44th legislature - STATE OF NEW MEXICO - second session, 2000

RELATING TO TAXATION; ESTABLISHING A METHOD OF LIMITING INCREASES IN THE VALUE OF RESIDENTIAL PROPERTY FOR PROPERTY TAXATION PURPOSES TO COMPLY WITH THE AMENDMENT OF ARTICLE 8, SECTION 1 OF THE CONSTITUTION OF NEW MEXICO THAT WAS ADOPTED BY THE VOTERS IN NOVEMBER 1998; AMENDING AND ENACTING SECTIONS OF THE NMSA 1978.

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

Section 1. Section 7-36-16 NMSA 1978 (being Laws 1973, Chapter 258, Section 18) is amended to read:

"7-36-16. RESPONSIBILITY OF COUNTY ASSESSORS TO DETERMINE AND MAINTAIN CURRENT AND CORRECT VALUES OF PROPERTY.--

A. County assessors shall determine values of property for property taxation purposes in accordance with the Property Tax Code and the regulations, orders, rulings and instructions of the department. They shall also implement a program of updating property values in accordance with the provisions of Section 7-36-21.2 NMSA 1978, so that current and correct values of property are maintained and shall have sole responsibility and authority at the county level for property valuation maintenance, subject only to the general supervisory powers of the director.

B. The director shall implement a program of regular evaluation of county assessors' valuation activities with particular emphasis on the maintenance of current and correct values.

C. Upon request of the county assessor, the director may contract with a board of county commissioners for the department to assume all or part of the responsibilities, functions and authority of a county assessor to establish or operate a property valuation maintenance program in the county. The contract shall be in writing and shall include provisions for the sharing of the program costs between the county and the department. The contract must include specific descriptions of the objectives to be reached and the tasks to be performed by the contracting parties. The initial term of any contract authorized under this subsection shall not extend beyond the end of the fiscal year following the fiscal year in which it is executed, but contracts may be renewed for additional one-year periods for succeeding years.

D. The department of finance and administration shall not approve the operating budget of any county in which there is not an adequate allocation of funds to the county assessor for the purpose of fulfilling his responsibilities for property valuation maintenance under this section. If the department of finance and administration questions the adequacy of any allocation of funds for this purpose, it shall consult with the department, the board of county commissioners and the county assessor in making its determination of adequacy.

E. To aid the board of county commissioners in determining whether a county assessor is operating an efficient program of property valuation maintenance and in determining the amount to be allocated to him for this function, the county assessor [must] shall present with his annual budget request a written report setting forth improvements of property added to valuation records during the year, additions of new property to valuation records during the year, increases and decreases of valuation during the year, the relationship of sales prices of property sold to values of the property for property taxation purposes and the current status of the overall property valuation maintenance program in the county. The county assessor shall send a copy of this report to the department."

Section 2. A new section of the Property Tax Code, Section 7-36-21.2 NMSA 1978, is enacted to read:

"7-36-21.2. [NEW MATERIAL] LIMITATION ON INCREASES IN VALUATION OF RESIDENTIAL PROPERTY FOR PROPERTY TAXATION PURPOSES--DETERMINATION OF ASSESSED VALUE FOR CERTAIN PURPOSES.--

A. Residential property shall be valued at its current and correct value in accordance with the provisions of the Property Tax Code, provided that the value of a residential property for property taxation purposes for the 2000 tax year shall be its baseline value. For the 2001 and subsequent tax years, the baseline value shall be the current and correct value of the property for property taxation purposes or one hundred three percent of the baseline value in the prior tax year, whichever is less.

B. For the 2001 and subsequent tax years, the value of a residential property for property taxation purposes for a tax year is the baseline value for that tax year, as determined pursuant to Subsection A of this section, plus the contributory market value of any physical improvements made to the property during the immediately preceding tax year and minus any decrease in value of the property from the immediately preceding tax year determined pursuant to Section 7-38-13 NMSA 1978.

C. The limitation on increases in baseline value does not apply to a residential property in any tax year in which the property ceases to be used as residential property in the year immediately prior to the tax year or in which a change of ownership occurred in the year immediately prior to the tax year. In that tax year, the value of the property shall be its current and correct value as determined pursuant to the provisions of the Property Tax Code.

D. The assessed value of a residential property is the greater of its value for property taxation purposes or its current and correct value. The assessed value of residential property shall be the value used for determining the limits on general obligation debt pursuant to Article 9, Sections 8, 11 and 13 of the constitution of New Mexico and for determining the classification of counties.

E. The county assessor shall maintain for each residential property its assessed value and its value for property taxation purposes. Each annual notice of valuation for a residential property shall include the property's assessed value, as well as its value for property taxation purposes and the net taxable value.

F. Nothing in this section shall require an annual increase in the property for property taxation purposes if there has not been an actual increase in the fair market value of the property.

G. As used in this section, "change of ownership" means a transfer to a transferee by a transferor of all or any part of the transferor's legal or equitable ownership interest in residential property except for a transfer:

(1) that is a testamentary disposition;

(2) to a trustee for the beneficial use of the transferor or the surviving spouse of a deceased transferor;

(3) to the spouse of the transferor that takes effect upon the death of the transferor;

(4) that creates, transfers or terminates, solely between spouses, any co-owner's interest;

(5) to a child of the transferor;

(6) that confirms or corrects a previous transfer made by a document that was recorded in the real estate records of the county in which the real property is located;

(7) for the purposes of quieting the title to real property or resolving a disputed location of a real property boundary;

(8) to a revocable trust by the transferor with the transferor, the transferor's spouse or a child of the transferor as beneficiary; or

(9) from a revocable trust described in Paragraph (8) of this subsection back to the settlor or trustor or to the beneficiaries of the trust."

Section 3. Section 7-38-20 NMSA 1978 (being Laws 1973, Chapter 258, Section 60, as amended) is amended to read:

"7-38-20. COUNTY ASSESSOR AND DEPARTMENT TO MAIL NOTICES OF VALUATION.--

A. By April 1 of each year, the county assessor shall mail a notice to each property owner informing him of the net taxable value of his property that has been valued for property taxation purposes by the assessor.

B. By May 1 of each year, the department shall mail a notice to each property owner informing him of the net taxable value of his property that has been valued for property taxation purposes by the department.

C. Failure to receive the notice required by this section does not invalidate the value set on the property, any property tax based on that value or any subsequent procedure or proceeding instituted for the collection of the tax.

D. The notice required by this section shall state:

(1) the property owner's name and address;

(2) the description or identification of the property valued;

(3) the classification of the property valued;

(4) the assessed value of the property, if the property is a residential property, as determined pursuant to Subsection D of Section 7-36-21.2 NMSA 1978;

[(4)] (5) the value set on the property for property taxation purposes;

[(5)] (6) the tax ratio;

[(6)] (7) the taxable value of the property;

[(7)] (8) the amount of any exemptions allowed and a statement of the net taxable value of the property after deducting the exemptions;

[(8)] (9) the allocations of net taxable values to the governmental units; and

[(9)] (10) briefly, the procedures for protesting the value determined for property taxation purposes, classification, allocation of values to governmental units or denial of a claim for an exemption.

E. The county assessor may mail the valuation notice required pursuant to Subsection A of this section to taxpayers with the preceding tax year's property tax bills if the net taxable value of the property has not changed since the preceding taxable year. In this early mailing, the county assessor shall provide clear notice to the taxpayer that the valuation notice is for the succeeding tax year and that the deadlines for protest of the value or classification of the property apply to this mailing date."

Section 4. Section 7-38-35 NMSA 1978 (being Laws 1973, Chapter 258, Section 75, as amended) is amended to read:

"7-38-35. PREPARATION OF PROPERTY TAX SCHEDULE BY ASSESSOR.--

A. After receipt of the rate-setting order and the order imposing the tax, but no later than October 1 of each tax year, the county assessor shall prepare a property tax schedule for all property subject to property taxation in the county. This schedule shall be in a form and contain the information required by regulations of the [division] department and shall contain at least the following information:

(1) the description of the property taxed and, if the property is personal property, its location;

(2) the property owner's name and address and the name and address of any person other than the owner to whom the tax bill is to be sent;

(3) the classification of the property;

(4) the assessed value of the property, if the property is a residential property, as determined in Subsection D of Section 7-36-21.2 NMSA 1978;

[(4)] (5) the value of the property determined for property taxation purposes;

[(5)] (6) the tax ratio;

[(6)] (7) the taxable value of the property;

[(7)] (8) the amount of any exemption allowed and a statement of the net taxable value of the property after deducting the exemption;

[(8)] (9) the allocations of net taxable value to the governmental units;

[(9)] (10) the tax rate in dollars per thousand of net taxable value for all taxes imposed on the property;

[(l0)] (11) the amount of taxes due on the described property; and

[(11)] (12) the amount of any penalties and interest already imposed and due on the described property.

B. The property tax schedule is a public record and a part of the valuation records."

Section 5. Section 7-38-37 NMSA 1978 (being Laws 1973, Chapter 258, Section 77, as amended) is amended to read:

"7-38-37. CONTENTS OF PROPERTY TAX BILL.--Each property tax bill shall be in a form and contain the information required by regulations of the department and shall contain at least the following:

A. all of the information required to be contained in the property tax schedule presented uniformly and clearly and fully disclosing the tax rate and the amount of tax due for each taxing entity and tax purpose included in the bill;

B. the amount of property taxes due on each installment, the due dates of the installments and the dates on which taxes become delinquent;

C. a brief statement of the option available to make prepayments of the property tax due pursuant to Section 7-38-38.2 NMSA 1978;

D. a brief statement of the procedure under Section 7-38-39 NMSA 1978 for protesting values for property taxation purposes, classification, allocation of values to governmental units or a denial of a claim for an exemption;

E. a statement of the interest and penalties imposed by law for delinquency in the payment of property taxes and the remedies available against the taxpayer and the property for nonpayment of the amount due;

F. a statement advising the property owner that the property tax bill is the only notice he will receive for payment of both installments of the tax if no separate notice will be sent with respect to the second installment; and

G. the amount of any prepayment of the first installment made pursuant to Section 7-38-38.2 NMSA 1978."

Section 6. Section 4-44-1 NMSA 1978 (being Laws 1957, Chapter 196, Section 1) is amended to read:

"4-44-1. CLASSIFICATION FOR SALARY PURPOSES.--

A. For the purpose of fixing salaries of county officers, the several counties of the state, except "H" class counties, are hereby classified as follows:

(1) those having a final, full assessed valuation of over seventy-five million dollars ($75,000,000) and having a population of one hundred thousand persons or more as determined by the last official United States census, as class "A" counties;

(2) those having a final, full assessed valuation in excess of seventy-five million dollars ($75,000,000) with a population less than one hundred thousand persons as determined by the last official United States census, as class "B" counties;

(3) those having a final, full assessed valuation in excess of forty-five million dollars ($45,000,000) with a population less than one hundred thousand persons as determined by the last official United States census, as class "C" counties;

(4) those having a final, full assessed valuation of over fourteen million dollars ($14,000,000), as counties of the first class;

(5) those having a final, full assessed valuation of [eight and one-fourth million dollars] eight million two hundred fifty thousand dollars ($8,250,000) and under fourteen million dollars ($14,000,000), as counties of the second class;

(6) those having a final, full assessed valuation of [six and one-half million dollars] six million five hundred thousand dollars ($6,500,000) and under [eight and one-fourth million dollars] eight million two hundred fifty thousand dollars ($8,250,000), as counties of the third class;

(7) those having a final, full assessed valuation of [four and three-fourths million dollars] four million seven hundred fifty thousand dollars ($4,750,000) and under [six and one-half million dollars] six million five hundred thousand dollars ($6,500,000), as counties of the fourth class; and

(8) those having a final, full assessed valuation of less than [four and three-fourths million dollars] four million seven hundred fifty thousand dollars ($4,750,000), as counties of the fifth class.

B. The assessed valuation for each year shall be the [full valuation] assessed value as determined in Subsection D of Section 7-36-21.2 NMSA 1978 as finally fixed for [said] that year."

Section 7. APPLICABILITY.--The provisions Sections 1 through 6 of this act apply to the 2001 and subsequent property tax years.