0001|                         HOUSE BILL 605
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0002|     42ND LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION,
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0003|     1996
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0004|                         INTRODUCED BY
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0005|                       PATSY G. TRUJILLO
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0006|     
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0007|                                
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0008|     
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0009|     
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0010|     
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0011|                             AN ACT
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0012|     RELATING TO PROPERTY TAXATION; AUTHORIZING COUNTIES TO PROVIDE A
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0013|     PROPERTY TAX CREDIT FOR LOW-INCOME TAXPAYERS; PROVIDING A
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0014|     PENALTY; AMENDING AND ENACTING SECTIONS OF THE PROPERTY TAX
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0015|     CODE.
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0016|     
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0017|     BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0018|       Section l.  A new section of the Property Tax Code is
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0019|     enacted to read:
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0020|       "[<u>NEW MATERIAL</u>]  PROPERTY TAX CREDIT--LOW-INCOME 
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0021|     TAXPAYERS.--
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0022|            A.  A board of county commissioners may adopt an
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0023|     ordinance providing a credit against the property tax due for
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0024|     low-income taxpayers in accordance with the provisions of this
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0025|     section.  The tax credit may be referred to as the "local
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0001|     property tax credit" and may be imposed for any number of
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0002|     property tax years.
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0003|            B.  The tax credit may be claimed and allowed only
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0004|     against the property tax due on residential property that is the
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0005|     principal place of residence of a claimant whose household
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0006|     modified gross income does not exceed fifty thousand dollars
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0007|     ($50,000).  Only one tax credit may be claimed for each eligible
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0008|     residential property. 
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0009|            C.  The credit that may be provided shall be an
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0010|     amount equal to the amount of the taxpayer's property tax due
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0011|     for the year that exceeds the amount shown as the taxpayer's
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0012|     property tax limit in the following table or any similar table
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0013|     adopted by the board:
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0014|     <u>Modified Gross Income (MGI)</u>        <u>Property Tax Limit</u>
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0015|     Not over $10,000                1 percent of MGI
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0016|     Over $10,000, but not over $20,000   $100 plus 2 percent of
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0017|                                     excess MGI over $10,000
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0018|     Over $20,000, but not over $30,000   $300 plus 3 percent of
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0019|                                     excess MGI over $20,000
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0020|     Over $30,000, but not over $40,000   $600 plus 4 percent of
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0021|                                     excess MGI over $30,000
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0022|     Over $40,000, but not over $50,000   $1,000 plus 5 percent of                               excess MGI over $40,000
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0023|     If the board provides a tax credit based on a different table,
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0024|     the board shall assure that the property tax limit is a
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0025|     graduated percentage of at least several modified gross income
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0001|     categories.  The board also may cap the amount of the tax credit
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0002|     that may be allowed a taxpayer.
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0003|            D.  Upon adoption of an ordinance providing a local
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0004|     property tax credit, the board shall create a "local property
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0005|     tax credit fund" that is a separate fund in the county treasury
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0006|     pledged solely for the payment of the property tax revenue
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0007|     reduction resulting from the application of the local property
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0008|     tax credit.  Revenue produced by the increase in the county
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0009|     operating rate due to application of the tax rebate adjustment
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0010|     to the county operating rate pursuant to Section 7-37-7.1 NMSA
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0011|     1978 shall be deposited in the fund.  Balances in the fund at
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0012|     the end of any fiscal year shall remain in the fund and shall be
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0013|     used only to replace the property tax revenue reduction
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0014|     resulting from application of the local property tax credit in
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0015|     succeeding tax years.
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0016|            E.  To claim the local property tax credit, the
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0017|     taxpayer shall file with the county assessor by June 1 of the
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0018|     applicable tax year an application form that includes such
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0019|     taxpayer, household income and other information as the board,
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0020|     in consultation with the department, determines necessary for
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0021|     provision and administration of the credit.  Forms and
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0022|     application instructions shall be enclosed in the property
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0023|     valuation notices mailed to taxpayers pursuant to Section 
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0024|     7-38-20 NMSA 1978 and shall also be available in appropriate
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0025|     county offices.  
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0001|            F.  Upon receipt of applications claiming the local
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0002|     property tax credit, the assessor shall estimate the amount of
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0003|     the local property tax credit to be allowed for the tax year. 
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0004|     In certifying the estimated amount of the property tax credit to
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0005|     be allowed for the property tax year for purposes of the tax
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0006|     rebate adjustment pursuant to Section 7-37-7.1 NMSA 1978, the
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0007|     county assessor for the first tax year in which the credit is
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0008|     allowed may certify an amount up to one hundred twenty-five
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0009|     percent of the estimated amount for cash flow purposes.  
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0010|            G.  To assure the distribution of the full amount of
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0011|     revenue from property tax due to the appropriate governmental
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0012|     units, the county treasurer shall transfer from the local
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0013|     property tax credit fund such amounts as are necessary to make
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0014|     the distributions, but the total of all transfers for any tax
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0015|     shall not exceed the total property tax revenue reduction
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0016|     resulting from application of the local property tax credit in
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0017|     that tax year.  Other available county revenues may be used, if
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0018|     necessary, for cash flow purposes to assure full distribution of
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0019|     property tax revenues to all governmental units at any time
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0020|     during a tax year that there is an insufficient amount in the
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0021|     local property tax credit fund.
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0022|            H.  It is unlawful for the county assessor or any
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0023|     employee of the county assessor or any former employee of the
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0024|     county assessor to reveal any information contained in a
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0025|     taxpayer's local property tax credit application form to any
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0001|     individual other than the assessor, another employee of the
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0002|     assessor or an employee of the department authorized by the
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0003|     county assessor and the director to obtain the information for
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0004|     purposes of audit or enforcement.  Any individual who reveals to
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0005|     another individual any information which he is prohibited from
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0006|     lawfully revealing pursuant to this subsection is guilty of a
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0007|     misdemeanor and upon conviction shall be punished by a fine of
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0008|     not more than one thousand dollars ($1,000) or by imprisonment
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0009|     for a definite period not to exceed three hundred sixty-four
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0010|     days, or both, and shall not be employed by the county for a
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0011|     period of five years after the date of the conviction.
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0012|            I.  As used in this section:
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0013|                 (1)  "board" means the board of county
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0014|     commissioners of a county, including an H class county; and
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0015|                 (2)  "modified gross income" means "modified
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0016|     gross income", as that term is defined in the Income Tax Act,
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0017|     plus all income from those same sources for any other resident
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0018|     owner of the principal place of residence of the taxpayer
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0019|     claiming a local property tax credit."
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0020|       Section 2.  Section 7-37-7.1 NMSA 1978 (being Laws 1979,
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0021|     Chapter 268, Section 1, as amended) is amended to read:
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0022|       "7-37-7.1.  ADDITIONAL LIMITATIONS ON PROPERTY TAX RATES.--
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0023|            A.  Except as provided in Subsections D and E of this
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0024|     section, in setting the general property tax rates for
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0025|     residential and nonresidential property authorized in Subsection
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0001|     B of Section 7-37-7 NMSA 1978, the other rates and impositions
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0002|     authorized in Paragraphs (2) and (3) of Subsection C of Section
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0003|     7-37-7 NMSA 1978, except the portion of the rate authorized in
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0004|     Paragraph (1) of Subsection A of Section 4-48B-12 NMSA 1978 used
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0005|     to meet the requirements of Section 27-10-4 NMSA 1978, and
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0006|     benefit assessments authorized by law to be levied upon net
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0007|     taxable value of property, assessed value or a similar term,
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0008|     neither the department of finance and administration nor any
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0009|     other entity authorized to set or impose a rate or assessment
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0010|     shall set a rate or impose a tax or assessment that will produce
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0011|     revenue from either residential or nonresidential property in a
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0012|     particular governmental unit in excess of the sum of a dollar
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0013|     amount derived by multiplying the appropriate growth control
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0014|     factor by the revenue due from the imposition on residential or
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0015|     nonresidential property, as appropriate, for the prior property
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0016|     tax year in the governmental unit of the rate, imposition or
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0017|     assessment for the specified purpose plus, for the calculation
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0018|     for the rate authorized for county operating purposes by
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0019|     Subsection B of Section 7-37-7 NMSA 1978 with respect to
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0020|     residential property, any applicable tax rebate adjustment.  The
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0021|     calculation described in this subsection shall be separately
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0022|     made for residential and nonresidential property.  Except as
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0023|     provided in Subsections D and E of this section, no tax rate or
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0024|     benefit assessment that will produce revenue from either class
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0025|     of property in a particular governmental unit in excess of the
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0001|     dollar amount allowed by the calculation shall be set or
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0002|     imposed.  The rates imposed pursuant to Sections 7-32-4 and
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0003|     7-34-4 NMSA 1978 shall be the rates for nonresidential property
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0004|     that would have been imposed but for the limitations in this
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0005|     section.  As used in this section, "growth control factor" is a
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0006|     percentage equal to the sum of "percent change I" plus V where:
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0007|                 (1)  V = <u>(base year value + net new value)</u>,    
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0008|                                   base year value
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0009|     expressed as a percentage, but if the percentage calculated is
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0010|     less than one hundred percent, then V shall be set and used as
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0011|     one hundred percent;
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0012|                 (2)  "base year value" means the value for
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0013|     property taxation purposes of all residential or nonresidential
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0014|     property, as appropriate, subject to valuation under the
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0015|     Property Tax Code in the governmental unit for the specified
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0016|     purpose in the prior property tax year;
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0017|                 (3)  "net new value" means the additional value
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0018|     of residential or nonresidential property, as appropriate, for
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0019|     property taxation purposes placed on the property tax schedule
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0020|     in the current year resulting from the elements in Subparagraphs
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0021|     (a) through (d) of this paragraph reduced by the value of
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0022|     residential or nonresidential property, as appropriate, removed
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0023|     from the property tax schedule in the current year and, if
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0024|     applicable, the reductions described in Subparagraph (e) of this
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0025|     paragraph:
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0001|                      (a)  residential or nonresidential
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0002|     property, as appropriate, valued in the current year that was
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0003|     not valued at all in the prior year;
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0004|                      (b)  improvements to existing residential
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0005|     or nonresidential property, as appropriate; 
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0006|                      (c)  additions to residential or
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0007|     nonresidential property, as appropriate, or values that were
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0008|     omitted from previous years' property tax schedules even if part
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0009|     or all of the property was included on the schedule, but no
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0010|     additions of values attributable to valuation maintenance
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0011|     programs or reappraisal programs shall be included;
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0012|                      (d)  additions to nonresidential property
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0013|     due to increases in annual net production values of mineral
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0014|     property valued in accordance with Section 7-36-23 or 7-36-25
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0015|     NMSA 1978 or due to increases in market value of mineral
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0016|     property valued in accordance with Section 7-36-24 NMSA 1978;
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0017|     and
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0018|                      (e)  reductions to nonresidential property
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0019|     due to decreases in annual net production values of mineral
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0020|     property valued in accordance with Section 7-36-23 or 7-36-25
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0021|     NMSA 1978 or due to decreases in market value of mineral
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0022|     property valued in accordance with Section 7-36-24 NMSA 1978;
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0023|     and
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0024|                 (4)  "percent change I" means a percent not in
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0025|     excess of five percent that is derived by dividing the annual
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0001|     implicit price deflator index for state and local government
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0002|     purchases of goods and services, as published in the United
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0003|     States department of commerce monthly publication entitled
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0004|     "survey of current business" or any successor publication, for
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0005|     the calendar year next preceding the prior calendar year into
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0006|     the difference between the prior year's comparable annual index
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0007|     and that next preceding year's annual index if that difference
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0008|     is an increase, and if the difference is a decrease, the
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0009|     "percent change I" is zero.  In the event that the annual
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0010|     implicit price deflator index for state and local government
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0011|     purchases of goods and services is no longer prepared or
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0012|     published by the United States department of commerce, the
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0013|     department shall adopt by regulation the use of any comparable
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0014|     index prepared by any agency of the United States.
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0015|            B.  If, as a result of the application of the
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0016|     limitation imposed under Subsection A of this section, a
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0017|     property tax rate for residential or nonresidential property, as
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0018|     appropriate, authorized in Subsection B of Section 7-37-7 NMSA
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0019|     1978 is reduced below the maximum rate authorized in that
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0020|     subsection, no governmental unit or entity authorized to impose
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0021|     a tax rate under Paragraph (2) of Subsection C of Section 7-37-7
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0022|     NMSA 1978 shall impose any portion of the rate representing the
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0023|     difference between a maximum rate authorized under Subsection B
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0024|     of Section 7-37-7 NMSA 1978 and the reduced rate resulting from
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0025|     the application of the limitation imposed under Subsection A of
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0001|     this section.
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0002|            C.  If the net new values necessary to make the
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0003|     computation required under Subsection A of this section are not
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0004|     available for any governmental unit at the time the calculation
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0005|     must be made, the department of finance and administration shall
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0006|     use a zero amount for net new values when making the computation
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0007|     for the governmental unit.
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0008|            D.  Any part of the maximum tax rate authorized for
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0009|     each governmental unit for residential and nonresidential
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0010|     property by Subsection B of Section 7-37-7 NMSA 1978 that is not
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0011|     imposed for a governmental unit for any property tax year for
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0012|     reasons other than the limitation required under Subsection A of
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0013|     this section may be authorized by the department of finance and
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0014|     administration to be imposed for that governmental unit for
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0015|     residential and nonresidential property for the following tax
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0016|     year subject to the restriction of Subsection D of Section
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0017|     7-38-33 NMSA 1978.
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0018|            E.  If the base year value necessary to make the
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0019|     computation required under Subsection A of this section is not
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0020|     available for any governmental unit at the time the calculation
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0021|     must be made, the department of finance and administration shall
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0022|     set a rate for residential and nonresidential property that will
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0023|     produce in that governmental unit a dollar amount that is not in
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0024|     excess of the property tax revenue due for all property for the
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0025|     prior property tax year for the specified purpose of that rate
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0001|     in that governmental unit.
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0002|            F.  For the purposes of this section:
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0003|                 (1)  "nonresidential property" does not include
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0004|     any property upon which taxes are imposed pursuant to the Oil
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0005|     and Gas Ad Valorem Production Tax Act, the Oil and Gas
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0006|     Production Equipment Ad Valorem Tax Act or the Copper Production
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0007|     Ad Valorem Tax Act; and
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0008|                 (2)  "tax rebate adjustment" means, for those
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0009|     counties that have an ordinance in effect providing <u>either the
</u>    |
<u></u>0010| <u>    local property tax credit pursuant to Section 1 of this 1996 act
</u>    |
<u></u>0011| <u>    or</u> the property tax rebate pursuant to the Income Tax Act for
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0012|     the property tax year and that, <u>in the case of the property tax
</u>    |
<u></u>0013| <u>    rebate</u>, have not imposed for the property tax year <s>[either]</s> a
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0014|     property tax, the revenue from which is pledged for payment of
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0015|     the income tax revenue reduction resulting from the provision of
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0016|     the property tax rebate, <s>[or a property transfer tax]</s> the
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0017|     estimated amount of the property tax rebate <u>or local property
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<u></u>0018| <u>    tax credit</u> to be allowed with respect to the property tax year,
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0019|     and for any other governmental unit or purpose, zero; provided
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0020|     that any estimate of property tax rebate <u>or local property tax
</u>    |
<u></u>0021| <u>    credit</u> to be allowed is subject to review for appropriateness
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0022|     and approval by the department of finance and administration."
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0023|       Section 3.  Section 7-38-35 NMSA 1978 (being Laws 1973,
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0024|     Chapter 258, Section 75, as amended) is amended to read:
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0025|       "7-38-35.  PREPARATION OF PROPERTY TAX SCHEDULE BY
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0001|     ASSESSOR.--
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0002|            A.  After receipt of the rate-setting order and the
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0003|     order imposing the tax, but no later than October 1 of each tax
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0004|     year, the county assessor shall prepare a property tax schedule
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0005|     for all property subject to property taxation in the county. 
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0006|     This schedule shall be in a form and contain the information
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0007|     required by regulations of the <s>[division]</s> <u>department</u> and
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0008|     shall contain at least the following information:
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0009|                 (1)  the description of the property taxed and,
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0010|     if the property is personal property, its location;
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0011|                 (2)  the property owner's name and address and
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0012|     the name and address of any person other than the owner to whom
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0013|     the tax bill is to be sent;
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0014|                 (3)  the classification of the property;
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0015|                 (4)  the value of the property determined for
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0016|     property taxation purposes;
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0017|                 (5)  the tax ratio;
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0018|                 (6)  the taxable value of the property;
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0019|                 (7)  the amount of any exemption allowed and a
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0020|     statement of the net taxable value of the property after
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0021|     deducting the exemption;
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0022|                 (8)  the allocations of net taxable value to the
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0023|     governmental units;
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0024|                 (9)  the tax rate in dollars per thousand of net
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0025|     taxable value for all taxes imposed on the property;
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0001|                 (10)  the amount of taxes due on the described
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0002|     property; <s>[and]</s>
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0003|                 (11)  the amount of any penalties and interest
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0004|     already imposed and due on the described property; <u>and</u>
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0005|                 <u>(12)  the amount of the local property tax
</u>    |
<u></u>0006| <u>    credit, if any, allowed by the board of county commissioners to
</u>    |
<u></u>0007| <u>    be applied against the taxes due on the described property</u>.
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0008|            B.  The property tax schedule is a public record and
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0009|     a part of the valuation records."
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0010|       Section 4.  APPLICABILITY.--The provisions of this act
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0011|     apply to the 1997 and subsequent property tax years.
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0012|                              
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