This bill appears to address the tax lightning issue. The original intent of HB366 (2001) introduced by Rep. Ben Lujan was to cap property assessments at 3% to prevent run away property taxes on local residents from the migration of Californians in the Santa Fe and Taos areas. However, the cap did not apply to new sales of homes and created the tax lightning. When older NM folks decided to down size their homes after the kids all left, were are basically hit with the same major property tax increase as all the folks who migrated to New Mexico since 2001.
The only thing missing from this bill is to reassessment of all property sold since 2001 back to the 2001 levels and assessed forward at the 3% cap.
However, if the bill is not passed than the following could happen and I think that would be the best solution. Let the markets regulate the value and get the government out of the picture. Here's the TRD and DFA final comment:
Consequences of legislative inaction on the residential property value issue are unclear but
potentially significant. At a minimum the state faces significant uncertainty entering the 2010
property tax year with numerous protests and refund claims already being filed on the grounds
that the present law 3 percent value limitation is unconstitutional. Possible outcomes include a
finding by higher courts that the entire section 7-36-21.2 is unconstitutional. Such an outcome
would appear to require that assessors bring all properties to current and correct, increasing
values for more than half of the property owners in the state.