A. Except as provided in Subsections D and E of this section, in setting the general property tax rates for residential and nonresidential property authorized in Subsection B of Section 7-37-7 NMSA 1978, the other rates and impositions authorized in Paragraphs (2) and (3) of Subsection C of Section 7-37-7 NMSA 1978, except the portion of the rate authorized in Paragraph (1) of Subsection A of Section 4-48B-12 NMSA 1978 used to meet the requirements of Section 27-10-4 NMSA 1978, and benefit assessments authorized by law to be levied upon net taxable value of property, assessed value or a similar term, neither the department of finance and administration nor any other entity authorized to set or impose a rate or assessment shall set a rate or impose a tax or assessment that will produce revenue from either residential or nonresidential property in a particular governmental unit in excess of the sum of a dollar amount derived by multiplying the appropriate growth control factor by the revenue due from the imposition on residential or nonresidential property, as appropriate, for the prior property tax year in the governmental unit of the rate, imposition or assessment for the specified purpose plus, for the calculation for the rate authorized for county operating purposes by Subsection B of Section 7-37-7 NMSA 1978 with respect to residential property, any applicable tax rebate adjustment. The calculation described in this subsection shall be separately made for residential and nonresidential property. Except as provided in Subsections D and E of this section, no tax rate or benefit assessment that will produce revenue from either class of property in a particular governmental unit in excess of the dollar amount allowed by the calculation shall be set or imposed. The rates imposed pursuant to Sections 7-32-4 and 7-34-4 NMSA 1978 shall be the rates for nonresidential property that would have been imposed but for the limitations in this section. As used in this section, “growth control factor” is a percentage equal to the sum of “percent change I” plus V where:
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(1) |
V |
= |
(base year value + net new value), |
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base year value |
expressed as a percentage, but if the percentage calculated is less than one hundred percent, then V shall be set and used as one hundred percent;
(2) “base year value” means the value for property taxation purposes of all residential or nonresidential property, as appropriate, subject to valuation under the Property Tax Code in the governmental unit for the specified purpose in the prior property tax year;
(3) “net new value” means the additional value of residential or nonresidential property, as appropriate, for property taxation purposes placed on the property tax schedule in the current year resulting from the elements in Subparagraphs (a) through (d) of this paragraph reduced by the value of residential or nonresidential property, as appropriate, removed from the property tax schedule in the current year and, if applicable, the reductions described in Subparagraph (e) of this paragraph:
(a) residential or nonresidential property, as appropriate, valued in the current year that was not valued at all in the prior year;
(b) improvements to existing residential or nonresidential property, as appropriate;
(c) additions to residential or nonresidential property, as appropriate, or values that were omitted from previous years’ property tax schedules even if part or all of the property was included on the schedule, but no additions of values attributable to valuation maintenance programs or reappraisal programs shall be included;
(d) additions to nonresidential property due to increases in annual net production values of mineral property valued in accordance with Section 7-36-23 or 7-36-25 NMSA 1978 or due to increases in market value of mineral property valued in accordance with Section 7-36-24 NMSA 1978; and
(e) reductions to nonresidential property due to decreases in annual net production values of mineral property valued in accordance with Section 7-36-23 or 7-36-25 NMSA 1978 or due to decreases in market value of mineral property valued in accordance with Section 7-36-24 NMSA 1978; and
(4) “percent change I” means a percent not in excess of five percent that is derived by dividing the annual implicit price deflator index for state and local government purchases of goods and services, as published in the United States department of commerce monthly publication entitled “survey of current business” or any successor publication, for the calendar year next preceding the prior calendar year into the difference between the prior year’s comparable annual index and that next preceding year’s annual index if that difference is an increase, and if the difference is a decrease, the “percent change I” is zero. In the event that the annual implicit price deflator index for state and local government purchases of goods and services is no longer prepared or published by the United States department of commerce, the department shall adopt by regulation the use of any comparable index prepared by any agency of the United States.
B. If, as a result of the application of the limitation imposed under Subsection A of this section, a property tax rate for residential or nonresidential property, as appropriate, authorized in Subsection B of Section 7-37-7 NMSA 1978 is reduced below the maximum rate authorized in that subsection, no governmental unit or entity authorized to impose a tax rate under Paragraph (2) of Subsection C of Section 7-37-7 NMSA 1978 shall impose any portion of the rate representing the difference between a maximum rate authorized under Subsection B of Section 7-37-7 NMSA 1978 and the reduced rate resulting from the application of the limitation imposed under Subsection A of this section.
C. If the net new values necessary to make the computation required under Subsection A of this section are not available for any governmental unit at the time the calculation must be made, the department of finance and administration shall use a zero amount for net new values when making the computation for the governmental unit.
D. Any part of the maximum tax rate authorized for each governmental unit for residential and nonresidential property by Subsection B of Section 7-37-7 NMSA 1978 that is not imposed for a governmental unit for any property tax year for reasons other than the limitation required under Subsection A of this section may be authorized by the department of finance and administration to be imposed for that governmental unit for residential and nonresidential property for the following tax year subject to the restriction of Subsection D of Section 7-38-33 NMSA 1978.
E. If the base year value necessary to make the computation required under Subsection A of this section is not available for any governmental unit at the time the calculation must be made, the department of finance and administration shall set a rate for residential and nonresidential property that will produce in that governmental unit a dollar amount that is not in excess of the property tax revenue due for all property for the prior property tax year for the specified purpose of that rate in that governmental unit.
F. For the purposes of this section:
(1) “nonresidential property” does not include any property upon which taxes are imposed pursuant to the Oil and Gas Ad Valorem Production Tax Act [Chapter 7, Article 32 NMSA 1978], the Oil and Gas Production Equipment Ad Valorem Tax Act [Chapter 7, Article 34 NMSA 1978] or the Copper Production Ad Valorem Tax Act [Chapter 7, Article 39 NMSA 1978]; and
(2) “tax rebate adjustment” means, for those counties that have an ordinance in effect providing the property tax rebate pursuant to the Income Tax Act [Chapter 7, Article 2 NMSA 1978] for the property tax year and that have not imposed for the property tax year either a property tax, the revenue from which is pledged for payment of the income tax revenue reduction resulting from the provision of the property tax rebate, or a property transfer tax, the estimated amount of the property tax rebate to be allowed with respect to the property tax year, and for any other governmental unit or purpose, zero; provided that any estimate of property tax rebate to be allowed is subject to review for appropriateness and approval by the department of finance and administration.
History: 1978 Comp., § 7-37-7.1, enacted by Laws 1979, ch. 268, § 1; 1981, ch. 37, § 66; 1983, ch. 213, § 23; 1985 (1st S.S.), ch. 12, § 1; 1986, ch. 32, § 8; 1989, ch. 198, § 2; 1990, ch. 125, § 6; 1991, ch. 212, § 17; 1994, ch. 111, § 4.
ANNOTATIONS
The 1994 amendment, effective July 1, 1994, in Subsection A, substituted “27-10-4 NMSA 1978” for “4 of the Statewide Health Care Act,” substituted “either residential or” for “residential and,” added “the sum of” preceding “a dollar amount,” added “appropriate” preceding “growth control factor,” substituted “or nonresidential property, as appropriate” for “and nonresidential property,” added language from “plus, for” to the end of the first sentence, and substituted “made for” for “applied to” in the second sentence; substituted “or nonresidential property, as appropriate” for “and nonresidential property,” in Paragraph A(2), twice in Paragraph A(3), and once each in Subparagraphs A(3)(a), A(3)(b) and A(3)(c); added “to nonresidential property” in Subparagraphs A(3)(d) and A(3)(e); substituted “or nonresidential property, as appropriate” for “and nonresidential property,” in Paragraph B; redesignated language in Subsection F as Paragraph F(1) and added “; and” at the end of the paragraph; and added Paragraph F(2).
The 1991 amendment, effective July 1, 1991, inserted “except the portion of the rate authorized in Paragraph (1) of Subsection A of Section 4-48B-12 NMSA 1978 used to meet the requirements of Section 4 of the Statewide Health Care Act” in the first sentence in Subsection A.
The 1990 amendment, effective March 7, 1990, inserted “or the Copper Production Ad Valorem Tax Act” in Subsection F and made several minor stylistic changes throughout the section.
The 1989 amendment, effective June 16, 1989, in Subsection A substituted “the rates for nonresidential property” for “those” in the fourth sentence of the introductory paragraph, rewrote the former fifth and sixth sentences of the introductory paragraph so as to constitute the fifth sentence and Paragraph (1), redesignated former Paragraphs (1) through (3) as Paragraphs (2) through (4), in Paragraph (3) inserted “if applicable, the reductions described in” in the introductory paragraph, and in Paragraph (4) substituted “implicit price deflator” for “general business indicator” in the first and second sentences and substituted “department” for “division” in the second sentence; twice substituted “impose” for “levy” in Subsection B; and added all of the language of Subsection D beginning with “subject”.
Application to 1979 tax year not unconstitutionally retroactive. — Application of this section, which became law on April 4, 1979, to the 1979 tax year, when notice of taxes due and payable were required to be mailed by April 1, 1979, is not unconstitutionally retroactive. Hansman v. Bernalillo Cnty. Assessor, 1980-NMCA-088, 95 N.M. 697, 625 P.2d 1214.
Comparative sales of nonresidential properties not basis for valuation. — This section precludes valuation of residential property for tax purposes based on comparative sales of nonresidential properties. Landmark, Ltd. v. Bernalillo Cnty. Assessor, 1985-NMCA-032, 103 N.M. 65, 702 P.2d 1010 (decided under former 7-36-21.1 NMSA 1978).