46th legislature - STATE OF NEW MEXICO - first session, 2003

RELATING TO TAXATION; AUTHORIZING A MUNICIPALITY OR COUNTY TO ENACT AN ORDINANCE IMPOSING A TRANSFER TAX UPON CERTAIN TRANSFERS OF RESIDENTIAL PROPERTY; SPECIFYING THAT THE REVENUES GENERATED BY THE PROPERTY TRANSFER TAX BE USED FOR AFFORDABLE HOUSING AND OPEN SPACE PURPOSES; MAKING TRANSFER INFORMATION CONFIDENTIAL; PROVIDING A PENALTY.

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

Section 1. SHORT TITLE.--This act may be cited as the "Transfer Tax Act".

Section 2. DEFINITIONS.--As used in the Transfer Tax Act:

A. "consideration" means the full amount of money and the value of any other thing of value received by a transferor in payment or exchange for a transfer of property, including, without limitation, the amounts or value of any encumbrances, unpaid property taxes or similar charges against the property existing at the time of transfer and assumed or paid by the transferee;

B. "county" means a county, including an H class county;

C. "governing body" means the city council or city commission of a city, the board of trustees of a town or village, the county commission of a county or the county council of an H class county;

D. "government entity" means the United States, the state and any agencies, branches, boards, commissions, political subdivisions and instrumentalities of the United States or the state;

E. "municipality" means any incorporated city, town or village, whether incorporated under general act, special act or special charter, and an H class county;

F. "person" means an individual or any other legal entity;

G. "property" means "residential property" as defined in the Property Tax Code;

H. "tax" means the municipal property transfer tax or the county property transfer tax authorized to be imposed pursuant to the Transfer Tax Act;

I. "transfer" means the passage from one person to another of the legal or equitable title to property but does not include transfers:

(1) in which the transferor or transferee is a government entity;

(2) in which only a security interest in property is transferred to the transferee;

(3) made pursuant to the order or judgment of a court of competent jurisdiction;

(4) as a result of intestate succession, distribution to a devisee pursuant to a will or distribution to a beneficiary pursuant to a trust;

(5) between husband and wife with only nominal actual consideration for the transfer;

(6) that are noncontractual transfers; or

(7) in which the transferor or the transferee is an organization exempt from federal taxation under Section 501 of the Internal Revenue Code of 1986, as amended;

J. "transfer instrument" means the document by which a transfer is effected or evidenced and includes without limitation any deed, real estate contract or memorandum of real estate contract;

K. "transferee" means the person to whom a transfer is made by a transfer instrument; and

L. "transferor" means the person from whom a transfer is made by a transfer instrument.

Section 3. IMPOSITION OF TAX--DENOMINATION AS "MUNICIPAL PROPERTY TRANSFER TAX" OR "COUNTY PROPERTY TRANSFER TAX"--LOCAL OPTION--ELECTION REQUIRED.--

A. The governing body of a municipality may adopt an ordinance imposing a tax in accordance with the provisions of the Transfer Tax Act upon the transfer of property located within the boundaries of the municipality. The tax shall be known as the "municipal property transfer tax". The ordinance imposing the tax shall include provisions for allocating the consideration upon which the tax is calculated when only a part of the property transferred is located within the boundaries of the municipality.

B. The governing body of a county may adopt an ordinance imposing a tax in accordance with the provisions of the Transfer Tax Act upon the transfer of property located within the area of the county outside municipal boundaries. The tax shall be known as the "county property transfer tax". The ordinance imposing the tax shall include provisions for allocating the consideration upon which the tax is calculated when only a part of the property transferred is located within the boundaries of the county or within the area of the county outside the boundaries of a municipality.

C. The ordinance enacted imposing a tax pursuant to the provisions of Subsection A or B of this section:

(1) shall specify the rate of the tax, including the amount of the affordable housing exclusion;

(2) shall specify the period of time during which the tax will be imposed, if the tax is imposed for a limited number of years; and

(3) shall specify that the revenues from the tax shall be deposited in special funds in the county or municipal treasury, as applicable, to be used in equal amounts for affordable housing and open space purposes as provided in Section 6 of the Transfer Tax Act.

D. An ordinance imposing a tax authorized pursuant to this section or repealing or amending the tax shall not go into effect until after an election is held and a majority of the voters voting in the election votes in favor of the ordinance. The governing body shall adopt a resolution calling for an election within seventy-five days of the date the ordinance is adopted on the question of imposing, repealing or amending the tax. In the case of a municipal property transfer tax, the question shall be submitted to the voters of the municipality as a separate question at a regular municipal election or at a special election called for that purpose by the governing body. In the case of a county property transfer tax, the question shall be submitted to the voters in the area of the county outside municipal boundaries as a separate question at a general election or at a special election called for that purpose by the governing body. A special election shall be called, conducted and canvassed in substantially the same manner as provided by law for general elections, in the case of a county, or as provided in the Municipal Code for special elections, in the case of a municipality. If a majority of the voters voting on the question approves the ordinance, then the ordinance shall become effective in accordance with the Transfer Tax Act. If the question of imposing, repealing or amending a municipal property transfer tax or a county property transfer tax fails, the governing body shall not again propose the imposition, repeal or amendment of the tax for a period of one year from the date of the election.

Section 4. RATE OF TAX.--

A. The tax shall be imposed by a governing body at a graduated rate not to exceed a five percent marginal rate on the consideration that exceeds the affordable housing exclusion.

B. As used in this section, "affordable housing exclusion" means the amount determined by the governing body of a municipality or county, as applicable, to be the maximum value of a property that is affordable for a low- or moderate-income person or household in that county or municipality.

Section 5. PAYMENT OF TAX.--The tax shall be paid by the transferee.

Section 6. USE OF TAX--AFFORDABLE HOUSING AND OPEN SPACE.--

A. Fifty percent of the net receipts from a tax shall be deposited in a local housing trust fund in the municipal treasury, in the case of a municipal property transfer tax, or county treasury, in the case of a county property transfer tax. Money in the fund shall be used to provide affordable housing in the municipality or county, as applicable, for persons or households of low- to moderate-income, in accordance with law enacted to implement the provisions of Subsection F of Section 14 of Article 9 of the constitution of New Mexico.

B. Fifty percent of the net receipts from a tax shall be deposited in a special fund in the municipal treasury, in the case of a municipal property transfer tax, or county treasury, in the case of a county property transfer tax to be expended by the municipality or county, with the advice and recommendation of the open space board, for acquisition either in fee or in less-than-fee interests for permanent protection of lands that have conservation value. The acquisitions may include agricultural land, such as ranch, farm or forest land; habitat for plant or animals of ecological significance; scenic open space that can easily be seen by the public; land for public recreational use; or land with historic or archaeological sites. As used in this subsection, "permanent protection" means that the conservation value for which the land was acquired will be protected in perpetuity by a method such as a perpetual conservation easement.

C. Upon approval of a municipal or county property transfer tax, the governing body of the municipality or county shall establish an affordable housing board and an open space board. Each board shall consist of nine members appointed by the governing body for terms determined by the governing body. The boards shall advise, assist and make recommendations to the governing body regarding use of the municipal or county property transfer tax revenues.

Section 7. TRANSFER INSTRUMENTS--PAYMENT OF TAX WITH RECORDING FEES.--For property transfers in a municipality that has imposed a tax or in the area outside municipal boundaries in a county that has imposed a tax, a transfer instrument evidencing a transfer of property in that municipality or county area shall not be accepted for recording by the county clerk unless at the time of recordation of the transfer instrument is requested there is presented with the transfer instrument an affidavit completed in accordance with Section 8 of the Transfer Tax Act. Any tax due shall be paid to the county clerk with the recording fees.

Section 8. AFFIDAVIT OF TRANSFEREE REQUIRED.--

A. For every transfer in a county or municipality that has imposed the tax, as applicable, the transferee shall prepare at or after the time the transfer instrument is executed an affidavit of transfer completed in accordance with this section.

B. The affidavit of transfer shall include at least the following information:

(1) the complete names of the transferor and transferee appearing on the transfer instrument;

(2) the current residence address and mailing address of both the transferor and the transferee;

(3) the legal description of the property transferred as it appears on the transfer instrument;

(4) the consideration; and

(5) the amount of tax due, if any.

C. Upon receiving payment from the transferee, the county clerk shall deliver the tax collected and the affidavit to the county treasurer by the end of the next business day. If the tax is a municipal property transfer tax, the county treasurer shall transfer the net proceeds to the municipal treasurer.

D. An amount not to exceed two percent of the proceeds from the municipal property transfer tax or the county property transfer tax may be retained by the county collecting the tax to defray administrative costs.

Section 9. FILING AND CONFIDENTIALITY OF AFFIDAVIT.--

A. The original affidavit shall be kept in a separate file maintained for that purpose by the county treasurer. The file shall be maintained in a manner that permits ease of location and retrieval of information by name

of transferee. The information from the affidavit may be entered and retained in an electronic data processing system, and in that case the original form may be destroyed.

B. The information contained on the affidavit is confidential and shall not be disclosed except:

(1) to employees in the county treasurer's office of the county imposing the tax or of the county in which a municipality is imposing the tax and employees in the county clerk's office, including persons performing official auditing of the functions and records of those offices, any of whom must have a demonstrated need for the information in carrying out their official duties;

(2) under an order of a court of competent jurisdiction; or

(3) for statistical purposes if used in a way that the information is not identifiable as applicable to any transferor or particular property.

Section 10. CRIMINAL PENALTY.--A person who knowingly makes a false statement on an affidavit of transfer required by a municipal or county ordinance imposing a tax pursuant to the Transfer Tax Act is guilty of a misdemeanor and upon conviction shall be punished by the imposition of a fine of not more than five hundred dollars ($500).