HOUSE BILL 332
54th legislature - STATE OF NEW MEXICO - first session, 2019
INTRODUCED BY
Roberto "Bobby” J. Gonzales and Jim R. Trujillo and Susan K. Herrera and Carlos R. Cisneros and Peter Wirth
AN ACT
RELATING TO PROPERTY TAX; ADDING A NEW USE OF LAND ELIGIBLE FOR A SPECIAL METHOD OF VALUATION FOR LAND USED PRIMARILY FOR AGRICULTURAL PURPOSES; CREATING A SPECIAL METHOD OF VALUATION FOR UNIMPROVED LAND.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 7-36-20 NMSA 1978 (being Laws 1973, Chapter 258, Section 21, as amended) is amended to read:
"7-36-20. SPECIAL METHOD OF VALUATION--LAND USED PRIMARILY FOR AGRICULTURAL PURPOSES.--
A. The value of land used primarily for agricultural purposes shall be determined on the basis of the land's capacity to produce agricultural products. Evidence of bona fide primary agricultural use of land for the tax year preceding the year for which determination is made of eligibility for the land to be valued under this section creates a presumption that the land is used primarily for agricultural purposes during the tax year in which the determination is made. If the land was valued under this section in one or more of the three tax years preceding the year in which the determination is made and the use of the land has not changed since the most recent valuation under this section, a presumption is created that the land continues to be entitled to that valuation.
[B. For the purpose of this section:
(1) "agricultural products" means plants, crops, trees, forest products, orchard crops, livestock, poultry, captive deer or elk, or fish; and
(2) "agricultural use" means the:
(a) use of land for the production of agricultural products;
(b) use of land that meets the requirements for payment or other compensation pursuant to a soil conservation program under an agreement with an agency of the federal government;
(c) resting of land to maintain its capacity to produce agricultural products; or
(d) resting of land as the direct result of at least moderate drought conditions as designated by the United States department of agriculture, if the drought conditions occurred in the county within which the land is located for at least eight consecutive weeks during the previous tax year; provided that the land was used in the tax year immediately preceding the previous tax year primarily for a purpose identified pursuant to this paragraph.
C.] B. The department shall adopt rules for determining whether land is used primarily for agricultural purposes. The rules shall provide that the use of land for the lawful taking of game shall not be considered in determining whether land is used primarily for agricultural purposes.
[D.] C. The department shall adopt rules for determining the value of land used primarily for agricultural purposes. The rules shall:
(1) specify procedures to use in determining the capacity of land to produce agricultural products and the derivation of value of the land based upon its production capacity;
(2) establish carrying capacity as the measurement of the production capacity of land used for grazing purposes, develop a system of determining carrying capacity through the use of an animal unit concept and establish carrying capacities for the land in the state classified as grazing land;
(3) provide that land the bona fide and primary use of which is the production of captive deer or elk shall be valued as grazing land and that captive deer shall be valued and taxed as sheep and captive elk shall be valued and taxed as cattle;
(4) provide for the consideration of determinations of any other governmental agency concerning the capacity of the same or similar lands to produce agricultural products;
(5) [assure] ensure that land determined under the rules to have the same or similar production capacity shall be valued uniformly throughout the state; and
(6) provide for the periodic review by the department of determined production capacities and capitalization rates used for determining annually the value of land used primarily for agricultural purposes.
D. The energy, minerals and natural resources department shall promulgate rules specifying the form and content of a management plan sufficient to value land described in Subparagraph (e) of Paragraph (2) of Subsection J of this section. The rules shall require a description of the land and specify the conservation and management practices that are appropriate to preserve and maintain unimproved land in the state.
E. To be eligible for land described in Subparagraph (e) of Paragraph (2) of Subsection J of this section to be valued pursuant to this section, the management plan developed by the landowner shall be approved by the energy, minerals and natural resources department every ten years.
[E.] F. All improvements, other than those specified in Section 7-36-15 NMSA 1978, on land used primarily for agricultural purposes shall be valued separately for property taxation purposes, and the value of these improvements shall be added to the value of the land determined under this section.
[F.] G. 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, shall be in a form and contain the information required by taxation and revenue department rules and shall be made no later than thirty days after the date of mailing by the county assessor of the notice of valuation. Once land is valued under this section, application need not be made in subsequent tax years as long as there is no change in the use of the land.
[G.] H. The owner of land valued under this section shall report to the county assessor whenever the use of the land changes so that it is no longer being used primarily for agricultural purposes. This report shall be made on a form prescribed by taxation and revenue department rules and shall be made by the last day of February of the tax year immediately following the year in which the change in the use of the land occurs.
[H.] I. Any person who is required to make a report under the provisions of Subsection [G] H 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.
J. As used in this section:
(1) "agricultural products" means plants, crops, trees, forest products, orchard crops, livestock, poultry, captive deer or elk or fish; and
(2) "agricultural use" means the:
(a) use of land for the production of agricultural products;
(b) use of land that meets the requirements for payment or other compensation pursuant to a soil conservation program under an agreement with an agency of the federal government;
(c) resting of land to maintain its capacity to produce agricultural products;
(d) resting of land as the direct result of at least moderate drought conditions as designated by the United States department of agriculture, if the drought conditions occurred in the county within which the land is located for at least eight consecutive weeks during the previous tax year; provided that the land was used in the tax year immediately preceding the previous tax year primarily for a purpose identified pursuant to this paragraph; or
(e) the use of land that is in compliance with a management plan developed by the landowner and approved by the energy, minerals and natural resources department that will achieve agriculture and natural resource management priorities identified by that department, including: 1) forest management practices that reduce risks to timber resources and agricultural water supplies; 2) restoration of soil health and agricultural productivity; 3) water resource conservation; 4) protection of wildlife habitat; and 5) protection of sensitive lands, including erosive soils, wetlands and riparian areas."
SECTION 2. 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 qualified guidelines shall be valued at twenty-five percent of the current and correct value. Eligibility for the method of valuation provided by this section is limited to unimproved land that had been valued pursuant to Section 7-36-20 NMSA 1978 in the immediately preceding five property tax years but is no longer eligible to be valued pursuant to that section and is unimproved land that is:
(1) greater than ten acres but no more than one hundred sixty acres; or
(2) ten acres or less with a water right for agricultural purposes appurtenant to the land.
B. Improvements on 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. Land used for a residential or commercial purpose is not eligible for valuation pursuant to this section.
C. The taxation and revenue department shall, in consultation with the energy, minerals and natural resources department, promulgate rules for determining whether land is used primarily to conserve the unimproved land pursuant to qualified guidelines. The rules shall:
(1) ensure that management practices are appropriate to conserve and maintain the unimproved land; and
(2) require that the guidelines shall, at a minimum, maintain or increase the productivity of the land, rangeland, watershed and forest health, wildlife habitat or soil and water conservation.
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 taxation and revenue department rules. The application shall be made no later than thirty days after the date of mailing by the county 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 qualified guidelines. 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. As used in this section, "qualified guidelines" means guidelines for 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 3. APPLICABILITY.--The provisions of this act apply to the 2020 and subsequent property tax years.
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