SENATE JUDICIARY COMMITTEE SUBSTITUTE FOR

SENATE BILL 289

51st legislature - STATE OF NEW MEXICO - first session, 2013

AN ACT

RELATING TO TAXATION; PROVIDING FOR A FIVE-YEAR AUTOMATIC APPLICATION OF THE LIMITATION ON INCREASE IN VALUE FOR SINGLE-FAMILY DWELLINGS OCCUPIED BY LOW-INCOME OWNERS SIXTY-FIVE YEARS OF AGE OR OLDER OR DISABLED; PROVIDING FOR PENALTIES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. Section 7-36-21.3 NMSA 1978 (being Laws 2000, Chapter 21, Section 1, as amended) is amended to read:

     "7-36-21.3. LIMITATION ON INCREASE IN VALUE FOR

SINGLE-FAMILY DWELLINGS OCCUPIED BY LOW-INCOME OWNERS

SIXTY-FIVE YEARS OF AGE OR OLDER OR DISABLED--REQUIREMENTS--PENALTIES.--

          A. For the 2001 and subsequent tax years, the valuation for property taxation purposes of a single-family dwelling owned and occupied by a person who is sixty-five years of age or older and whose modified gross income, as defined in the Income Tax Act, for the prior taxable year did not exceed the greater of eighteen thousand dollars ($18,000) or the amount calculated pursuant to Subsection [F] I of this section shall not be greater than the valuation of the property for property taxation purposes in the:

                (1) 2001 tax year;

                (2) year in which the owner's sixty-fifth birthday occurs, if that is after 2001; or

                (3) tax year following the tax year in which an owner who turns sixty-five or is sixty-five years of age or older first owns and occupies the property, if that is after 2001.

          B. For the 2009 and subsequent tax years, the valuation for property taxation purposes of a single-family dwelling owned and occupied by a person who is sixty-five years of age or older or disabled and whose modified gross income, as defined in the Income Tax Act, for the prior taxable year did not exceed the greater of thirty-two thousand dollars ($32,000) or the amount calculated pursuant to Subsection [F] I of this section shall not be greater than the valuation of the property for property taxation purposes in:

                (1) the 2009 tax year, if the person owns and occupies the property in the 2009 tax year;

                (2) the tax year in which the owner's sixty-

fifth birthday occurs, if that is after 2009; or

                (3) the tax year following the tax year in which an owner who is sixty-five years of age or older first owns and occupies the property, if that is after 2009.

          C. For the 2003 and subsequent tax years, the valuation for property taxation purposes of a single-family dwelling owned and occupied by a person who is disabled and whose modified gross income, as defined in the Income Tax Act, for the prior taxable year did not exceed the greater of eighteen thousand dollars ($18,000) or the amount calculated pursuant to Subsection [F] I of this section shall not be greater than the valuation of the property for property taxation purposes in the:

                (1) 2003 tax year;

                (2) year in which the owner is determined to be disabled, if that is after 2003; or

                (3) tax year following the tax year in which an owner who is disabled or who is determined in that year to be disabled first owns and occupies the property, if that is after 2003.

          D. An owner who is entitled to a limitation in valuation pursuant to more than one subsection of this section may designate the subsection pursuant to which the limitation shall be applied.

          [E. The limitation of value specified in Subsections A, B and C of this section shall be applied in a tax year in which the owner claiming entitlement files with the county assessor an application for the limitation on a form furnished to the owner by the assessor. The application form shall be designed by the department and shall provide for proof of age or disability, occupancy and income eligibility for the tax year for which application is made.]

          E. The limitation of value specified in Subsections A, B and C of this section shall be claimed in order to be allowed. The limitations may be claimed by filing proof of eligibility with the county assessor on an application form for the limitation furnished by the assessor. The application form shall be designed by the department and shall provide for proof of age or disability, occupancy and income eligibility. An owner who applies for the limitation of value specified in this section and files proof of income eligibility for the three consecutive years immediately prior to the tax year for which the application is made need not claim the limitation for subsequent tax years if there is no change in eligibility. The county assessor shall apply that limitation automatically in subsequent tax years until a change in eligibility occurs.

          F. An owner who has claimed and been allowed the limitation of value specified in this section for the three consecutive tax years immediately prior to the 2014 tax year need not claim the limitation for subsequent tax years if there is no change in eligibility. The county assessor shall apply that limitation automatically in subsequent tax years until a change in eligibility occurs.

          G. A person who has had a limitation applied to a tax year and subsequently becomes ineligible for the limitation because of a change in the person's status or income or a change in the ownership of the property against which the limitation was applied shall notify the county assessor of the loss of eligibility for the limitation by the last day of February of the tax year immediately following the year in which loss of eligibility occurs.

          H. A person who violates the provisions of this section by intentionally claiming and receiving the benefit of a limitation to which the person is not entitled or who fails to comply with the provisions of Subsection G of this section may be liable for any additional taxes due, interest and a civil penalty of three times the amount of additional taxes due.

          [F.] I. For the 2002 tax year and each subsequent tax year, the maximum amount of modified gross income in Subsections A, B and C of this section shall be adjusted to account for inflation. The department shall make the adjustment by multiplying the maximum amount for tax year 2000 by a fraction, the numerator of which is the consumer price index ending during the prior tax year and the denominator of which is the consumer price index ending in tax year 2000. The result of the multiplication shall be rounded down to the nearest one hundred dollars ($100), except that if the result would be an amount less than the corresponding amount for the preceding tax year, then no adjustment shall be made. For purposes of this subsection, "consumer price index" means the consumer price index for all urban consumers published by the United States department of labor for the month ending September 30. The department shall publish annually the amount determined by the calculation and distribute it to each county assessor no later than December 1 of each tax year.

          [G.] J. The limitation of value specified in Subsections A, B and C of this section does not apply to:

                (1) a change in valuation resulting from any physical improvements made to the property during the year immediately prior to the tax year or a change in the permitted use or zoning of the property during the year immediately prior to the tax year; or

                (2) a residential property in the first tax year that is valued for property taxation purposes.

          [H.] K. As used in this section, "disabled" means a person who has been determined to be blind or permanently disabled with medical improvement not expected pursuant to 42 USCA 421 for purposes of the federal Social Security Act or is determined to have a permanent total disability pursuant to the Workers' Compensation Act."

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