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 Youngberg

ORIGINAL DATE

LAST UPDATED

02/01/08

HM 41

SHORT TITLE Study Valuation Of Unimproved Property

SB

ANALYST Hanika-Ortiz

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

No appropriation

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

SUMMARY

Synopsis of Bill

House Memorial 41 requests the New Mexico Legislative Council to assign the appropriate

interim committee to review the implications of capping for property tax purposes the assessed

valuation of unimproved property.

The Memorial further resolves that copies of the memorial are to be transmitted to the co-chairs

of the New Mexico Legislative Council.

FISCAL IMPLICATIONS

The data necessary to accurately estimate effects of capping the assessed value of unimproved

property for property tax purposes is not available to this analyst and would need to be obtained

from TRD before the first interim committee meeting.

Any direct fiscal impact to the State will be determined by recommendation made by the

committee and acted upon by the State.

SIGNIFICANT ISSUES

The Memorial provides for the following:

House Memorial 41 – Page

2

•

Homeowners' property tax bills have been relatively stable over the last several years as

increases in assessed valuation for property tax purposes have been capped at three

percent a year.

•

The legislature properly acted to cap increases in assessed valuation to mitigate against

the shocking effects of "tax lightning", which resulted as the real estate market drove up

the potential, but unrealized, gains in property values.

•

Capping increases in the assessed valuation of residential property also had the effect of

shifting more of the property tax burden to unimproved property, the owners of which do

not enjoy a cap on increases in assessed valuation.

•

Owners of unimproved property face many of the same financial challenges as

homeowners who previously faced sharp and sudden increases in their property tax bills.

PERFORMANCE IMPLICATIONS

The Memorial resolves that the New Mexico Legislative Council be requested to assign the

appropriate interim committee to review the policies and implications associated with similarly

capping increases in the assessed valuation of vacant property, and then report its findings and

recommendations, if any, to the first session of the forty-ninth legislature.

AHO/nt