SENATE BILL 217
49th legislature - STATE OF NEW MEXICO - second session, 2010
INTRODUCED BY
Mark Boitano
AN ACT
RELATING TO TAXATION; CONTINUING CURRENT AND CORRECT VALUATION OF NONRESIDENTIAL PROPERTY; PROVIDING FOR RESIDENTIAL PROPERTY VALUE LIMITS TO CONTINUE REGARDLESS OF OCCURRENCE OF A CHANGE IN OWNERSHIP OF THE PROPERTY; AUTHORIZING COUNTIES TO ADOPT A LOCAL OPTION RESIDENTIAL PROPERTY VALUE LIMIT BASED ON PROPERTY TAXABLE VALUES IN 2001; PROVIDING FOR VALUATION OF NEW CONSTRUCTION.
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, as amended) is amended to read:
"7-36-16. RESPONSIBILITY OF COUNTY ASSESSORS TO DETERMINE AND MAINTAIN CURRENT AND CORRECT VALUES OF NONRESIDENTIAL PROPERTY AND TO VALUE RESIDENTIAL 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. [Except as limited in Section 7-36-21.2 NMSA 1978, they] County assessors shall [also] implement a program of updating nonresidential property values 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] secretary.
B. A county assessor shall implement a program of updating residential property values so that the values reflect the provisions and limitations set forth in Section 7-36-21.2 NMSA 1978.
[B.] C. The [director] secretary shall implement a program of regular evaluation of county assessors' valuation activities with particular emphasis on the maintenance of current and correct values and the accurate implementation of Section 7-36-21.2 NMSA 1978.
[C.] D. Upon request of the county assessor, the [director] secretary 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.] E. 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] the county assessor's 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.] F. 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] the county assessor for this function, the county assessor shall present with [his] the county assessor's 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. Section 7-36-21.2 NMSA 1978 (being Laws 2000, Chapter 10, Section 2, as amended) is amended to read:
"7-36-21.2. LIMITATION ON INCREASES IN VALUATION OF RESIDENTIAL PROPERTY--LOCAL OPTION VALUE ROLLBACK.--
A. Except as provided in Subsections D through F of this section, residential property shall be valued at its current and correct value in accordance with the provisions of the Property Tax Code; provided that for the 2001 and subsequent tax years, the value of a property in any tax year shall not exceed the higher of one hundred three percent of the value in the tax year prior to the tax year in which the property is being valued or one hundred six and one-tenth percent of the value in the tax year two years prior to the tax year in which the property is being valued. This limitation on increases in value does not apply to:
(1) a residential property in the first tax year that it is valued for property taxation purposes;
(2) any physical improvements made to the property during the year immediately prior to the tax year or omitted in a prior tax year; or
(3) valuation of a residential property in any tax year in which
[(a) a change of ownership of the property occurred in the year immediately prior to the tax year for which the value of the property for property taxation purposes is being determined; or
(b)] the use or zoning of the property has changed in the year prior to the tax year.
B. If a change of ownership of residential property occurred in the year immediately prior to the tax year for which the value of the property for property taxation purposes is being determined, the value of the property shall [be its current and correct value as determined pursuant to the general valuation provisions of the Property Tax Code] not exceed the higher of one hundred three percent of the value in the tax year prior to the tax year in which the property is being valued or one hundred six and one-tenth percent of the value in the tax year two years prior to the tax year in which the property is being valued; provided that the increase shall not result in a valuation greater than the current and correct value for the tax year in which the property is being valued.
[C. To assure that the values of residential property for property taxation purposes are at current and correct values in all counties prior to application of the limitation in Subsection A of this section, the department shall determine for the 2000 tax year the sales ratio pursuant to Section 7-36-18 NMSA 1978 or, if a sales ratio cannot be determined pursuant to that section, conduct a sales-ratio analysis using both independent appraisals by the department and sales. If the sales ratio for a county for the 2000 tax year is less than eighty-five, as measured by the median ratio of value for property taxation purposes to sales price or independent appraisal by the department, the county shall not be subject to the limitations of Subsection A of this section and shall conduct a reassessment of residential property in the county so that by the 2003 tax year, the sales ratio is at least eighty-five. After such reassessment, the limitation on increases in valuation in this section shall apply in those counties in the earlier of the 2004 tax year or the first tax year following the tax year that the county has a sales ratio of eighty-five or higher, as measured by the median ratio of value for property taxation purposes to sales value or independent appraisal by the department. Thereafter, the limitation on increases in valuation of residential property for property taxation purposes in this section shall apply to subsequent tax years in all counties.
D.] C. The provisions of this section do not apply to residential property for any tax year in which the property is subject to the valuation limitation in Section 7-36-21.3 NMSA 1978.
D. The board of county commissioners of a county may adopt an ordinance requiring the county assessor:
(1) for the tax year beginning January 1, 2011, to value all residential property in the county, except for new construction of residential property that was first valued after 2001, at its taxable value in the 2001 tax year and increase the value of each property by no more than three percent per year through the tax year for which values are being calculated in the current calendar year; provided that the increase shall not result in a valuation greater than the current and correct value for the tax year in which the property is being valued; and
(2) for tax years beginning on or after:
(a) January 1, 2012, to limit the increases in residential property values of property valued at the property's current and correct value, except for new construction, to no more than three percent of the taxable value of the property in the tax year one year prior to the tax year in which the property is being valued; or
(b) January 1, 2013, to limit the increases in residential property values of property valued at the property's current and correct value, except for new construction, to no more than six and one-tenth percent of the taxable value of the property in the tax year two years prior to the tax year in which the property is being valued.
E. A county that adopts the local option set forth in Subsection D of this section shall:
(1) adopt an ordinance prior to January 1, 2011 making the provisions of Subsection D of this section effective for tax years beginning on or after January 1, 2011 or beginning on or after the first tax year in which all residential property in the county is valued at the property's current and correct value but not later than the 2013 tax year;
(2) cease to value property pursuant to Subsection A of this section for tax years beginning on or after January 1, 2011, unless the county assessor is not able to revalue the residential property in the entire county prior to the 2012 tax year, in which case the county assessor shall cease to value residential property pursuant to Subsection A of this section in the first year following the revaluation of all residential property in the county, but no later than tax year 2013; and
(3) provide in the ordinance implementing Subsection D of this section that the limitation does not apply to:
(a) a residential property in the first tax year that the property is valued as residential property for property taxation purposes;
(b) any physical improvements made to the property during the year immediately prior to the tax year or omitted in a prior tax year; and
(c) valuation of a residential property in any tax year in which the use or zoning of the property has changed in the year prior to the tax year.
F. A county assessor shall:
(1) value new construction of residential property by multiplying the sales price of the property by the prior values median ratio generated annually by the department for the county in which the new construction is located; and
(2) revalue residential property that was first valued for tax purposes as residential property between tax years 2002 and 2011 by adjusting the current assessed value of the property to be consistent with the prior values median ratio for the county in which the property being valued is located.
[E.] G. As used in this section:
(1) "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)] (a) to a trustee for the beneficial use of the spouse of the transferor or the surviving spouse of a deceased transferor;
[(2)] (b) to the spouse of the transferor that takes effect upon the death of the transferor;
[(3)] (c) that creates, transfers or terminates, solely between spouses, any co-owner's interest;
[(4)] (d) to a child of the transferor, who occupies the property as [his] that person's principal residence at the time of transfer; provided that the first subsequent tax year in which that person does not qualify for the head of household exemption on that property, a change of ownership shall be deemed to have occurred;
[(5)] (e) 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;
[(6)] (f) for the purpose of quieting the title to real property or resolving a disputed location of a real property boundary;
[(7)] (g) to a revocable trust by the transferor with the transferor, the transferor's spouse or a child of the transferor as beneficiary; or
[(8)] (h) from a revocable trust described in [Paragraph (7)] Subparagraph (g) of this [subsection] paragraph back to the settlor or trustor or to the beneficiaries of the trust; and
(2) "prior values median ratio" means a ratio generated by the department for a county to be used to determine values of new construction set forth in the Sales Ratio Statistical Summary published annually by the department."
Section 3. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2010.
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