Summary:

 House Bill 294 (HB 294) amends Section 7-36-20 NMSA 1978 to allow land subject to a conservation easement to be valued as agricultural land for property tax purposes. The bill ensures that landowners who enter into conservation easements for habitat preservation, open space, or historical resource conservation receive agricultural tax valuation benefits, even if the land is not actively used for farming or ranching. 

Legislation Overview:

 House Bill 294 (HB 294) modifies the special method of valuation for agricultural land, expanding the definition of agricultural use to include land subject to a conservation easement. The bill allows land enrolled in federal or state conservation programs or held under a land trust agreement to be taxed at agricultural land rates rather than higher-valued classifications such as commercial or residential.

The bill defines qualifying conservation easements as agreements between landowners and accredited land trusts or government agencies to protect natural, scenic, or historic resources. The land must meet minimum conservation criteria to qualify for agricultural valuation status.

The bill also amends Section 7-38-12.1 NMSA 1978, requiring that conservation easement deeds be reported to county assessors within 30 days of filing, ensuring proper classification. The changes apply to tax years beginning on or after January 1, 2025.

Implications
HB 294 provides property tax relief to landowners who commit to long-term conservation efforts, ensuring that conservation easements do not trigger higher property valuations. By allowing these properties to be valued as agricultural land, the bill reduces tax burdens and incentivizes land preservation.

Local governments may experience reduced property tax revenue, particularly in rural areas where large tracts of land shift from higher tax classifications to agricultural valuation. However, the bill may encourage conservation participation, preserving natural habitats, open space, and historical sites while supporting sustainable land use practices.
 

Current Law:

 Under current law, land must be actively used for farming, ranching, or other agricultural production to qualify for agricultural tax valuation. Conservation easements do not automatically receive agricultural classification, potentially resulting in higher property tax rates for preserved land. HB 294 ensures that landowners engaged in conservation efforts receive tax benefits comparable to agricultural producers.