AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

• Lea Power Partners, LLC (LPP), a wholesale electricity generator, operates the Hobbs Generating Facility in Hobbs, Lea County, New Mexico, delivering electricity into the Southwest Power Pool. LPP entered into a Power Purchase Agreement (PPA) with Southwest Public Service, guaranteeing LPP annual revenue regardless of electricity production. Following the sale of LPP and the Facility, LPP protested the New Mexico Property Tax Division's valuation of the Facility for the years 2012 through 2016, asserting the property value was significantly lower than the notices of valuation indicated (paras 2-5).

Procedural History

• [Not applicable or not found]

Parties' Submissions

• Protestant-Appellant/Cross-Appellee (LPP): Argued that the Administrative Hearing Officer (AHO) misinterpreted the law by including the PPA in the Facility's total value for property tax purposes, which denied LPP tax deductions it was entitled to, violated the Uniformity Clause of the New Mexico Constitution, and improperly disregarded certain expert testimony (para 6).
• Respondent-Appellee/Cross-Appellant (NMTRD): Contended that the PPA is not intangible property but an intangible cost subject to property taxation, the AHO erred by relying on the cost of acquisition rather than the cost of construction to determine LPP’s tangible property costs, and the AHO erred in setting aside the doctrine of administrative gloss by straying from long-standing NMTRD interpretation of statutes (para 7).

Legal Issues

• Whether the PPA is intangible property and subject to property taxation (para 10).
• Whether the AHO erred in determining the tangible property costs of LPP based on the cost of acquisition rather than the cost of construction (para 18).
• Whether the AHO erred by considering the PPA in determining whether LPP was owed deductions (para 22).
• Whether the AHO's consideration of expert testimony was proper (para 29).
• Whether the AHO's decision violates the New Mexico Constitution's Uniformity Clause (para 31).
• Whether the doctrine of administrative gloss requires the AHO to adhere to NMTRD’s interpretation of Section 7-36-29(B)(6) (para 33).

Disposition

• The Court of Appeals affirmed the AHO's decision (para 1).

Reasons

• The Court of Appeals held that the PPA is intangible property not subject to property taxation, supporting its decision with statutory interpretation and case law analysis (paras 10-17). It agreed with the AHO's reliance on the cost of acquisition for determining LPP's tangible property costs, finding it consistent with the statutory language and expert testimony (paras 18-21). The Court found no error in the AHO's consideration of the PPA when determining LPP's entitlement to deductions, noting that legislative silence on the issue does not prohibit such consideration (paras 22-28). It also found the AHO's treatment of expert testimony proper and driven by the facts and circumstances of the case (paras 29-30). Lastly, the Court concluded that there was no violation of the Uniformity Clause and declined to address the doctrine of administrative gloss due to NMTRD's failure to develop the argument (paras 31-34).