Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports if they are used for other purposes.

 

Current FIRs (in HTML & Adobe PDF formats) are available on the NM Legislative Website (legis.state.nm.us).  Adobe PDF versions include all attachments, whereas HTML versions may not.  Previously issued FIRs and attachments may also be obtained from the LFC in Suite 101 of the State Capitol Building North.

 

 

F I S C A L    I M P A C T    R E P O R T

 

 

 

SPONSOR

Zanetti

DATE TYPED

2/9/2004

HB

537

 

SHORT TITLE

Agricultural Land Valuation

SB

 

 

 

ANALYST

Garcia

 

 

REVENUE

 

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY04

FY05

 

 

Indeterminate

 

 

 

 

 

 

 

(Parenthesis ( ) Indicate Revenue Decreases)

 

SOURCES OF INFORMATION

LFC Files

 

Responses Not Received From

Department of Agriculture

Taxation and Revenue Department

State Engineer

 

SUMMARY

 

Synopsis of Bill

 

The bill amends Section 7-36-20 NMSA 1978 dealing with the valuation of land used primarily for agricultural use. The only significant change the bill makes is moving the required valuation period from three tax years to five tax years for land used primarily for agricultural purposes. Agricultural use in this context is defined as land used for the “production of plants, crops, trees, forest products, orchard crops, livestock, poultry or fish.

 

Significant Issues

 

1)  The value of land used primarily for agricultural uses is determined on the basis of the land’s capacity to produce agricultural goods. For valuation purposes, bona fide evidence must be shown that the land is used primarily for agricultural purposes for eligibility of the land to be valued under the special method of valuation. 

 

2) Under current law, if the land was valued in one or more of the three tax years prior to the year it was revalued and the uses of the land has not changed, the land continues to be eligible for special valuation. However, due to widespread drought conditions in New Mexico, many agricultural lands may be stagnant or not in use for a period of time, which may put their special valuation eligibility in jeopardy. Consequently, the bill extends the period to five years to possibly extend eligibility for special valuation.

 

FISCAL IMPLICATIONS

 

Without a response from Taxation and Revenue or the Agriculture Department on how many lands are affected under the special valuation, it is impossible to determine the fiscal impact.

 

ADMINISTRATIVE IMPLICATIONS

 

The state Taxation and Revenue Department and possibly various county assessors may be required to change its administration of land valuations.

 

DG/sec