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HB 294

TAXATION OF CERTAIN AGRICULTURAL LAND

2025 Regular Session Introduced by Kathleen Cates

HB 294 lets land under conservation easements qualify for agricultural tax valuation, lowering local property taxes and reducing revenue, with added affidavit/filing duties.

action postponed indefinitely
#agriculture #taxation #property
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Bill Summary · HB 294

Summary — HB 294: Taxation of Certain Agricultural Land

Status: Action postponed indefinitely
Introduced: August 25, 2025
Subject: Agriculture; Property Taxation

Main purpose

HB 294 would allow certain lands held under conservation easements to be assessed for property tax purposes using agricultural valuation rather than their otherwise higher residential or commercial valuations. The stated intent is to recognize conservation-preserved land as maintaining an agricultural use for taxation purposes even when not actively farmed.

Key provisions

  • Expands the definition of "agricultural use" to explicitly include land preserved under conservation easements that protect habitat, open space, or historic resources.
  • Permits landowners with qualifying conservation easements to apply for agricultural valuation if the land "maintains the capacity to produce agricultural products," including land that is resting or not actively farmed because of conservation.
  • Requires landowners to apply for the agricultural valuation and to report any changes in land use that would disqualify the property.
  • Adds an affidavit requirement: conservation easement deeds must include an affidavit and be filed with the county assessor for record-keeping and valuation purposes.
  • Effective date: the bill contains no separate effective-date clause; per the fiscal analysis the bill would go into effect 90 days after adjournment (noted as June 20, 2025 in the fiscal note) and would apply to tax years 2025 and after.

Who would be affected

  • Landowners holding private land subject to conservation easements (those that protect habitat, open space, historic resources).
  • County assessors and local tax administrators (additional filing/recordkeeping duties).
  • Local governments and special taxing districts (school districts, municipalities, hospitals, conservation districts) that rely on property tax revenues.

Fiscal impact (per Legislative Finance Committee fiscal note)

  • Estimated recurring reductions in property tax revenue to local governments: approximately
    • FY25: $15.69 million
    • FY26: $19.66 million
    • FY27: $24.98 million
    • FY28: $30.73 million
    • FY29: $38.41 million
  • LFC estimates the change in valuation could reduce statewide net taxable value by more than $1.1 billion. A pre-yield-control revenue loss estimate cited in the analysis is on the order of tens of millions of dollars (document truncated where that figure appears).
  • Yield-control rules (7-37-7.1 NMSA 1978) could allow many operating mills to increase rates to offset some losses, but some counties/municipalities (the fiscal note cites Catron and Torrance counties as examples) and many special mills lack room to raise rates and therefore would face net revenue loss.
  • Debt mills can generally be adjusted to meet debt obligations; bond capacity and debt servicing could be affected for some issuers.

Additional data cited: Land Trust Alliance reports ~906,300 acres of private land under conservation easement in the state (about 3% of private acreage).

Procedural / timeline notes

  • Fiscal note prepared by the Legislative Finance Committee (original date Feb 7, 2025).
  • The version summary and fiscal impacts above come from that LFC analysis.
  • Current legislative status: action postponed indefinitely (per the materials provided).

Bottom line

HB 294 would broaden eligibility for agricultural property valuation to include land under conservation easements, lowering assessed values for qualifying parcels. This would reduce property tax revenues for local governments and special districts to varying degrees; yield-control mechanisms could offset some losses but leave net impacts for jurisdictions without mill-rate capacity. The bill also creates new filing and reporting requirements for owners and county assessors.

Compiled from official sources — confirm details with the bill’s official record.

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