SENATE BILL 322
50th legislature - STATE OF NEW MEXICO - first session, 2011
INTRODUCED BY
Mark Boitano
AN ACT
RELATING TO PROPERTY TAXATION; SUSPENDING THE LIMITATION ON INCREASES IN VALUATION OF RESIDENTIAL PROPERTY FOR THE 2012 TAXABLE YEAR; REQUIRING REASSESSMENT OF RESIDENTIAL PROPERTY TO CURRENT AND CORRECT VALUE; PROVIDING FOR AN OPTIONAL THREE-YEAR PHASING-IN OF THE RESULTING CHANGES IN VALUATION; PROVIDING FOR A SALES RATIO OF NINETY-FIVE; ELIMINATING THE REVALUATION OF RESIDENTIAL PROPERTY UPON CHANGE IN OWNERSHIP.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. 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.--
A. Except as otherwise provided in 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] 2013 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, except for solar energy system installations, 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.
C.] B. 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:
(1) for the 2012 tax year, residential property shall be reassessed and shall be valued at the current and correct value; and
(2) the department shall determine for the [2000] 2012 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] 2012 tax year is less than [eighty-five] ninety-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] apply the limitations of Subsection A of this section and the department shall conduct a reassessment of residential property in the county so that by the [2003] 2014 tax year, the sales ratio is at least [eighty-five] ninety-five. After such reassessment, the limitation on increases in valuation in this section shall apply in those counties in the earlier of the [2004] 2015 tax year or the first tax year following the tax year that the county has a sales ratio of [eighty-five] ninety-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.
C. If the valuation of a taxpayer's residential property is more than one hundred three percent of the value in the prior tax year as a result of the reassessment provisions of Subsection B of this section, the taxpayer may elect to phase in over a period of three years in amounts as nearly equal as practicable the increase in valuation for property taxation purposes. The county assessor shall inform a taxpayer if the valuation of the taxpayer's residential property for property taxation purposes will qualify for the phasing-in period and shall inform the taxpayer of any property tax exemptions or limitations to which the taxpayer is entitled.
D. 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.
[E. As used in this section, "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) to a trustee for the beneficial use of the spouse of the transferor or the surviving spouse of a deceased transferor;
(2) to the spouse of the transferor that takes effect upon the death of the transferor;
(3) that creates, transfers or terminates, solely between spouses, any co-owner's interest;
(4) to a child of the transferor, who occupies the property as 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) 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) for the purpose of quieting the title to real property or resolving a disputed location of a real property boundary;
(7) to a revocable trust by the transferor with the transferor, the transferor's spouse or a child of the transferor as beneficiary; or
(8) from a revocable trust described in Paragraph (7) of this subsection back to the settlor or trustor or to the beneficiaries of the trust.
F.] E. As used in this section, "solar energy system installation" means an installation that is used to provide space heat, hot water or electricity to the property in which it is installed and is:
(1) an installation that uses solar panels that are not also windows;
(2) a dark-colored water tank exposed to sunlight; or
(3) a non-vented trombe wall."
SECTION 2. APPLICABILITY.--The provisions of this act apply to the 2012 and subsequent property tax years.
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