the basis of the land's capacity to produce agricultural products. Evidence of bona fide primary agricultural use of land for the tax year preceding the year for which determination is made of eligibility for the land to be valued under this section creates a presumption that the land is used primarily for agricultural purposes during the tax year in which the determination is made. If the land was valued under this section in one or more of the three tax years preceding the year in which the determination is made and the use of the land has not changed since the most recent valuation under this section, a presumption is created that the land continues to be entitled to that valuation.

          B. 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 or pursuant to a land conservation easement, over a landowner's land that contains important habitat area or significant natural, open space or historic resources, entered into between a landowner and an agency of the state or federal government or between a landowner and a land trust accredited by the land trust accreditation commission, or if that commission no longer exists, a national land trust accreditation organization that is recommended by the energy, minerals and natural resources department;

                     (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.

          C. The department shall adopt rules for determining whether land is used primarily for agricultural purposes. The rules shall provide that the use of land for the lawful taking of game shall not be considered in determining whether land is used primarily for agricultural purposes.

          D. The department shall adopt rules for determining the value of land used primarily for agricultural purposes. The rules shall:

                (1) specify procedures to use in determining the capacity of land to produce agricultural products and the derivation of value of the land based upon its production capacity;

                (2) establish carrying capacity as the measurement of the production capacity of land used for grazing purposes, develop a system of determining carrying capacity through the use of an animal unit concept and establish carrying capacities for the land in the state classified as grazing land;

                (3) provide that land the bona fide and primary use of which is the production of captive deer or elk shall be valued as grazing land and that captive deer shall be valued and taxed as sheep and captive elk shall be valued and taxed as cattle;

                (4) provide for the consideration of determinations of any other governmental agency concerning the capacity of the same or similar lands to produce agricultural products;

                (5) assure that land determined under the rules to have the same or similar production capacity shall be valued uniformly throughout the state; and

                (6) provide for the periodic review by the department of determined production capacities and capitalization rates used for determining annually the value of land used primarily for agricultural purposes.

          E. All improvements, 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.

          F. 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. 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 use of the land.

          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 is no longer being used primarily for agricultural purposes. 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."

     SECTION 2. Section 7-38-12.1 NMSA 1978 (being Laws 2003, Chapter 118, Section 2, as amended) is amended to read:

     "7-38-12.1. RESIDENTIAL PROPERTY TRANSFERS--CONSERVATION EASEMENT DEEDS--AFFIDAVIT TO BE FILED WITH ASSESSOR.--

          A. [After January 1, 2004] A transferor or the transferor's authorized agent or a transferee or the transferee's authorized agent presenting for recording with a county clerk a conservation easement deed or a deed, real estate contract or memorandum of real estate contract transferring an interest in real property classified as residential property for property taxation purposes shall also file with the county assessor within thirty days of the date of filing with the county clerk an affidavit signed and completed in accordance with the provisions of Subsection B of this section.

          B. The affidavit required for submission shall be in a form approved by the department and signed by the transferors or their authorized agents or the transferees or their authorized agents of any interest in residential real property transferred by deed or real estate contract. The affidavit shall contain only the following information to be used only for analytical and statistical purposes in the application of appraisal methods:

                (1) the complete names of all transferors and transferees;

                (2) the current mailing addresses of all transferors and transferees;

                (3) the legal description of the real property interest transferred as it appears in the document of transfer;

                (4) the full consideration, including money or any other thing of value, paid or exchanged for the transfer and the terms of the sale, including any amount of seller incentives; and

                (5) the value and a description of personal property that is included in the sale price.

          C. Upon receipt of the affidavit required by Subsection A of this section, the county assessor shall place the date of receipt on the original affidavit and on a copy of the affidavit. The county assessor shall retain the original affidavit as a confidential record and as proof of compliance and shall return the copy marked with the date of receipt to the person presenting the affidavit. The assessor shall index the affidavits in a manner that permits cross-referencing to other records in the assessor's office pertaining to the specific property described in the affidavit. The affidavit and its contents are not part of the valuation record of the assessor.

          D. The affidavit required by Subsection A of this section shall not be required for:

                (1) a deed transferring nonresidential property;

                (2) a deed that results from the payment in full or forfeiture by a transferee under a recorded real estate contract or recorded memorandum of real estate contract;

                (3) a lease of or easement on real property, regardless of the length of term, except for conservation easements;

                (4) a deed, patent or contract for sale or transfer of real property in which an agency or representative of the United States or New Mexico or any political subdivision of the state is the named grantor or grantee and authorized transferor or transferee;

                (5) a quitclaim deed to quiet title or clear boundary disputes;

                (6) a conveyance of real property executed pursuant to court order;

                (7) a deed to an unpatented mining claim;

                (8) an instrument solely to provide or release security for a debt or obligation;

                (9) an instrument that confirms or corrects a deed previously recorded;

                (10) an instrument between husband and wife or parent and child with only nominal actual consideration therefor;

                (11) an instrument arising out of a sale for delinquent taxes or assessments;

                (12) an instrument accomplishing a court-ordered partition;

                (13) an instrument arising out of a merger or incorporation;

                (14) an instrument by a subsidiary corporation to its parent corporation for no consideration, nominal consideration or in sole consideration of the cancellation or surrender of the subsidiary's stock;

                (15) an instrument from a person to a trustee or from a trustee to a trust beneficiary with only nominal actual consideration therefor;

                (16) an instrument to or from an intermediary for the purpose of creating a joint tenancy estate or some other form of ownership; or

                (17) an instrument delivered to establish a gift or a distribution from an estate of a decedent or trust.

          E. The affidavit required by Subsection A of this section shall not be construed to be a valuation record pursuant to Section 7-38-19 NMSA 1978.

          F. [Prior to November 1, 2003, the department shall print and distribute to each county assessor affidavit forms for distribution to the public upon request] As used in this section, "conservation easement" means a legal agreement entered into between a landowner and a land trust or state or federal agency to permanently limit the use of the landowner's land to conservation of the land in the land's natural and undeveloped state."

     SECTION 3. APPLICABILITY.--The provisions of this act apply to taxable years beginning on or after January 1, 2025.

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