Current through Register Vol. 35, No. 18, September 24, 2024
A.
Personal property. Unless otherwise provided in a business lease
or in this rule, improvements shall be the property of the lessee. The interest
of a lessee in a business lease and in the improvements is a personal property
interest. Unless otherwise provided in a business lease, improvement value
credit is only granted for permanent improvements and is not granted for
removable or unauthorized improvements. Water rights that are appurtenant to
trust land shall be developed and held in the name of the
commissioner.
B.
When
payable. When trust lands are sold or leased to a person other than the
holder of any improvement value credit, the successor in interest shall pay to
the commissioner the amount of the improvement value credit, if any. The
commissioner shall pay to the holder of the improvement value credit the amount
paid by the successor in interest, less any rent, costs or damages owed to the
commissioner.
(1) In lieu of such payment, a
successor in interest may file with the commissioner a bill of sale or waiver
of payment signed by the holder of the improvement value credit or, if an
appeal of the appraised value is taken, a bond sufficient to cover the value of
the improvements as determined by the commissioner.
(2) Except for the transfer of funds for
improvement value credit paid by a successor in interest as provided in this
subsection, the commissioner shall not be liable for the payment of any
improvement value credits. The commissioner may require a release or indemnity
from the party receiving payment of the improvement value credit.
(3) The holder of the improvement value
credit must be identified in the records of the state land office. Unless
otherwise provided in a lease or in an assignment, collateral assignment or
mortgage of improvements approved by the commissioner and filed with the state
land office, the commissioner shall treat the former lessee as the holder of
the improvement value credit and the party entitled to payment of any
improvement value credit.
C.
Calculation of improvement value
credit. Unless otherwise provided in a lease, the holder of the credit
is entitled to all of the improvement value credit attributable to the
permanent improvement.
(1) A business lease
may provide that the commissioner shall receive a specified portion of the
improvement value credit attributable to a permanent improvement.
(2) Unless otherwise provided in a lease or
in a statute, the improvement value credit will be the amount, if any, which
the permanent improvement adds to the value of the trust land. The added value
shall be determined, at the expense of the lessee or the holder of the credit,
by an appraisal conducted by a certified real estate appraiser. The appraisal
shall be submitted to the commissioner for review and approval. The
commissioner may obtain further appraisals to ascertain the improvement value.
The commissioner may require a successor in interest to reimburse the costs of
appraising the improvements.
(3)
The commissioner shall determine the value of the improvements and the
commissioner's determination shall be final unless the holder of the
improvement value credit initiates a contest as provided under Section
19-7-64
NMSA 1978.
(4) A business lease may
provide that an improvement value credit may be lost or depreciated if, after
termination of the business lease, there is no successor in interest other than
the commissioner.
