July 03, 2012 – AMREP Southwest Inc., a New Mexico Corporation, and Outer Rim Investments, Inc., a New Mexico Corporation v. Sandoval County Assessor, No. 31,207

IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number: ___________
Filing Date: July 3, 2012
NO. 31,207
AMREP SOUTHWEST INC.,
a New Mexico corporation, and
OUTER RIM INVESTMENTS, INC.,
a New Mexico corporation,
Protestants -Appellants,
v.
SANDOVAL COUNTY ASSESSOR,
Respondent-Appellee.
APPEAL FROM THE DISTRICT COURT OF SANDOVAL COUNTY
George P. Eichwald, District Judge
Lastrapes, Spangler & Pacheco, PA
Matthew M. Spangler
Rio Rancho, NM
for Appellants
County of Sandoval
Natalia Sanchez Downey, Assistant County Attorney
Bernalillo, NM
for Appellee

OPINION
SUTIN, Judge.
{1} 	Appellant corporations protested the value of their property for taxation
purposes for the 2009 tax year. 	At the protest hearing, in conformity with its
longstanding interpretation of statutory and administrative codes, the Sandoval County
Valuation Protests Board (the Board) refused to consider Appellants’ comparable
2009 sales evidence. The Board relied exclusively on comparable 2008 sales. The
district court affirmed the Board’s decision. This appeal followed. We too hold that
the Board did not err.
BACKGROUND
{2} 	AMREP Southwest Inc. and its subsidiary, Outer Rim Investments, Inc.,
(AMREP) owned approximately 19,541 parcels of vacant property in Sandoval
County, New Mexico. In March 2009, the Sandoval County Assessor delivered to
AMREP notices of property value for taxation purposes for the 2009 tax year, with
taxes due in two equal installments on November 10, 2009, and April 10, 2010. See
NMSA 1978, § 7-38-38(A) (1987) (stating the tax payment due dates). 	AMREP
protested the valuations, claiming that the assessed values of the properties were
greater than their fair market values. See NMSA 1978, § 7-38-25(D) (1997) (stating

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that “[t]he county valuation protests board shall hear and decide protests of
determinations made by county assessors”).
{3} 	The protest hearing took place on August 31 through September 4, and on
September 21, 2009, before the Board. AMREP presented two types of evidence in
support of its proposed valuation figures: (1) certain characteristics of the properties,
including topographical issues that affected the value of some of the vacant lots; and
(2) an analysis of comparable sales that occurred in 2009. 	As to the first type of
evidence, the Board was persuaded that a number of parcels had been overvalued, and
the Board adjusted the assessor’s valuation determinations accordingly. 	Those
adjustments are not at issue in this appeal. 	At issue here is the Board’s refusal to
adjust valuations based on comparable 2009 sales.
{4} 	In regard to its refusal to consider AMREP’s 2009 sales data to adjust the
assessor’s valuations, the Board explained that based upon its “consistent[]” and
“longstanding interpretation” of relevant statutory and administrative code provisions,
properties must be valued using only data available on January 1, 2009. 	The
particular statutory and administrative code provisions cited by the Board included
NMSA 1978, Section 7-36-15(B)(1) (2008). This section provides that
the value of property for property taxation purposes shall be its market
value as determined by application of the sales of comparable property
. . . . 	In using any of the methods of valuation authorized by this
subsection, the valuation authority:

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. . . shall apply generally accepted appraisal techniques[.]
NMSA 1978, Section 7-38-7 (1997) provides that “[a]ll property subject to valuation
for property taxation purposes shall be valued as of January 1 of each tax year[.]”
Additionally, Regulation 3.6.7.14(A) of the Administrative Code provides that the
taxable status of property is fixed as of “January 1 of each year[.]” See id. (stating that
“January 1 of each year is the date which determines the tax status of all property
subject to valuation for property taxation purposes”).
{5} 	The Board also noted “parallels contained in [Regulation 3.6.5.23(C)(2) of the
Administrative Code], which generally establishes the data . . . to be used in
determining the ‘current and correct’ value of [residential] property . . . . [and]
requires the use of ‘market value of the year prior to the current tax year’ for property
not recently purchased.” The Board explained that “[t]his regulation recognizes that
the best indicator of value on January 1 is the composite value for the prior year.”
{6} 	Thus, the Board did not rely on the data from 2009 sales offered by AMREP.
The district court affirmed the Board’s decision. On appeal to this Court, AMREP
requests that we reverse the district court and remand the matter with instructions to
vacate the Board’s decision. 	AMREP asserts that the Board’s interpretation of its
governing statutes and administrative code provisions is contrary to law and that the

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Board acted arbitrarily and denied it due process because the Board failed to consider
the comparable 2009 sales data.
DISCUSSION
{7} 	As did the district court, we review the whole record to determine whether the
Board’s decision was “arbitrary, capricious, or an abuse of discretion; not supported
by substantial evidence in the record; or, otherwise not in accordance with law.” Rio
Grande Chapter of Sierra Club v. N.M. Mining Comm’n, 2003-NMSC-005, ¶ 17, 133
N.M. 97, 61 P.3d 806; see Rule 1-074(R) NMRA. Additionally, we review de novo
the legal question of whether the Board misinterpreted and misapplied its statutory
and administrative governing provisions. 	See Lobato v. State Env’t Dep’t, 2012-
NMSC-002, ¶ 6, __ N.M. __, 267 P.3d 65. 	Likewise, we review de novo the
constitutional question of whether AMREP was deprived of procedural due process.
Albuquerque Bernalillo Cnty. Water Util. Auth. v. N.M. Pub. Regulation Comm’n,
2010-NMSC-013, ¶ 19, 148 N.M. 21, 229 P.3d 494.
{8} 	AMREP’s contentions of error derive from the premise that the New Mexico
Property Tax Code, NMSA 1978, §§ 7-35-1 to -38-93 (1973, as amended through
2012), does not expressly require that the comparable sales used for property
valuations can only consist of data known as of January 1 of the tax year. 	Thus,
according to AMREP, the Board’s “longstanding interpretation” of Section 7-38-7 and

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related administrative code provisions to mean that properties must be valued using
only sales available on January 1 was contrary to law and was arbitrary. 	AMREP
supports its position by arguing that “generally accepted appraisal techniques”
required the use of relevant post-January 1 sales in making a valuation determination.
{9} 	We are guided by three rules of statutory construction. 	Smith v. Bernalillo
Cnty., 2005-NMSC-012, ¶ 18, 137 N.M. 280, 110 P.3d 496. 	First, we look to the
plain language of a statute as a primary indicator of legislative intent. 	Id. 	Second,
provided that the agency has not misapplied or failed to abide by its governing
provisions, we “give persuasive weight to long-standing administrative constructions
of statutes by the agency charged with administering them.” Id. (internal quotation
marks and citation omitted); see State ex rel. Castillo Corp. v. N.M. State Tax
Comm’n, 79 N.M. 357, 360, 362, 443 P.2d 850, 853, 855 (1968) (stating that the
appellate courts will not give persuasive weight to an agency’s longstanding
misapplication or misinterpretation of law). 	And third, so as to give effect to all
relevant provisions, they are read together. Smith, 2005-NMSC-012, ¶ 18. The rules
of statutory construction also apply to interpreting sections of the administrative code.
PC Carter Co. v. Miller, 2011-NMCA-052, ¶ 11, 149 N.M. 660, 253 P.3d 950.
{10} 	Neither party argues that the applicable statutes or administrative code
provisions are ambiguous. We therefore will not address any question of ambiguity.

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The parties simply interpret what they apparently believe is plain language, either, as
the Board contends, unaffected by Section 7-36-15(B)(1) or, as AMREP contends, to
be read together with that section. The Board interprets “as of January 1” to mean
“available” as of January 1, allowing no consideration of tax-year sales in valuation
analysis. AMREP interprets “as of January 1” to mean “accurate” as of January 1,
allowing consideration of relevant tax-year sales. Contrary to AMREP’s due process
argument that the Board refused to receive the evidence of comparable 2009 sales, the
Board received the evidence but gave it no weight whatsoever given the Board’s
restrictive view of Section 7-38-7.
{11} 	AMREP argues that the 2009 sales were obviously relevant on the question of
property values as of January 1, 2009, and that use of relevant evidence of that value
comported with the requirement that the assessor employ generally accepted appraisal
techniques. 	AMREP’s expert appraiser testified that with the major decline in the
national economy that occurred in the third quarter of 2008, insufficient sales occurred
leading up to January 1, 2009, from which AMREP could reasonably calculate the
value estimates. This lack of adequate data from late 2008 resulted in their attempt
to use 2009 sales to establish these values.
{12 } 	It is noteworthy that the Board appears to have been somewhat sympathetic
with AMREP’s arguments. As pointed out by AMREP, the Board stated:

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38. 	[AMREP’s] expert witness . . . assigned lower values than the
[a]ssessor[] for each unit based on an analysis of comparable sales trends
that included sales for the 2009 tax year. All parties seemed to recognize
that 2007 or 2008 was a high water mark for values in Rio Rancho
Estates, and that 2009 values are down significantly.
39. 	[AMREP’s expert’s] analysis would appear to comply, at least in
part, with generally accepted appraisal techniques, as required by the
applicable statute and regulation [to the extent that i]t is a generally
accepted 	appraisal 	technique 	that 	recent 	comparable 	sales 	are
preferable[.]
40. 	However[,] this is a case in which good appraisal practice seems
to conflict with governing regulation.
(Footnote and citations omitted.) The Board nevertheless determined that it would
hold fast with its consistent interpretation of Section 7-38-7 and the administrative
code provisions “to mean that properties must be valued using only data available on
January 1 of the tax year.” The Board’s primary rationales supporting its hold-fast
position were:
43. 	Attempting to value property as of the date of hearing, whenever
that may be, sets up a moving target that directly conflicts with the goals
of consistency, certainty[,] and administrability contained in the Property
Tax Code.
44. 	We also note parallels contained in [Regulation] 3.6.5.23(C),
which generally establishes the data . . . to be used in determining the
“current and correct” value of a property (although it contains an
apparent oversight in not including non-residential properties that are
assessed on a one-year appraisal cycle, as in this case). That regulation
requires the use of “market value of the year prior to the current tax
year” for property not recently purchased. This regulation recognizes

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that the best indicator of value on January 1 is the composite value for
the prior year.
. . . .
46. 	[AMREP’s expert] witness testified that the asserted values were
not supportable on pre-2009 evidence alone, and we therefore find that
[AMREP] has not overcome the presumption of correctness in favor of
the [a]ssessor’s valuation on this basis.
{13} 	AMREP asserts that “[t]his is not a case in which good appraisal practice
conflicts with the [relevant statutory and administrative provisions] . . ., it is a case in
which the Board has historically misinterpreted the plain language of [those
provisions] and continues to perpetuate its misinterpretation.” In AMREP’s view, the
Property Tax Code requires “only that the property’s value is accurate as of January
1, 2009, by the use of generally accepted appraisal techniques.” 	While AMREP’s
position tends to make sound valuation sense, we will not interpret Sections 7-36-
15(B)(1) and 7-38-7 as requiring the Board to include valuation-relevant, post-January
1 comparable sales in its decision.
{14} 	The statutory and administrative code provisions at issue, read together so as
to give effect to their meaning, support the Board’s application of its “longstanding
interpretation” of the provisions to the circumstances in this case. In addition to other
relevant provisions noted by the Board, part of the valuation process requires the
assessor to mail valuation notices to property owners by April 1 of each tax year.

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Section 7-38-20(A). The Legislature could reasonably have intended the valuation
scheme to have consistency and to be efficient and effective through a cut-off date for
valuation data. By adhering to a January 1 evidentiary cut-off date, the assessor has
a reliable, consistent, workable valuation process, pursuant to which there is time to
prepare and mail valuation notices by April 1. This serves to reduce the burden on
assessors to timely formulate valuations of thousands of properties for their required
time-limited notices of value to be mailed for tax purposes by April 1 of each year.
A cut-off date also eliminates the substantial amount of further valuation work that
would be required in order to meet “moving targets” presented by protests based on
later-developed evidence of comparable tax-year sales.
{15} 	Nothing in the law suggests that protests boards are required to consider
comparable tax-year sales in determining whether to adjust the assessor’s valuation.
In re Protest of Miller, 88 N.M. 492, 496-97, 542 P.2d 1182, 1186-87 (Ct. App.
1975), rev’d on other grounds, 89 N.M. 547, 555 P.2d 142 (1976), cited by AMREP
to support its argument that the Board acted arbitrarily and denied AMREP due
process, is inapplicable. In Miller, this Court reversed the decisions of certain county
protests boards because the boards had reached a decision without considering
relevant evidence presented at the hearing, thereby rendering the decisions arbitrary.

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Id. at 494, 497, 542 P.2d at 1184, 1187. 	Unlike Miller, here the relevancy of the
evidence is immaterial.
{16} 	Further, for tax law consistency, efficiency, and effectiveness, the Legislature
could well have intended, as a policy matter, to preclude up-and-down value
manipulation and regulation by adding comparable tax-year sales. With a January 1
evidentiary cut-off date, the assessor is able to reasonably anticipate the evidence that
may be presented to rebut the presumption of correctness of the valuation, and the
assessor is better equipped to defend the valuation. Nothing in the law suggests that
assessors are to gather comparable tax-year sales data either for valuation notices or
to defend protests.
{17} 	AMREP’s view of the valuation scheme results in what would appear to be an
unacceptable imbalance in the valuation process. 	In years in which relevant
comparable tax-year sales show a significant increase in property value, once the
assessor provides notice of value, the assessor presumably cannot adjust the valuation
upward to reflect a higher value; whereas, in years in which relevant comparable tax-
year sales show a significant decrease in value, those who protest may obtain a
reduced tax-year valuation. We doubt that the Legislature intended this imparity in
the enactment of the statutory property tax provisions or that the State Taxation and

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Revenue Department intended this in the adoption of the administrative code
provisions relating to valuation of real property.
{18} 	In our view, the Board appropriately refused to consider AMREP’s 2009 sales
data. The refusal was based on a policy-driven purposeful cut-off date for sales data.
If our view is mistaken, we assume the Legislature will correct it. We hold that the
Board’s interpretation of the statutory and administrative code provisions was
reasonable and that, with respect to comparable sales, the Legislature intended
assessors and protests boards to consider only the data available on January 1 of the
tax year of the valuation notice. The Board did not act contrary to law, it did not act
arbitrarily, and it did not deny AMREP procedural due process.
CONCLUSION
{19} 	We affirm.
{20} 	IT IS SO ORDERED.
__________________________________
JONATHAN B. SUTIN, Judge
WE CONCUR:
___________________________________
CELIA FOY CASTILLO, Chief Judge
___________________________________
RODERICK T. KENNEDY, Judge