N.M. Stat. § 7-36-28 (2026)

systems, meters, plants and hydrants used in the collection,
transmission, storage, treatment, discharge, measurement or
distribution of water or wastewater.
    A. Except as provided in Subsection F [G] of this section, all pipelines, tanks,
meters, lift stations, treatment facilities, plants and hydrants used in the collection,
transmission, storage, measurement, treatment, discharge or distribution of water or
wastewater subject to valuation for property taxation purposes shall be valued in
accordance with the provisions of this section.

   B. As used in this section:

       (1)    "commercial water property" means privately owned pipelines, tanks,
meters, plants, hydrants, materials and supplies, whether in service, in stock or under
construction, owned and operated as a utility for the purpose of transmitting, storing,
measuring or distributing water for sale to the consuming public, excluding general
buildings and improvements;

        (2)   "commercial wastewater property" means privately owned pipelines,
collection systems, lift stations, meters, treatment facilities, materials and supplies,
whether in service, in stock or under construction, owned and operated as a utility for
the purpose of collecting, transmitting, measuring, treating or discharging wastewater
used for the purpose of providing wastewater service to the public, excluding general
buildings and improvements;

       (3)   "depreciation" means straight line depreciation over the useful life of the
item of property;

       (4)     "general buildings and improvements" means buildings of the nature of
offices, residential housing, warehouses, shops and associated improvements in
general use by the taxpayer but not directly associated with the collection, transmission,
storage, measurement, treatment, discharge or distribution of water or wastewater;
      (5)    "gallons" means the measurement of water sold or the measurement of
wastewater discharged to a third party's treatment facility or the measurement of
wastewater treated and discharged;

      (6)    "revenue" means gross utility operating revenue;

      (7)    "closed system" means a commercial water system in which water is
gathered primarily by wells and stored in closed reservoirs and tanks; and

      (8)    "combination system" means a commercial water system in which water is
gathered both in open reservoirs and by wells and is stored both in open reservoirs and
closed reservoirs and tanks.

   C. The value of commercial water property shall be determined as follows:

      (1)     a factor of two and forty-nine one hundredths per thousand gallons is to be
used for a closed system and three and twenty-five one hundredths is to be used for a
combination system;

      (2)    the department shall determine the type of system into which the
taxpayer's commercial water properties should be categorized;

       (3)   the department shall then ascertain the number of thousand gallons sold
to consumers by the taxpayer during each of the three immediately preceding calendar
years and the taxpayer's water revenue from the immediately preceding calendar year;

       (4)    a simple average of the three-year thousand gallon sales shall be
computed and compared to the actual thousand gallons sold to consumers during the
immediately preceding calendar year. The higher of the average thousand gallons or
the immediately preceding year's actual thousand gallons shall be the basis for value
calculations;

        (5)    the thousand gallon figure determined in Paragraph (4) of this subsection
shall then be multiplied by the appropriate per thousand gallon factor from Paragraph
(1) of this subsection. The result of this calculation is the value of commercial water
property for property taxation purposes; and

        (6)   notwithstanding the calculations provided for in Paragraphs (1) through (5)
of this subsection, the value of the taxpayer's commercial water property shall not be
greater than four and one-half times the revenue derived during the immediately
preceding calendar year from the operation of the commercial water property.

   D. The value of commercial wastewater property shall be determined as follows:

      (1)    a factor of two and forty-nine one hundredths per thousand gallons shall
be used;
       (2)   the department shall then ascertain the number of thousand gallons
wastewater discharged to a third party's treatment facility or the number of thousand
gallons wastewater treated and discharged during each of the three immediately
preceding calendar years and the taxpayer's wastewater revenue from the immediately
preceding calendar year;

      (3)    a simple average of the three-year thousand gallons shall be computed
and compared to the actual thousand gallons during the immediately preceding
calendar year. The higher of the average thousand gallons or the immediately
preceding year's actual thousand gallons shall be the basis for value calculations;

        (4)     the thousand gallon figure determined in Paragraph (3) of this subsection
shall then be multiplied by the factor provided in Paragraph (1) of this subsection. The
result of this calculation is the value of commercial wastewater property for property
taxation purposes; and

        (5)   notwithstanding the calculations provided for in this subsection, the value
of the taxpayer's commercial wastewater property shall not be greater than four and
one-half times the revenue derived during the immediately preceding calendar year
from the operation of the commercial wastewater property.

    E. Each item of property having a taxable situs in the state and valued pursuant to
this section shall have its net taxable value allocated to the governmental units in which
the property is located on the basis of the percentage of the taxpayer's total investment
in each governmental unit.

   F. The department shall adopt regulations to implement the provisions of this
section.

   G. Commercial water property owned or sold by a nonprofit mutual domestic water
association is exempt from valuation for property taxation purposes.

History: Laws 1973, ch. 258, § 29; 1953 Comp., § 72-29-17; Laws 1975, ch. 165, § 9;
1978 Comp., § 7-36-28; 2009, ch. 246, § 1; 2009, ch. 247, § 1.

                                    ANNOTATIONS

Bracketed material. — The bracketed material was inserted by the compiler and is not
part of the law. The reference to "Subsection F" in Subsection A, appears to refer to
Subsection G, which was former Subsection F prior to the 2009 amendment.

2009 Multiple Amendments. — Laws 2009, ch. 246, § 1 and Laws 2009, ch. 247, § 1
enacted different amendments to this section that can be reconciled. Pursuant to 12-1-8
NMSA 1978, Laws 2009, ch. 247, § 1, as the last act signed by the governor, is set out
above and incorporates both amendments. The amendments enacted by Laws 2009,
ch. 246, § 1 and Laws 2009, ch. 247, § 1 are described below. To view the session laws
in their entirety, see the 2009 session laws on NMOneSource.com.

Laws 2009, ch. 247, § 1, effective April 7, 2009, in Subsection A, after "tanks", deleted
"sales", after "meters", added "lift stations, treatment facilities"; after "used in the",
added "collection"; after "measurement", added "treatment, discharge"; and after
"distribution of water", added "or wastewater"; added Paragraph (2) of Subsection B; in
Paragraph (4) of Subsection B, after "associated with the", added "collection"; after
"measurement", added "treatment, discharge"; and after "distribution of water", added
"or wastewater"; in Paragraph (5) of Subsection B, after "water sold", added the
remainder of the sentence; in Paragraph (3) of Subsection C, after “taxpayer's, added
"water"; in Paragraph (5) of Subsection C, after "purposes;", added "and"; in Paragraph
(6) of Subsection C, after "provided for", deleted "above" and added "in Paragraphs (1)
through (5) of this subsection"; added Subsection D; in Subsection E, after "valued",
deleted "under" and added "pursuant to"; and in Subsection F, after "regulations",
deleted "under Section 72-31-88 NMSA 1953".

Laws 2009, ch. 246, § 1, effective June 19, 2009, in Subsection A, added "Except as
provided in Subsection F of this section"; in Paragraph (5) of Subsection C, after
"purposes;", added "and"; in Subsection E, after "regulations", deleted "under Section
72-31-88 NMSA 1953"; and added Subsection F.

Mutual domestic water consumers associations are municipal corporations and
are therefore exempt from property taxes. — Article VIII, § 3 of the New Mexico
Constitution exempts from property taxes the property of municipal corporations, and
under current law mutual domestic water consumers associations (MDWCA), organized
pursuant to the Sanitary Projects Act, NMSA 1978, §§ 3-29-1 to 3-29-21, are municipal
corporations, as they are local political entities created pursuant to statute and
authorized to manage community water systems, and therefore the property of
MDWCAs is constitutionally exempt from property taxation. 2024 Op. Att'y Gen. No. 24-
06.