0001| AN ACT | 0002| RELATING TO PROPERTY TAXATION; IMPOSING A LIMITATION ON THE INCREASE IN | 0003| VALUATION OF RESIDENTIAL PROPERTY FOR PROPERTY TAXATION PURPOSES UNDER | 0004| CERTAIN CIRCUMSTANCES; PROVIDING A METHOD FOR ADJUSTING CERTAIN PROPERTY | 0005| TAX RATES. | 0006| | 0007| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0008| Section 1. A new section of the Property Tax Code, Section | 0009| 7-36-21.2 NMSA 1978, is enacted to read: | 0010| "7-36-21.2. LIMITATION ON VALUATION INCREASES FOR RESIDENTIAL | 0011| PROPERTY.-- | 0012| A. As used in this section: | 0013| (1) "change of ownership" means a transfer to a | 0014| transferee by a transferor of all or any part of the transferor's legal | 0015| or equitable ownership interest in residential property except for a | 0016| transfer: | 0017| (a) to a trustee for the beneficial use of the | 0018| spouse of the transferor or the surviving spouse of a deceased | 0019| transferor; | 0020| (b) to the spouse of the transferor that takes | 0021| effect upon the death of the transferor; | 0022| (c) that creates, transfers or terminates, solely | 0023| between spouses, any co-owner's interest; | 0024| (d) to a child of the transferor; | 0025| (e) that confirms or corrects a previous transfer | 0001| made by a document that was recorded in the real estate records of the | 0002| county in which the real property is located; | 0003| (f) for the purpose of quieting the title to real | 0004| property or resolving a disputed location of a real property boundary; | 0005| (g) to a revocable trust by the transferor with | 0006| the transferor, the transferor's spouse or a child of the transferor as | 0007| beneficiary; or | 0008| (h) from a revocable trust back to the settlor or | 0009| trustor or to the beneficiaries of the trust; and | 0010| (2) "percent change I" means a percent not to exceed | 0011| five percent that is derived by dividing the annual implicit price | 0012| deflator index for state and local government purchases of goods and | 0013| services, as published in the United States department of commerce | 0014| monthly publication entitled "Survey of Current Business" or any | 0015| successor publication, for the calendar year next preceding the prior | 0016| calendar year into the difference between the prior year's comparable | 0017| annual index and that next preceding year's annual index. | 0018| B. The limitation on valuation increases for residential | 0019| property in this section applies to any county in which there is in | 0020| effect for the tax year an ordinance enacted by the board of county | 0021| commissioners directing that the limitation of this section be applied | 0022| to residential property in the county. | 0023| C. The limitation on increases in valuation established for | 0024| residential property pursuant to this section shall not apply to a | 0025| specific residential property for: | 0001| (1) the tax year immediately following the year in | 0002| which a change of ownership of that property occurs; or | 0003| (2) either of the first two tax years in which the | 0004| limitation of this section is applied to that property if the value of | 0005| the property is increased in that year by the county assessor to achieve | 0006| compliance with the requirements of Section 7-36-16 NMSA 1978. | 0007| D. Except as provided in Subsection F of this section, the | 0008| value of residential property for property taxation purposes is the | 0009| lesser of: | 0010| (1) the value of the property for property taxation | 0011| purposes as determined pursuant to the general valuation provisions | 0012| applicable to residential property in the Property Tax Code; or | 0013| (2) the value determined by adding to the value of the | 0014| property for property taxation purposes used in the immediately | 0015| preceding tax year: | 0016| (a) an amount equal to the value of the property | 0017| for property taxation purposes in the immediately preceding tax year | 0018| multiplied by percent change I, if that change is an increase; and | 0019| (b) the value of any physical improvements made | 0020| to the property during the immediately preceding tax year. | 0021| E. The county assessor shall enter on the valuation records | 0022| the valuations determined in accordance with Paragraphs (1) and (2) of | 0023| Subsection D of this section. | 0024| F. The valuation of residential property for the purpose of | 0025| servicing bonded indebtedness of the state or of any local body whose | 0001| taxing jurisdiction includes property in two or more counties, if at | 0002| least one of the counties has in effect for the tax year an ordinance | 0003| authorized by Subsection B of this section, shall be the valuation | 0004| determined in accordance with Paragraph (1) of Subsection D of this | 0005| section." | 0006| Section 2. A new section of the Property Tax Code is enacted to | 0007| read: | 0008| "ADJUSTMENT IN DETERMINING TAX RATES FOR GENERAL OBLIGATION | 0009| INDEBTEDNESS.-- | 0010| A. The adjustment described in this section shall be applied | 0011| in determining the tax rate necessary to service bonded indebtedness of | 0012| the state or of any local body whose taxing jurisdiction includes | 0013| property in two or more counties, if at least one of the counties has in | 0014| effect for the tax year an ordinance authorized by Section 7-36-21.2 | 0015| NMSA 1978. | 0016| B. The department of finance and administration shall | 0017| determine the rate necessary to service the general obligation bonded | 0018| indebtedness for the jurisdiction by disregarding the rate limitation | 0019| provided for in Section | 0020| 7-36-21.2 NMSA 1978 and by using the valuations for property taxation | 0021| purposes as determined pursuant to the general valuation provisions | 0022| applicable to residential property in the Property Tax Code." | 0023| Section 3. APPLICABILITY.--The provisions of this act apply to | 0024| the 1998 and subsequent property tax years. | 0025| | 0001| HB | 0002| 113 | 0003| Page  |