2021 New Mexico Statutes
Article 36 - Valuation of Property
Section 7-36-24 - Special method of valuation; mineral property and property used in connection with mineral property when the primary production from the mineral property is potash.

A. The provisions of this section apply to valuation of all mineral property and property used in connection with mineral property when the primary production from the mineral property is potash.
B. The value for property taxation purposes of improvements, equipment, materials, supplies and other personal property held or used in connection with all classes of potash mineral property is an amount equal to the market value of all mineral production from the potash mineral property for the prior year, less any royalties paid or due the United States, the state or any Indian tribe, Indian pueblo or Indian who is a ward of the United States. "Improvements" as used in this section includes surface and subsurface structures, but does not include pits, shafts, drifts and other similar artificial changes in the physical condition of the surface or subsurface of the earth produced solely by the removal or rearrangement of earth or minerals for the purpose of exposing or removing ore from a mine.
C. The value for property taxation purposes of the surface value for agricultural or other purposes held in connection with class one productive or nonproductive potash mineral property, when the surface interest is held in the same ownership as the mineral interests, shall be determined under the methods of valuation required by the Property Tax Code.
D. The value for property taxation purposes of class one productive potash mineral property is an amount equal to fifty percent of the market value of all mineral production from the potash mineral property for the prior year.
E. The value for property taxation purposes of class two and class three potash mineral property is an amount equal to fifty percent of the amount derived by deducting from the market value of all mineral production from the potash mineral property for the prior year any royalties paid or due the United States, the state or any Indian tribe, Indian pueblo or Indian who is a ward of the United States.
F. The value for property taxation purposes of class one nonproductive potash mineral property shall be determined under Subsection E of Section 7-36-23 NMSA 1978.
G. If a taxpayer severs potash in one or more governmental units and processes the severed potash in another governmental unit, the value of all interests in minerals shall be allocated to the governmental unit or units in which the potash is severed, and the value of improvements, equipment, materials, supplies and personal property shall be allocated among the governmental units in which the property is located on the basis of the original cost of the property.
H. The department shall adopt regulations specifying procedures to be followed under, and the details of, the method for valuation of potash mineral property specified in this section. The department shall also adopt regulations for the allocation of values of potash mineral property among the governmental units.
History: 1953 Comp., § 72-29-13, enacted by Laws 1973, ch. 258, § 25; 1975, ch. 165, § 5.
Cross references. — For gross value of potash for severance tax, see 7-26-4 NMSA 1978.
For mines and mining, see Chapter 69 NMSA 1978.
Constitutionality. — This section does not violate N.M. Const., art. VIII, § 1 by using production of previous year as base value of mineral property to calculate present year's taxes, nor does it create an irrebutable presumption of value in violation of federal due process clause. Nat'l Potash Co. v. Property Tax Div., 1984-NMCA-055, 101 N.M. 404, 683 P.2d 521.
Fair market value is theoretically what a willing seller would take and a willing buyer offer. Kaiser Steel Corp. v. Property Appraisal Dep't, 1971-NMCA-131, 83 N.M. 251, 490 P.2d 968, cert. denied, 83 N.M. 258, 490 P.2d 975.
Market price as exchange value. — As to the price between a fictional seller and buyer, the market price of a commodity is the exchange value and it is determined by the demand for it in relation to the supply, and is proved, when possible, by actual sales. Kaiser Steel Corp. v. Property Appraisal Dep't, 1971-NMCA-131, 83 N.M. 251, 490 P.2d 968, cert. denied, 83 N.M. 258, 490 P.2d 975.
Essential factors in determining market value are the existence of a demand and the accessibility of a market. Kaiser Steel Corp. v. Prop. Appraisal Dep't, 1971-NMCA-131, 83 N.M. 251, 490 P.2d 968, cert. denied, 83 N.M. 258, 490 P.2d 975.
Valuation of potash fines when no commercial market. — Although without commercial market, potash "fines" were to be valued for tax purposes and market value was exchange value of "fines" between corporation which produced "fines" and subsequent processor of fines. International Minerals & Chem. Corp. v. Property Appraisal Dep't, 1971-NMCA-170, 83 N.M. 402, 492 P.2d 1265, cert. denied, 83 N.M. 395, 492 P.2d 1258.
Burden of proof was on contestant and was both the burden of producing evidence and the burden of persuasion which was, in this case, where the validity of the state's valuation is in issue, not the burden of showing the correct valuation but to show the state's valuation was erroneous. However, an asserted failure in contestant's burden of persuasion does not require that the court uphold the state's valuation when that valuation is not supported by substantial evidence. Kaiser Steel Corp. v. Property Appraisal Dep't, 1971-NMCA-131, 83 N.M. 251, 490 P.2d 968, cert. denied, 83 N.M. 258, 490 P.2d 975.
Finding not supported by evidence inference. — Since the market value of the mine run coal was based on evidence of sales of 4% and 9% of production at $8.50 per ton, this evidence did not support an inference that 96% and 91% of production had a market value of $8.50 per ton absent evidence of a market at that price and, therefore, the finding utilizing a market value of $8.50 per ton for all mine run coal was not supported by substantial evidence. Kaiser Steel Corp. v. Property Appraisal Dep't, 1971-NMCA-131, 83 N.M. 251, 490 P.2d 968, cert. denied, 83 N.M. 258, 490 P.2d 975.