DISABLED VETERAN PROPERTY TAX CHANGES, the official text

HOUSE BILL 285

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

Art De La Cruz and Alan T. Martinez and Debra M. Sariñana

and Harold Pope and Luis M. Terrazas

AN ACT

RELATING TO TAXATION; AMENDING THE DISABLED VETERAN PROPERTY
TAX EXEMPTION; CLARIFYING OCCUPANCY REQUIREMENTS; CLARIFYING
EXEMPTION DETERMINATIONS FOR PROPERTIES WITH MULTIPLE OWNERSHIP
INTERESTS; PROVIDING PROTEST PROCEDURES AND PROCEDURES TO CLAIM
THE EXEMPTION; DECLARING AN EMERGENCY.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. Section 7-37-5.1 NMSA 1978 (being Laws 2000,
Chapter 92, Section 1 and Laws 2000, Chapter 94, Section 1, as
amended) is amended to read:

"7-37-5.1. DISABLED VETERAN EXEMPTION.--

A. As used in this section:

(1) "disabled veteran" means an individual
who:

(a) has been honorably discharged from
membership in the armed forces of the United States or has
received a discharge certificate from a branch of the armed
forces of the United States for civilian service recognized
pursuant to federal law as service in the armed forces of the
United States; and

(b) has been determined pursuant to
federal law to have a permanent service-connected disability;
and

(2) "honorably discharged" means discharged
from the armed forces pursuant to a discharge other than a
dishonorable or bad conduct discharge.

B. The property of a disabled veteran, including
joint or community property of the veteran and the veteran's
spouse, is exempt from property taxation in an amount equal to
the percentage of the veteran's disability as determined by
federal law multiplied by the taxable value of the property
after the amount that may be exempted pursuant to Section
7-37-5 NMSA 1978 is deducted; provided that the disabled
veteran occupies the property [is occupied by the disabled
veteran] continuously as the veteran's principal place of
residence pursuant to regulations issued by the department and
claimed pursuant to Section 7-38-17 NMSA 1978. Property held
in a grantor trust established under Sections 671 through 677
of the Internal Revenue Code of 1986, as those sections may be
amended or renumbered, by a disabled veteran or the veteran's
surviving spouse is also exempt from property taxation if the
property otherwise meets the requirements for exemption in this
subsection or Subsection C of this section.

C. The property of the surviving spouse of a
disabled veteran is exempt from property taxation if:

(1) the surviving spouse and the disabled
veteran were married at the time of the disabled veteran's
death; and

(2) the surviving spouse continues to occupy
the property continuously after the disabled veteran's death as
the spouse's principal place of residence.

D. Upon the transfer of the principal place of
residence of a disabled veteran or of a surviving spouse of a
disabled veteran entitled to and granted a disabled veteran
exemption, the disabled veteran or the surviving spouse may
choose to:

(1) maintain the exemption for that residence
for the remainder of the year, even if the residence is
transferred during the year; or

(2) remove the exemption for that residence
and apply it to the disabled veteran's or the disabled
veteran's surviving spouse's new principal place of residence,
regardless of whether the exemption was applied for and claimed
within thirty days of the mailing of the county assessor's
notice of valuation made pursuant to the provisions of Section
7-38-20 NMSA 1978.

E. The exemption provided by this section may be
referred to as the "disabled veteran exemption".

F. [The disabled veteran exemption shall be applied
only if claimed and allowed in accordance with Section 7-38-17
NMSA 1978 and the rules of the department. The disabled
veteran exemption shall be claimed in proportion to the
taxpayer's ownership interest in the property.] If two or more
disabled veterans qualify for the disabled veteran exemption on
the same property, the exemption shall be determined using the
highest disability percentage among the eligible disabled
veteran owners.

G. The veterans' services department shall assist
the department and the county assessors in determining which
veterans qualify for the disabled veteran exemption."

SECTION 2. Section 7-38-17 NMSA 1978 (being Laws 1973,
Chapter 258, Section 57, as amended) is amended to read:

"7-38-17. CLAIMING EXEMPTIONS--REQUIREMENTS--PENALTIES.--

A. Subject to the requirements of Subsection E of
this section, head-of-family exemptions, veteran exemptions,
disabled veteran exemptions or veterans' organization
exemptions claimed and allowed in a tax year need not be
claimed for subsequent tax years if there is no change in
eligibility for the exemption nor any change in ownership of
the property against which the exemption was claimed. Head-of-family, veteran and veterans' organization exemptions allowable
under this subsection shall be applied automatically by county
assessors in the subsequent tax years.

B. Other exemptions of real property specified
under Section 7-36-7 NMSA 1978 for nongovernmental entities
shall be claimed in order to be allowed. Once such exemptions
are claimed and allowed for a tax year, they need not be
claimed for subsequent tax years if there is no change in
eligibility. Exemptions allowable under this subsection shall
be applied automatically by county assessors in subsequent tax
years.

C. [Except as set forth in Subsection H of this
section] An exemption required to be claimed under this section
shall be applied for no later than thirty days after the
mailing of the county assessor's notices of valuation pursuant
to Section 7-38-20 NMSA 1978 in order for it to be allowed for
that tax year. A property owner claiming an exemption that is
still pending thirty days after the mailing of the county
assessor's notices of valuation may file a protest pursuant to
Section 7-38-21 NMSA 1978. A determination on the pending
claim shall be made by the county assessor within the protest
period.

D. A person who has had an exemption applied to a
tax year and subsequently becomes ineligible for the exemption
because of a change in the person's status or a change in the
ownership of the property against which the exemption was
applied shall notify the county assessor of the loss of
eligibility for the exemption by the last day of February of
the tax year immediately following the year in which loss of
eligibility occurs.

E. Exemptions may be claimed by filing proof of
eligibility for the exemption with the county assessor. The
proof shall be in a form prescribed by regulation of the
department. Procedures for determining eligibility of
claimants for any exemption shall be prescribed by regulation
of the department, and these regulations shall include
provisions for requiring the veterans' services department to
issue certificates of eligibility for veteran and veterans'
organization exemptions in a form and with the information
required by the department. The regulations shall also include
verification procedures to assure that veteran exemptions in
excess of the amount authorized under Section 7-37-5 NMSA 1978
are not allowed as a result of multiple claiming in more than
one county or claiming against more than one property in a
single tax year. For purposes of claiming the disabled veteran
property tax exemption pursuant to Section 7-37-5.1 NMSA 1978:

(1) a disabled veteran shall present to the
assessor a form prescribed by the department certifying that
the veteran is an owner of the property and occupies the
property continuously as the veteran's principal place of
residence. The form shall be accompanied by the disabled
veteran's certificate of eligibility issued by the veterans'
services department and be presented to the county assessor at
the time the disabled veteran exemption is initially claimed
and upon any change in ownership of the property; or

(2) if the disabled veteran has submitted a
veteran's disability claim to the United States department of
veterans affairs and the disabled veteran certificate of
eligibility has not been issued by the veterans' services
department by thirty days after the mailing of the county
assessor's notices of valuation, the veteran may file a protest
and attach the notice of receipt of a disabled veteran's
disability claim as required by 35 U.S.C. 5103.

F. The department shall consult and cooperate with
the veterans' services department in the development, adoption
and promulgation of regulations under Subsection E of this
section. The veterans' services department shall comply with
the promulgated regulations. The veterans' services department
shall collect a fee of five dollars ($5.00) for the issuance of
a duplicate certificate of eligibility to a veteran or to a
veterans' organization.

G. A person who violates the provisions of this
section by intentionally claiming and receiving the benefit of
an exemption to which the person is not entitled or who fails
to comply with the provisions of Subsection D of this section
is guilty of a misdemeanor and shall be punished by a fine of
not more than one thousand dollars ($1,000). A county assessor
or the assessor's employee who knowingly permits a claimant for
an exemption to receive the benefit of an exemption to which
the claimant is not entitled is guilty of a misdemeanor and
shall be punished by a fine of not more than one thousand
dollars ($1,000) and shall also be automatically removed from
office or dismissed from employment upon conviction under this
subsection.

[H. When a disabled veteran or the disabled
veteran's unmarried surviving spouse provides proof of
eligibility pursuant to Subsection E of this section, the
disabled veteran or the disabled veteran's unmarried surviving
spouse shall be allowed the exemption for the tax year;
provided that the exemption shall not be allowed for property
tax due for previous tax years.]"

SECTION 3. Section 7-38-21 NMSA 1978 (being Laws 1973,
Chapter 258, Section 61, as amended) is amended to read:

"7-38-21. PROTESTS--COUNTY-ASSESSED PROPERTY--ELECTION OF
REMEDIES.--

A. A property owner may protest:

(1) the value or classification determined by
the county assessor for the property owner's property for
property taxation purposes;

(2) the allocation of value of the property to
a particular governmental unit [or];

(3) a denial of a claim for an exemption or
[for] a pending claim for an exemption; or

(4) a limitation on increase in value.

B. A property owner may protest pursuant to
Subsection A of this section, either by:

(1) filing a petition with the county assessor
as provided in the Property Tax Code; or

(2) filing a claim for refund after paying the
property owner's taxes as provided in the Property Tax Code.

[B.] C. The initiation of a protest under Paragraph
(1) of Subsection [A] B of this section is an election to
pursue that remedy and is an unconditional and irrevocable
waiver of the right to pursue the remedy provided in Paragraph
(2) of Subsection [A] B of this section.

[C.] D. A property owner may also protest the
application to the property owner's property of any
administrative fee adopted pursuant to Section 7-38-36.1 NMSA
1978 by filing a claim for refund after paying the property
owner's taxes as provided in the Property Tax Code."

SECTION 4. Section 7-38-24 NMSA 1978 (being Laws 1973,
Chapter 258, Section 64, as amended) is amended to read:

"7-38-24. PROTESTING VALUES, CLASSIFICATION, ALLOCATION
OF VALUES AND DENIAL OF EXEMPTION OR LIMITATION ON INCREASE IN
VALUE DETERMINED BY THE COUNTY ASSESSOR.--

A. A property owner may protest the value or
classification determined by the county assessor for [his]
property for property taxation purposes, the assessor's
allocation of value of [his] the property to a particular
governmental unit or denial of a claim for an exemption or for
a limitation on increase in value by filing a petition with the
assessor. Filing a petition in accordance with this section or
Section 7-38-21 NMSA 1978 entitles the property owner to a
hearing on [his] the protest.

B. Petitions shall:

(1) be filed with the county assessor on or
before:

(a) the later of April 1 of the property
tax year to which the notice applies or thirty days after the
mailing by the assessor of the notice of valuation if the
notice was mailed with the preceding year's tax bill in
accordance with Section 7-38-20 NMSA 1978;

(b) thirty days after the mailing of a
property tax bill on omitted property pursuant to Section
7-38-76 NMSA 1978; or

(c) in all other cases, thirty days
after the mailing by the assessor of the notice of valuation;

(2) state the property owner's name and
address and the description of the property;

(3) state why the property owner believes the
value, classification, allocation of value or denial of a claim
of an exemption or of a limitation on increase in value is
incorrect and what [he] the property owner believes the correct
value, classification, allocation of value or exemption to be;
and

(4) state the value, classification,
allocation of value or exemption that is not in controversy.

C. Upon receipt of the petition, the county
assessor shall schedule a hearing before the county valuation
protests board and notify the property owner by certified mail
of the date, time and place that [he] the property owner may
appear to support [his] the petition. The notice shall be
mailed at least fifteen days prior to the hearing date.

D. The county assessor may provide for an informal
conference on the protest before the hearing."

SECTION 5. EMERGENCY.--It is necessary for the public
peace, health and safety that this act take effect immediately.

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