2018 New Mexico Statutes
Chapter 7 - Taxation
Article 36 - Valuation of Property
Section 7-36-22 - Mineral property; definitions and classifications for valuation purposes.

As used in this article, "mineral property" does not include oil and gas property or productive copper mineral property and means:

A. "class one productive mineral property", which means mineral lands, all mineral reserves and interests in minerals in mineral lands and all severed mineral products from mineral lands when the mineral lands are held under private ownership in fee and the property is mined or operated in good faith for its mineral values with a reasonable degree of continuity during the year preceding the tax year in which its value is determined and to an extent in keeping with the market demand and conditions affecting the extraction and disposition of the product;

B. "class one nonproductive mineral property", which means mineral lands, all mineral reserves and interests in minerals in mineral lands and all severed mineral products from mineral lands when the mineral lands are held under private ownership in fee and the property is known to contain minerals in commercially workable quantities of such a character as add present value to the land in addition to its values for other purposes but is not operated so as to fall in the class of class one productive mineral property;

C. "class two mineral property", which means the severed mineral products from mineral lands held by possessory title under the laws of the United States; and

D. "class three mineral property", which means severed mineral products from leasehold or contract mineral rights in mineral lands, the fee of which is vested in the United States or the state.

History: 1953 Comp., § 72-29-11, enacted by Laws 1973, ch. 258, § 23; 1975, ch. 218, § 2; 1990, ch. 125, § 4.

Cross references. — For mines and mining, see Chapter 69 NMSA 1978.

The 1990 amendment, effective March 7, 1990, inserted "for productive copper mineral property" in the introductory language.

Nonseverability. — Laws 1990, ch. 125, § 19 provided that the provisions of the Copper Production Ad Valorem Tax Act [Chapter 7, Article 39 NMSA 1978] and the corresponding amendments made in that act to the Property Tax Code [Articles 35 to 38 of Chapter 7 NMSA 1978] are not severable.

Neither supreme court nor district court may reclassify, revalue or reassess property improperly classified by taxing officials and, consequently, assess at an excessive valuation. Gerner v. State Tax Comm'n, 1963-NMSC-022, 71 N.M. 385, 378 P.2d 619.

Negative mineral property production figure disallowed. — The statutory requirement of allocating the net taxable value of each item of property used in connection with mineral property prevents the use of the negative value for mineral property production to reduce the valuation of property valued under Section 7-36-33 NMSA 1978; therefore, the taxpayer cannot use a negative figure for mineral property production to reduce the positive value of property used in connection with mineral property. U.V. Indus., Inc. v. Property Tax Div. of Taxation & Revenue Dep't, 1979-NMCA-147, 93 N.M. 651, 603 P.2d 1108.

Valuation to be fixed by standards. — To have uniformity and equality in a form of tax, the valuations must be established by some standard; and after valuations are fixed, the taxes based upon such valuations must be levied by a standard. It is only thus that each taxpayer may bear his fair share of the burden of government. Gerner v. State Tax Comm'n, 1963-NMSC-022, 71 N.M. 385, 378 P.2d 619.

Regulation based upon taxpayer's federal tax treatment of property. — Regulation providing that, if a taxpayer attributed development expenditures to a particular piece of property under 26 USCS § 616, the property was rebuttably presumed, for the next 10 years, to contain minerals in such quantities and character so as to classify the property as class one nonproductive mineral property under Subsection B, was a valid regulation in that it was not arbitrary because the taxpayer would have opportunity to present facts to rebut the presumption; in that there was substantial evidence to support the regulation; and in that the regulation was not substantive, since it announced a procedure for classifying the property based upon the taxpayer's treatment of the property for federal tax purposes. Santa Fe Pac.R.R. v. Property Tax Dep't, 1976-NMCA-071, 89 N.M. 446, 553 P.2d 726 (Ct. App. 1976).

Law reviews. — For comment, "Approaches to State Taxation of the Mining Industry," see 10 Nat. Resources J. 156 (1970).

For article, "New Mexico's Effort at Rational Taxation of Hard-Minerals Extraction," see 10 Nat. Resources J. 415 (1970).

For comment, "Taxation of the Uranium Industry: An Economic Proposal," see 7 N.M.L. Rev. 69 (1976-77).