Pinghua Zhao v. Montoya

• Decision Date: 23 May 2012
• Docket Number: No. 30,172.,30,172.
• Citation: 2012 -NMCA- 056,280 P.3d 918
• Parties: PINGHUA ZHAO, Plaintiff–Appellant, v. Karen L. MONTOYA, Bernalillo County Assessor, Defendant–Appellee, Gregg Vance Fallick and Janet M. Fallick, Plaintiffs–Appellants, v. Karen L. Montoya, Bernalillo County Assessor, Defendant–Appellee.
• Court: Court of Appeals of New Mexico

280 P.3d 918

2012 -NMCA- 056

PINGHUA ZHAO, Plaintiff–Appellant,

v.Karen L. MONTOYA, Bernalillo County Assessor, Defendant–Appellee,Gregg Vance Fallick and Janet M. Fallick, Plaintiffs–Appellants,

v.Karen L. Montoya, Bernalillo County Assessor, Defendant–Appellee.

No. 30,172.

Court of Appeals of New Mexico.

March 28, 2012.

Certiorari Granted, May 23, 2012, Nos. 33,589, 33,594.

Stephanie Dzur, Tax Estate & Business Law, Ltd., Clinton W. Marrs Albuquerque, NM, for Appellant Zhao.

Sanders & Westbrook, P.C., Duff Westbrook, Maureen Sanders, Albuquerque, NM, for Appellee.

Greg Vance Fallick, Albuquerque, NM, Pro Se for Appellants Fallicks.

OPINION

KENNEDY, Judge.

{1} In this consolidated case, certified to us by the Bernalillo County District Court, Pinghua Zhao, Gregg Fallick, and Janet Fallick (Homeowners) appeal a significant increase in the value of their homes for property tax assessment as a result of a phenomenon commonly called “tax lightning.” This phenomenon occurs when a home that has been owned by the same taxpayer for more than a year is sold to a new owner for a price representing a significant increase from its previously assessed value. The property is then reassessed for its “current and correct” taxable value which reflects the property's market value. NMSA 1978, § 7–36–15(B) (2008); 3.6.5.23(C) NMAC. This reassessment can result in a proportionately significant increase in the property's assessed value and, hence, the disparity between the former and the new homeowner's tax bill. SeeNMSA 1978, § 7–36–21.2 (2003) (amended 2010). Such was the case with Homeowners. Homeowners maintain that this increase in taxable value contravenes Article VIII, Section 1 of the New Mexico Constitution, which mandates that the Legislature limit annual increases in the assessed value of residential property and states that these limitations may be implemented according to certain “classes” of taxpayers, including a class based upon “owner-occupancy.”

{2} We disagree with Homeowners, holding that the Property Tax Code's different valuation methods under Section 7–36–21.2 for newly sold residential properties and those owned more than a year do not create a new class of taxpayer not specified by the New Mexico Constitution. Consequently, the County Assessor correctly operates within the parameters of the New Mexico Constitution and New Mexico statutes in resetting the value of residential property in the tax year following its sale at a current and correct market value.

I. BACKGROUND

{3} The facts in the case are not in dispute. Homeowners bought and occupied new homes and, in the year following their purchase, Bernalillo County valued their properties at significantly greater amounts for tax assessment purposes than it had for the properties' previous owners. As a result, the property tax assessment for each home significantly increased. Homeowners appealed to the Bernalillo County Valuation Protests Board (Board), contending that the statute with which their properties were assessed was unconstitutional. The Board rejected the appeals and upheld the assessor's valuations. Homeowners then appealed to the district court, which, in light of what it believed to be a slew of similar cases, did not decide the case. Rather, the district court took judicial notice of two previous cases from the district with disparate results and certified the cases to this Court. SeeNMSA 1978, § 39–3–1.1(F) (1999); Rule 12–608 NMRA (setting forth the requirements and procedures for such certification to this Court). The question certified was

[w]hether Subsections (A)(3)(a), Subsection (B), and Subsection (E) of ... [Section] 7–36–21.2 ... violate the New Mexico Constitution, Article VIII, [Section] 1 (as amended 1998), because the Subsections create a classification based on when residential property was acquired, not on the constitutionally permissible classifications of owner-occupancy, age, or income.

{4} Because this question is one of broad and substantial public interest and likely to recur, we conclude that the district court properly certified the question to us, and we accept the certification. See Jicarilla Apache Nation v. Rio Arriba Cnty. Assessor, 2004–NMCA–055, ¶ 13, 135 N.M. 630, 92 P.3d 642,rev'd on other grounds by Jicarilla Apache Nation v. Rodarte, 2004–NMSC–035, 136 N.M. 630, 103 P.3d 554.

II. DISCUSSION

{5} Enacted in 2000 and amended in 2001 and 2003, Section 7–36–21.2 is at issue in this case and provides in pertinent part:

A. Residential property shall be valued at its current and correct value in accordance with the provisions of the Property Tax Code ...; provided that for the 2001 and subsequent tax years, the value of a property in any tax year shall not exceed the higher of one hundred three percent of the value in the tax year prior to the tax year in which the property is being valued or one hundred six and one-tenth percent of the value in the tax year two years prior to the tax year in which the property is being valued. This limitation on increases in value does not apply to:

....

(3) valuation of a residential property in any tax year in which:

(a) a change of ownership of the property occurred in the year immediately prior to the tax year for which the value of the property for property taxation purposes is being determined[.]

....

B. If a change of ownership of residential property occurred in the year immediately prior to the tax year for which the value of the property for property taxation purposes is being determined, the value of the property shall be its current and correct value as determined pursuant to the general valuation provisions of the Property Tax Code.

....

E. As used in this section, “change of ownership” means a transfer to a transferee by a transferor of all or any part of the transferor's legal or equitable ownership interest in residential property except for a transfer[.]

{6} The limitation on property value accorded by Section 7–36–21.2(A) is an exception to the general provisions of the Property Tax Code governing valuation of property for taxation purposes. SeeNMSA 1978, § 7–36–15(B) (1995) (amended 2008) (stating the general provisions for valuation of property); NMSA 1978, § 7–36–16(A) (2000) (noting the limitations on value imposed by Section 7–36–21.2 as an exception to the requirement that assessors regularly update the values of property for property taxation purposes to current and correct levels). Generally, all property is valued to reflect “current and correct” values, and current and correct values are updated and maintained regularly. See§ 7–36–16; NMSA 1978, § 7–38–7 (1997). Section 7–36–21.2(A) creates an exception to that rule by limiting the increase in valuation to three percent a year after the residential property has changed ownership and been revalued according to “general valuation provisions of the Property Tax Code.” Section 7–36–21.2(B). Section 7–36–21.2 limits increases in this manner, so long as the property is not transferred to a new owner. The applicability of this exception begins anew in the year following the purchase of a home by a new owner.

{7} Homeowners argue that the limitation on taxation created by Section 7–36–21.2 violates Article VIII, Section 1 of the New Mexico Constitution by creating an unauthorized class of residential property taxpayers based upon the time of acquisition.¹ Homeowners also argue that Section 7–36–21.2 is invalid on its face. For reasons explained in this Opinion, we hold that Section 7–36–21.2 does not violate the New Mexico Constitution.

A. Standard of Review

{8} Because the facts in this matter are not in dispute, and the issue certified is solely one of statutory and constitutional interpretation, we review the question presented to us de novo. Dell Catalog Sales L.P. v. Taxation & Revenue Dep't, 2009–NMCA–001, ¶ 17, 145 N.M. 419, 199 P.3d 863. Likewise, we review de novo whether Section 7–36–21.2 conflicts with Article VIII, Section 1of the New Mexico Constitution. See Georgia O'Keeffe Museum v. Cnty. of Santa Fe, 2003–NMCA–003, ¶ 27, 133 N.M. 297, 62 P.3d 754. “It is presumed that words appearing in [the C]onstitution have been used according to their plain, natural, and usual signification and import, and the courts are not at liberty to disregard the plain meaning of words of [the C]onstitution in order to search for some other conjectured intent.” State ex rel. Gomez v. Campbell, 75 N.M. 86, 101, 400 P.2d 956, 966 (1965) (alteration omitted) (internal quotation marks and citation omitted).

{9} Similarly, “plain language of a statute is the primary indicator of legislative intent.” High Ridge Hinkle Joint Venture v. City of Albuquerque, 1998–NMSC–050, ¶ 5, 126 N.M. 413, 970 P.2d 599 (internal quotation marks and citation omitted). We “give the words used in the statute their ordinary meaning unless the [L]egislature indicates a different intent.” Id. (internal quotation marks and citation omitted). We do not read additional language into the statute, particularly when it makes sense as the Legislature wrote it. Id.

{10} In our review, we indulge in a strong presumption that the statute in question is constitutional, and we will uphold a statutory enactment unless we are satisfied beyond all reasonable doubt of its unconstitutionality. Bounds v. State, 2011–NMCA–011, ¶ 34, 149 N.M. 484, 252 P.3d 708,cert. granted sub nom. Bounds v. Dantonio, 2011–NMCERT–001, 150 N.M. 560, 263 P.3d 902. “[T]he party attacking the constitutionality of the statute has the burden of proving the statute is unconstitutional beyond all reasonable doubt.” Wachocki v. Bernalillo Cnty. Sheriff's Dep't, 2010–NMCA–021, ¶ 33, 147 N.M. 720, 228 P.3d 504 (internal quotation marks and citation omitted), aff'd,2011–NMSC–039, 150 N.M. 650, 265 P.3d 701. “It is ... a fundamental principle that courts will not declare a legislative act unconstitutional if there is any reasonable basis upon which it can be upheld.” Amador v....