SENATE FINANCE COMMITTEE SUBSTITUTE FOR
SENATE CORPORATIONS AND TRANSPORTATION COMMITTEE SUBSTITUTE FOR
SENATE BILL 350
53rd legislature - STATE OF NEW MEXICO - first session, 2017
AN ACT
RELATING TO PROPERTY TAX; CREATING A SPECIAL METHOD OF VALUATION FOR UNIMPROVED LAND; PROVIDING FOR A RECAPTURE OF TAX SAVINGS IF THE USE OF THE LAND IS CHANGED; ALLOWING A COUNTY ASSESSOR TO CHANGE A PROPERTY TAX SCHEDULE IF THERE WAS A CHANGE OF USE OF THE LAND; REQUIRING DISCLOSURE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. A new section of the Property Tax Code, Section 7-36-20.1 NMSA 1978, is enacted to read:
"7-36-20.1. [NEW MATERIAL] SPECIAL METHOD OF VALUATION--CONSERVATION OF UNIMPROVED LAND--RECAPTURE.--
A. The value of unimproved land used primarily to conserve the unimproved land pursuant to a qualified conservation management plan shall be valued at twenty-five percent of the current and correct value. Land used for a residential or commercial purpose is not eligible for valuation pursuant to this section.
B. Evidence of a qualified conservation management plan for the tax year preceding the year for which determination is made of eligibility for the land to be valued pursuant to this section creates a presumption that the land is used primarily to conserve the unimproved land during the tax year in which the determination is made. Improvements on the land, other than those specified in Subsection C of Section 7-36-15 NMSA 1978 or for purposes other than for agricultural or conservation management purposes, create a presumption that the land is not used primarily to conserve the unimproved land.
C. The department shall promulgate rules for determining whether land is used primarily to conserve the unimproved land pursuant to a qualified conservation management plan. The rules shall:
(1) ensure that management practices are appropriate to conserve and maintain the unimproved land; and
(2) require that qualified conservation management plans shall:
(a) at a minimum, maintain or increase the productivity of the land, rangeland, watershed and forest health, wildlife habitat or soil and water conservation; and
(b) include an annual implementation plan and progress report.
D. All improvements on land, other than those specified in Subsection C of Section 7-36-15 NMSA 1978, shall be valued separately for property taxation purposes, and the value of the improvements shall be added to the value of the land determined pursuant to this section.
E. The special method of valuation pursuant to this section shall be claimed in order to be allowed. The owner of the land shall make application to the county assessor in a tax year in which the valuation method of this section is first claimed to be applicable to the land or in a tax year immediately subsequent to a tax year in which the land was not valued under this section. Application shall be made under oath and shall be in a form, and contain the information, required by department rules. The application shall be made no later than thirty days after the date of mailing by the assessor of the notice of valuation. Once land is valued under this section, an application shall be resubmitted and claimed:
(1) in a tax year immediately subsequent to a tax year in which a change of use or a change in ownership occurs; or
(2) five years after the tax year in which the last application was made and granted.
F. The owner of land valued pursuant to this section shall report to the county assessor whenever a change of ownership or the use of the land changes so that it is no longer being used primarily to conserve the unimproved land pursuant to a qualified conservation management plan. The report shall be made by the last day of February of the tax year immediately following the year in which the change of ownership or change in the use of the land occurs.
G. Any person who is required to make a report under the provisions of Subsection F of this section and who fails to do so is personally liable for a civil penalty in an amount equal to the greater of twenty-five dollars ($25.00) or twenty-five percent of the difference between the property taxes ultimately determined to be due and the property taxes originally paid for the tax years for which the person failed to make the required report.
H. An owner of land valued pursuant to this section who divides the land or builds physical improvements on the land for purposes other than for agricultural use or to conserve the unimproved land, and who is the owner of record at the time the division occurs or the improvements are made, shall be personally liable for the difference between the taxes assessed against the land and the taxes that would otherwise have been assessed against the land at the current and correct value for each of the number of years the land was valued pursuant to this section, up to a maximum of the five most recent years, to be collected and distributed in the same manner as other ad valorem levies.
I. As used in this section, "qualified conservation management plan" means a land management plan approved by the soil and water conservation commission that includes conservation and management practices that are appropriate to conserve and maintain the unimproved land; to maintain or increase the productivity of the land; and to support rangeland, watershed and forest health, wildlife habitat or soil and water conservation."
SECTION 2. Section 7-38-44.1 NMSA 1978 (being Laws 2013, Chapter 119, Section 1) is amended to read:
"7-38-44.1. SPECIAL PROCEDURES FOR ADMINISTRATION OF TAXES ON REAL PROPERTY DIVIDED OR COMBINED.--
A. For real property, subject to valuation for property taxation purposes in a taxable year, that is divided or combined, a county shall proceed to determine the taxes due on the property by using the prior year's tax rate, if the current tax rates have not been set, and the prior year's value, if the current year value has not been set, and proceed to immediately collect the taxes, penalties, interest and fees through the taxable year in which the property is divided or combined.
B. For real property, subject to valuation for property taxation purposes pursuant to Section 7-36-20.1 NMSA 1978 in a taxable year, that is divided, a county shall proceed to determine the taxes due on the property, if any, pursuant to Subsection H of Section 7-36-20.1 NMSA 1978 and proceed to immediately collect the taxes, penalties, interest and fees through the taxable year in which the property is divided.
[B.] C. A taxpayer shall pay the taxes, penalties, interest and fees due on real property divided or combined through the taxable year in which the property is divided or combined prior to filing a plat."
SECTION 3. Section 7-38-77 NMSA 1978 (being Laws 1973, Chapter 258, Section 117, as amended) is amended to read:
"7-38-77. AUTHORITY TO MAKE CHANGES IN PROPERTY TAX SCHEDULE AFTER ITS DELIVERY TO THE COUNTY TREASURER.--
A. After delivery of the property tax schedule to the county treasurer, the amounts shown on the schedule as taxes due and other information on the schedule shall not be changed except:
(1) by the county treasurer to correct obvious errors in the mathematical computation of taxes;
(2) by the county treasurer to correct obvious errors by the county assessor in:
(a) the name or address of the property owner or other persons shown on the schedule;
(b) the description of the property subject to property taxation, even if the correction results in a change in the amount shown on the schedule as taxes due;
(c) the data entry of the value, classification, allocation of value and limitation on increases in value pursuant to Sections 7-36-21.2 and 7-36-21.3 NMSA 1978 of property subject to property taxation by the county assessor; or
(d) the application of eligible, documented and qualified exemptions;
(3) by the county treasurer to cancel multiple valuations for property taxation purposes of the same property in a single tax year, but only if:
(a) a taxpayer presents tax receipts showing the payment of taxes by the taxpayer for any year in which multiple valuations for property taxation purposes are claimed to have been made;
(b) a taxpayer presents evidence of ownership of the property, satisfactory to the treasurer, as of January 1 of the year in which multiple valuations for property taxation purposes are claimed to have been made; and
(c) there is no dispute concerning ownership of the property called to the attention of the treasurer and the treasurer has no actual knowledge of any dispute concerning ownership of the property;
(4) by the county treasurer, to correct the tax schedule so that it no longer contains personal property that is deemed to be unlocatable, unidentifiable or uncollectable, after thorough research with verification by the county assessor or appraiser, with notification to the department and the county clerk;
(5) as a result of a protest, including a claim for refund, in accordance with the Property Tax Code, of values, classification, allocations of values determined for property taxation purposes or a denial of a claim for an exemption;
(6) by the department or the order of a court as a result of any proceeding by the department to collect delinquent property taxes under the Property Tax Code;
(7) by a court order entered in an action commenced by a property owner [under] pursuant to Section 7-38-78 NMSA 1978;
(8) by the department as authorized [under] pursuant to Section 7-38-79 NMSA 1978;
(9) by the department of finance and administration as authorized [under] pursuant to Section 7-38-77.1 NMSA 1978; [or]
(10) by the county assessor due to a change of use of land that had been valued pursuant to Section 7-36-20.1 NMSA 1978; or
[(10)] (11) as specifically otherwise authorized in the Property Tax Code.
B. As used in this section, "obvious errors" does not include the method used to determine the valuation for, or a difference of opinion in the value of, the property subject to property taxation."
SECTION 4. Section 47-13-4 NMSA 1978 (being Laws 2009, Chapter 165, Section 3) is amended to read:
"47-13-4. [FINDING] DISCLOSURE OF INFORMATION REQUIRED IN CERTAIN REAL ESTATE TRANSACTIONS.--
[A. The legislature finds that property tax levied on a residential property for the current year can be a misleading guide to property tax levies in the years following the sale of that property and that a prospective buyer needs information regarding the property tax obligation in the year following the property's sale to properly judge the affordability of a contemplated purchase.
B.] A. Prior to accepting an offer to purchase, the property seller or the seller's broker shall:
(1) request from the county assessor the estimated amount of property tax levy with respect to the property and shall specify the listed price as the value of the property to be used in the estimate; and
(2) provide a copy of the assessor's response pursuant to Subsection D of this section in writing to the prospective buyer or the buyer's broker.
B. Prior to accepting an offer to purchase land valued pursuant to Section 7-36-20.1 NMSA 1978, the property seller or the seller's broker shall:
(1) request from the county assessor the estimated amount of property tax levy, with respect to the difference between the taxes assessed against the land and the taxes that would otherwise have been assessed against the land for current and correct value, for each of the number of years the land was valued pursuant to Section 7-36-20.1 NMSA 1978; and
(2) provide a copy of the assessor's response pursuant to Subsection D of this section in writing to the prospective buyer or the buyer's broker.
C. A buyer's broker shall provide to the prospective buyer the county assessor's estimated amount of property tax levy immediately upon receiving it from the property seller or the seller's broker. The prospective buyer shall acknowledge in writing the receipt of the estimated amount of property tax levy.
D. Upon request, a county assessor shall furnish in writing, pursuant to the provisions of Subsection E of this section, an estimated amount of property tax levy with respect to a residential property in the county, calculated at a property value specified by the requestor. The request shall be complied with by the close of business of the business day following the day the request is received. A county may satisfy this obligation through an internet site or other automated format that allows a user to print the requested estimated amount of property tax levy. A document associated with the request or the response is not a public record or a valuation record. County assessors shall not use information provided with a request, including the specified value, to assess the valuation of the property. Neither the county nor any jurisdiction levying a tax against residential property in the county is bound in any way by the estimate given.
E. A county assessor's estimated amount of property tax levy with respect to a residential property in the county shall contain the following:
(1) the actual amount of property tax levied for the property for the current calendar year if the tax rates for the current year have been imposed in accordance with Section 7-38-34 NMSA 1978 for the county in which the property is located or, in all other cases, the amount of property tax levied with respect to the property for the prior calendar year;
(2) the estimated amount of property tax levy, as calculated by the county assessor, for the property for the calendar year following the year in which the transaction takes place; and
(3) a disclaimer substantially similar to the following:
"The estimated amount of property tax levy is calculated using the stated price and estimates of the applicable tax rates. The county assessor is required by law to value the property at its "current and correct" value, which may differ from the listed price. Further, the estimated tax rates may be higher or lower than those that will actually be imposed. Accordingly, the actual tax levy may be higher or lower than the estimated amount. New Mexico law requires your real estate broker or agent to provide you an estimate of the property tax levy on the property on which you have submitted or intend to submit an offer to purchase. All real estate brokers and agents who have complied with these disclosure requirements shall be immune from suit and liability arising from suit relating to the estimated amount of property tax levy.".
F. A prospective buyer may waive the disclosure requirements of this section by signing a written document prior to the time the offer to purchase is to be made in which the buyer acknowledges that the required estimated amount of property tax levy is not readily available and waives disclosure of the estimated amount of property tax levy.
G. All property sellers and real estate brokers and agents who have complied with the provisions of this section shall be immune from suit and liability arising from or relating to the estimated amount of property tax levy.
H. The New Mexico real estate commission shall biannually inform all New Mexico real estate licensees of the statutory requirement for disclosure of the estimated amount of property tax levy to prospective residential property purchasers."
SECTION 5. APPLICABILITY.--The provisions of this act apply to the 2019 and subsequent property tax years.
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