NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

Only the most recent FIR version, excluding attachments, is available on the Intranet. Previously issued FIRs and attachments may be obtained from the LFC office in Suite 101 of the State Capitol Building North.

(Parenthesis ( ) Indicate Revenue Decreases)

Duplicates/Conflicts with/Companion to/Relates to HB 239, HB 366, SB 391

SOURCES OF INFORMATION

Taxation and Revenue Department (TRD)

SUMMARY

Synopsis of Bill

The bill would limit increases in residential property tax values. The bill indicates properties should be valued at "current and correct" in accordance with the Property Tax Code. Beginning property tax year 2001, the increase in the value of a property is limited to the higher of 3 percent of its value in the prior tax year or 6 percent of the value two years prior plus the value of improvements. The limitation would not be imposed on properties being valued for the first time or on those properties in which the use or zoning has changed.

FISCAL IMPLICATIONS

TRD indicates the fiscal impacts are uncertain, but revenues produced under the proposal are expected to be similar to that of the current system. The program would probably restrict growth in total property tax revenues.

OTHER SUBSTANTIVE ISSUES

TRD notes the bill would make it extremely difficult for certain counties to approach current market value, because of the limitation in the bill. For example, Socorro County currently is at an average of 65 percent of market value. TRD recommends allowing substantial reassessments in counties currently assessed at less than market value prior to imposing any limitations on value increases.

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