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 a vailable 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 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 Barela

ORIGINAL DATE

LAST UPDATED

2/23/2007

2/28/2007 HB HJR 13

SHORT TITLE National Guard Property Tax Exemption, CA

SB

ANALYST Schuss

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

FY09

Unknown

Unknown Recurring General Fund

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Attorney Generals Office (AGO)

Taxation and Revenue Department (TRD)

SUMMARY

Synopsis of Bill

House Joint Resolution 13, if approved by the voters, would amend Article VIII Section 5 of the

New Mexico Constitution to define “member of the armed forces of the United States" for

property tax exemption purposes to include a member of the National Guard who is honorably

discharged, unless the person received a discharge for misconduct.

FISCAL IMPLICATIONS

There will be a negative impact to tax revenue and this will depend on how many of those

honorably discharged from the National Guard qualify and take this exemption. However, the

debt service from property taxes will still have to be paid, so potentially rates will adjust to

correct for any loss. (See Technical Issues and Possible Questions)

There could be significant impacts to some jurisdictions based on the concentration of those

eligible to take the exemption and property tax rates.

House Joint Resolution 13 – Page

2

An analysis from the Taxation and Revenue Department will be necessary to determine these

figures.

According to the Department of Military Affairs, there are approximately 4,000 active members

in the New Mexico National Guard, and of those, 400 to 800 are discharged on a yearly basis.

SIGNIFICANT ISSUES

AGO has included the following in their analysis:

Article VIII Section 5 of the New Mexico Constitution currently requires the Legislature

to provide an annual property tax exemption in the amount of $4,000 to honorably discharged

“members of the armed forces of the United States". The “veteran’s exemption" is provided in

NMSA Section 7-37-5. Although the term “National Guard" is not defined in this resolution,

presumably its amendments are considered necessary because of the duel-status of National

Guard personnel as both members of the “state militia" in peacetime, and the federally

recognized “National Guard" subject to Federal activation. That status arises from Article I

Section 8 of the United States Constitution granting Congress the authority to govern and call

forth the militia, and the Second Amendment providing for state militias, which fall under the

control of the Governor during peacetime.

The National Guard is recognized by the Militia Act of 1903, 10 U.S.C. 311, as the

largest organized Federal Reserve military force in the United States. 10 U.S.C. 12602

recognizes duty in the National Guard as duty in the Army or Air Force Reserve. 32 U.S.C. 101

defines the National Guards to mean the federally recognized state militias.

The Army National Guard is one of three components of the U.S. Army. The other two

consist of the Active Army and the Army Reserves. The Air National Guard is a separate

component of the United States Air Force.

New Mexico’s militia is recognized in Article XVIII Section 1 of the New Mexico

Constitution as the “New Mexico National Guard" and in NMSA Sections 20-4-1 to 20-4-14.

The resolution presumably authorizes the exemption for members of the New Mexico

National Guard who may be honorably discharged while serving in their capacity as state militia

members.

According to TRD, currently the discharged members of the National Guard are not granted the

tax exemption unless they have been called up to active federal duty. Basic training and

advanced training are considered active duty for training only, this is reflected as such on the DD

214. New Mexico Statutes require active duty for a minimum of 90 days, this duty must be for

active duty other than for training, for this reason as it stands members of the National Guard

who have not been called up for active federal duty do not qualify for the veterans tax

exemption.

TECHNICAL ISSUES

It is not clear whether or not HJR 13 would include those that were honorably discharged but not

considered to have been on “active duty" because certain qualifications were not met.

House Joint Resolution 13 – Page

3

The constitution currently states that one who is honorably discharged from the armed services

and was on “active duty" continuously for 90 days would qualify. This potentially would already

include those from the National Guard.

This should be clarified before HJR 13 appears on a ballot.

POSSIBLE QUESTIONS

Is the intent of HJR 13 to remove the active duty requirement for those honorably discharged

from the National Guard.

BS/csd:nt