{ "id": 5331320, "name": "INTERNATIONAL MINERALS & CHEMICAL CORPORATION (IMC), Appellant, v. PROPERTY APPRAISAL DEPARTMENT, State of New Mexico, Appellee", "name_abbreviation": "International Minerals & Chemical Corp. (IMC) v. Property Appraisal Department", "decision_date": "1971-12-03", "docket_number": "No. 670", "first_page": "402", "last_page": "410", "citations": [ { "type": "official", "cite": "83 N.M. 402" }, { "type": "parallel", "cite": "492 P.2d 1265" } ], "court": { "name_abbreviation": "N.M. Ct. App.", "id": 9025, "name": "Court of Appeals of New Mexico" }, "jurisdiction": { "id": 52, "name_long": "New Mexico", "name": "N.M." }, "cites_to": [ { "cite": "356 U.S. 260", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6162424 ], "weight": 3, "year": 1958, "opinion_index": 0, "case_paths": [ "/us/356/0260-01" ] }, { "cite": "241 F.2d 78", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 417526 ], "year": 1957, "opinion_index": 0, "case_paths": [ "/f2d/241/0078-01" ] }, { "cite": "3 L.Ed.2d 303", "category": "reporters:federal", "reporter": "L. Ed. 2d", "year": 1959, "opinion_index": 0 }, { "cite": "79 S.Ct. 318", "category": "reporters:federal", "reporter": "S. Ct.", "year": 1959, "opinion_index": 0 }, { "cite": "358 U.S. 930", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 3650648, 3660874, 3659080, 3649784 ], "year": 1959, "opinion_index": 0, "case_paths": [ "/us/358/0930-03", "/us/358/0930-01", "/us/358/0930-04", "/us/358/0930-02" ] }, { "cite": "258 F.2d 892", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 451936 ], "year": 1958, "opinion_index": 0, "case_paths": [ "/f2d/258/0892-01" ] }, { "cite": "82 N.M. 232", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5329944 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/nm/82/0232-01" ] }, { "cite": "79 N.M. 332", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2738847 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/nm/79/0332-01" ] }, { "cite": "490 P.2d 968", "category": "reporters:state_regional", "reporter": "P.2d", "case_ids": [ 5341420 ], "opinion_index": 0, "case_paths": [ "/nm/83/0251-01" ] }, { "cite": "52 F.2d 880", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1817781 ], "pin_cites": [ { "page": "883" } ], "opinion_index": 1, "case_paths": [ "/f2d/52/0880-01" ] }, { "cite": "66 N.M. 165", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2846385 ], "weight": 2, "year": 1959, "opinion_index": 1, "case_paths": [ "/nm/66/0165-01" ] }, { "cite": "57 N.M. 315", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 8841783 ], "weight": 2, "year": 1953, "opinion_index": 1, "case_paths": [ "/nm/57/0315-01" ] }, { "cite": "53 N.M. 127", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1580724 ], "weight": 2, "year": 1949, "opinion_index": 1, "case_paths": [ "/nm/53/0127-01" ] }, { "cite": "67 N.M. 23", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2716805 ], "weight": 2, "year": 1960, "opinion_index": 1, "case_paths": [ "/nm/67/0023-01" ] }, { "cite": "78 N.M. 477", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5325626 ], "weight": 2, "year": 1967, "opinion_index": 1, "case_paths": [ "/nm/78/0477-01" ] }, { "cite": "214 A.2d 526", "category": "reporters:state_regional", "reporter": "A.2d", "year": 1965, "opinion_index": 1 }, { "cite": "89 N.J.Super. 234", "category": "reporters:state", "reporter": "N.J. Super.", "case_ids": [ 330013 ], "year": 1965, "opinion_index": 1, "case_paths": [ "/nj-super/89/0234-01" ] }, { "cite": "82 N.M. 24", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5325997 ], "weight": 2, "opinion_index": 1, "case_paths": [ "/nm/82/0024-01" ] }, { "cite": "490 P.2d 968", "category": "reporters:state_regional", "reporter": "P.2d", "case_ids": [ 5341420 ], "opinion_index": 1, "case_paths": [ "/nm/83/0251-01" ] } ], "analysis": { "cardinality": 877, "char_count": 26336, "ocr_confidence": 0.647, "pagerank": { "raw": 2.2725228876492254e-07, "percentile": 0.7839229236916901 }, "sha256": "3accefc7b3c5c92264060900dc52b3e1c0fe0c591b8ba89fcb150355df1d5e65", "simhash": "1:c6a9f74bd15f9cb9", "word_count": 4313 }, "last_updated": "2023-07-14T17:09:20.437308+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "HENDLEY, J., concurs." ], "parties": [ "INTERNATIONAL MINERALS & CHEMICAL CORPORATION (IMC), Appellant, v. PROPERTY APPRAISAL DEPARTMENT, State of New Mexico, Appellee." ], "opinions": [ { "text": "OPINION\nWOOD, Chief Judge.\nThis appeal concerns the valuation for ad valorem tax purposes of a portion of the potash products of IMC (International Minerals & Chemical Corporation). \u2019 The dispute as to the valuation arose because of a formula used in arriving at the valuation. The specific issues are: (1) was the production involved subject to valuation for tax purposes under \u00a7 72-6-7.1, N.M. S.A. 1953 (Repl.Vol. 10, pt. 2, Supp.1971); (2) was the formula a method in general use under \u00a7 72-25-5, N.M.S.A.1953 (Repl. Vol. 10, pt. 2, Supp.1971); (3) was the formula a regulation under \u00a7 72-25-6, N.M. S.A.1953 (Repl.Vol. 10, pt. 2, Supp.1971); (4) was use of the formula prohibited because its use was a change in existing procedure; and (5) was the formula arbitrary ?\nThe potash products involved are sylvanite, also known as muriate, and langbeinite, also known as sulphate of potash magnesium. The processing of these items includes a sorting by size or grades. One of the results of this sorting is material called \u201cfines.\u201d The \u201cfines\u201d differ in two ways from the products that IMC sells on the market. They are a smaller particle size and they have a slightly lower potassium oxide content. IMC uses the \u201cfines\u201d as feed material in its postassium sulphate plant.\nSection 72-6-7.1, supra, required the state tax commission to value potash mineral property. However, \u00a7 72-25-3, N.M.S.A. 1953 (Repl.Vol. 10, pt. 2, Supp.1971) transferred this duty to the property, appraisal department. IMC protested the department\u2019s assessed value of the \u201cfines.\u201d The property appeal board, after a hearing, denied the protest. IMC appeals the decision of the property appeal board. See \u00a7\u00a7 72-25-10, 72-25-18 and 72-25-19, N.M. S.A.1953 (Repl.Vol. 10, pt. 2, Supp.1971).\nWas the production involved subject to valuation for tax purposes?\nSection 72-6-7.1(B), supra, provides that production from potash mineral property is to be valued \u201c. . . at fifty per cent [S0%] of marlcet value of the output of the property for the prior year. . . .\u201d The tax year involved is 1970. The output involved is the \u201cfines\u201d for 1969. The issue under this point concerns \u201cmarket value\u201d for tax purposes.\nIt is undisputed that the \u201cfines\u201d have no commercial market; further processing is required. That processing occurs in IMC\u2019s potassium sulphate plant. The valuation point involved here occurs prior to the processing; it occurs while the material exists as \u201cfines.\u201d Since there is no commercial market at this point, IMC infers that the fines may not be taxable because the valuation for tax purposes under \u00a7 72-6-7.1, supra, is based on \u201cmarket value.\u201d\nWe treat the portion of IMC which produces the \u201cfines\u201d as the seller and IMC\u2019s potassium sulphate plant as the buyer. As between this fictional seller and buyer there is an exchange value. The exchange value is the \u201cmarket value\u201d in this situation. Kaiser Steel Corporation v. Property Appraisal Department, (Ct.App.), 490 P.2d 968, decided September 3, 1971. The \u201cfines\u201d were to be valued for tax purposes under \u00a7 72-6-7.1, supra.\nWas the formula a method in general use?\nSection 72-25-5, supra, provides in part: \u201cWhen not otherwise determined by law, and without regard to ownership, the taxable value of property shall be determined by methods in general use. . . .\u201d The starting point for determining taxable value is market value. See \u00a7\u00a7 72-6-7.1, supra, and 72-25-2, N.M.S.A.1953 (Repl.Vol. 10, pt. 2, Supp.1971). The property appraisal department determined the market value of the \u201cfines\u201d for tax purposes by using a formula. IMC claims the formula was not a method in general use.\nThe details of the formula are not involved in this point; the issue is whether the formula was a method of valuation in general use. Findings of the property appeal board, supported by substantial evidence, are: Both IMC and Duval Corporation, another potash company, protested their assessments for the 1969 tax year. An agreement as to the assessments was reached with both companies. Iia the agreed assessments, the property appraisal department valued the \u201cfines\" by using the formula now disputed. For the 1970 tax year, Duval Corporation valued its \u201cfines\u201d by voluntarily using the formula in question. Duval Corporation also used this valuation as a \u201crepresentative market price\u201d of the \u201cfines\u201d in calculating its depletion allowance on its 1969 federal income tax.\nIn addition to these findings, the Duval Corporation witness testified that its valuation pursuant to the formula was the \u201crepresentative market price theory;\u201d that use of this theory was acceptable practice; that there are other acceptable practices ; that these different acceptable practices are those allowed under the Internal Revenue Code in connection with depletion allowances. We do not consider the \u201cacceptable practices\u201d under the federal Internal Revenue Code as a valuation method determined by New Mexico law to be used for our State tax. These acceptable practices under federal law are, however, evidence of a method in general use.\nThe foregoing evidence supports the conclusion of the property appeal board that the formula used in determining market value of the \u201cfines\u201d was a method in general use in determining taxable value.\nWas the formula a regulation?\nSection 72-25-6(A), supra, provides in part: \u201cUnless a specific method for appraising property is provided by law, the department shall adopt regulations for appraising each kind of property in the state. ...\u201d Section 72-25-8, N.M.S.A.1953 (Repl.Vol. 10, pt. 2, Supp.1971) sets forth a procedure for'adopting regulations. It is undisputed that the property appraisal department did not follow the procedure of \u00a7 72-25-8, supra, before utilizing the questioned formula.\nThe issue is whether the' formula is to he classified as a regulation. IMC contends the formula amounts to a regulation because it is a device for appraising its property; that is, a method used in determining the taxable value of its property. See \u00a7 72-25-2, supra.\nThe property appraisal department makes two'responses. First, it asserts that no regulation is required if a specific method for appraising property is provided by law. The department asserts \u00a7 72-6-7.1, supra, provides a-specific method. We do not consider this response because it does not appear that this theory was presented t\u00f3 the property appeal board. It may not change its theory of the case on appeal. Board of Education v. State Board of Education, 79 N.M. 332, 443 P.2d 502 (Ct.App.1968). Second, it contends that \u201cfines\u201d do not amount to a \u201ckind of property\u201d within the meaning of \u00a7 72-25-6(A), supra.\nWe agree with IMC to this extent \u2014the formula is a method used in appraising the \u201cfines.\u201d It does not follow, however, that a \u201cregulation,\u201d adopted pursuant to statutory procedure, was required before the formula could be used. Regulations are required for appraising \u201ceach kind of property.\u201d \u201cKind\u201d is not defined in the statute. Accordingly, it is to be given its ordinary meaning. Albuquerque Nat. Bank v. Commissioner of Revenue, 82 N.M. 232, 478 P.2d 560 (Ct.App.1970).\nOne of the definitions of \u201ckind\u201d as a noun in Webster\u2019s New Third International Dictionary (1966) is \u201ccategory\u201d or \u201cclass.\u201d Black\u2019s Law Dictionary (1951) indicates \u201ckind\u201d means a \u201cgeneric class\u201d and defines \u201cin kind\u201d as \u201cin the same kind, class, or genus.\u201d We hold \u201ckind of property\u201d in \u00a7 72-25-6(A), supra, means general categories or generic classes of property. Compare Alabama By-Products Corporation v. Patterson, 258 F.2d 892 (5th Cir. 1958), cert. denied, 358 U.S. 930, 79 S.Ct. 318, 3 L.Ed.2d 303 (1959); Fleming v. Commissioner of Internal Revenue, 241 F.2d 78 (5th Cir. 1957), rev\u2019d, Commissioner of Internal Revenue v. P. G. Lake, Inc., 356 U.S. 260, 78 S.Ct. 691, 2 L.Ed.2d 743 (1958). The property appraisal department is not required, under \u00a7 72-25-6 (A), supra, to adopt regulations for specific or individual types of property within general categories or generic classes of property.\nIn this case we are not concerned with regulations for appraising the general category of potash mineral property. See \u00a7 72-6-7.1(B), supra. The issue involves a particular type of potash mineral property; specifically, \u201cfines.\u201d We hold that the property appraisal department\u2019s use of the formula in determining the market value of the \u201cfines\u201d was not a regulation within the meaning of \u00a7 72-25-6(A), supra.\n'Was use of the formula prohibited because its use was a change in existing procedure?\nSection 72-25-6(H), supra, states: \u201cAll existing orders, rulings, regulations which have been' filed 'with' the state records center, and existing procedures of the state tax commission shall be continued in full force and effect until revoked, superseded or amended by the department; Provided however, that no public hearing shall be required on the repeal of regulations in effect prior to the \"date of this act.\u201d\nThe issue under this point concerns \u201cexisting procedures of the' state tax commission.\u201d The' authority, powers and duties of the state tax' 'commission were transferred to the property appraisal department effective'February 26, 1970. See '\u00a7 72-25-3, supra, \u00e1nd Laws 1970, ch. 31, \u00a7 23. IMC contends that the existing procedure of the state tax commission on that date was to value the \u201cfines\u201d at $17.65 per K20 ton. IMC asserts this valuation must be used and not the valuation derived from the formula.'\nThe evidence is to the effect that the $17.65 per K20 ton valuation for the \u201cfines\u201d is an arbitrary figure. Even though arbitrary, nevertheless it was the valuation used by the state tax commission through the. 1968 tax year. In addition, there is evidence that the state tax commission was using the $17.65 per K2O ton valuation in connection with the 1969 tax year. We will assume that .this valuation was an existing procedure of the state tax commission. At the time the property appraisal department succeeded the state tax commission (February 26, 1970), the valuation for the 1969 tax year was under protest. The compromise settlement for the 1969 taxes was reached later in 1970. This settlement did not use the $17.65 per K20 ton valuation; rather, the \u201cfines\u201d were valued according to the formula. The dates involved show the formula was employed by the property appraisal department and not by the state tax commission.\nThus, under the assumption that the $17.65 per IC20 ton valuation was an existing procedure, this valuation was the existing procedure under the state tax commission. The change to the formula occurred under the property appraisal department.\nIMC seems to assert that the valuation procedure in existence on February 26, 1970 must be applied. The inference is that no change may be made in an existing procedure. Section 72-25-6(H), supra, is to the contrary. Existing procedures were continued but only until revoked, superseded or amended.\nIMC also seems to contend that the $17.65 per K20 ton procedure had not been revoked, superseded or amended. The property appeal board found, however, that the valuing procedure by the-property appraisal department for the \u201cfines\u201d in the 1969 tax year was through use of the formula. This formula having superseded the $17.65 per K20 ton valuation procedure for the 1969 tax year, the $17.65 per K20 ton valuation was not an existing procedure for the 1970 tax year.\nAlthough the property appraisal department used the formula in valuing the \u201cfines\u201d in the compromise settlement for the 1969 tax year, IMC asserts it did not agree to the formula. It contends it only agreed to the overall settlement 'figure and argues that \u201c . . .it would not be proper to hold that Appellant [IMC] had in fact agreed to the assessment of the feed material [the fines] on the basis of the formula used. . . . \u201d This argument mistakes the finding of the property appeal board. It did not find that IMC agreed to use of the formula. It found that IMC agreed to an assessment in which the property appraisal department used the formula in valuing the \u201cfines.\u201d The significance of this finding is that the $17.65 per K20 ton valuation was not used in the 1969 tax settlement. It had been superseded.\nWe hold therefore that \u00a7 72-25-6(H), \u2022supra, did not require the property appraisal department to use the $17.65 per K2O ton valuation for the 1970 tax year.\nWas the formula arbitrary?\nOne of the statutory grounds for setting aside the decision of the property appeal board is that the decision is arbitrary. Section 72-25-19 (H) (6), supra. IMC contends the decision is arbitrary because the formula was used in determining the market value of the \u201cfines.\u201d IMC\u2019s position is based on the fact that the sylvanite and langbeinite are graded by particle size. There are \u201ccoarse\u201d particles .and \u201cstandard\u201d particles, and the resultant \u201cfines.\u201d There is a difference in the market price for \u201ccoarse\u201d and \u201cstandard\u201d and no commercial market for the \u201cfines.\u201d IMC asserts the formula does not consider the difference in price based on par\u2022ticle size and for this reason is arbitrary.\nThe formula used \u201c . . . the average value per ton of the potash products sold in the market as either coarse or standard sized sylvanite and langbeinite, adjusted downward to account for the slightly lesser potassium oxide content. ...\u201d The result was considered to be the market value of the \u201cfines,\u201d and was so found by the property appeal board. The issue here is not the adjustment for the lesser potassium oxide content. The issue is \u201caverage value\u201d used in the formula when that average is based on \u201ccoarse\u201d and '\u201cstandard\u201d sizes of the ore.\nIf something is \u201carbitrary\u201d it is \u201cnot . . . according to reason or judgment.\u201d Webster\u2019s Third New International Dictionary, supra, Black\u2019s Law Dictionary, supra. Duval Corporation voluntarily used the formula in valuing the \u201cfines\u201d for its 1970 taxes. There is evidence that the \u201cfines\u201d are \u201c . . . more closely associated with the standard grade than with the other two grades.\u201d The two grades, \u25a0or particle sizes, other than \u201cstandard\u201d and \u201cfines\u201d are \u201ccoarse\u201d and \u201cgranular.\u201d There is evidence that \u201c . . . the \u25a0figures you used for the products sold on the market, the figures 'o\u2019f the- K20 content does indicate . . - 7 .-that 'you adjusted it for. grade, differential by taking an average;., ..... . \u201d We need go no further than this evidence that the average value of market sales indicates an adjustment for the differences in grades or sizes. With this evidence we cannot say, as a matter of law, that the formula was arbitrary.\nThe order of .the property appeal board denying IMC\u2019s protest is affirmed.\nIt is so ordered.\nHENDLEY, J., concurs.", "type": "majority", "author": "WOOD, Chief Judge." }, { "text": "SUTIN, Judge\n(dissenting).\nI respectfully dissent.\nIt would not be helpful to the public, to industry, or to the legal profession to describe the methods used in- the potash' industry to produce \u201cfines.\u201d The problems presented are: (1) Are the-fines taxable? (2) If they are taxable, what is the proper method of determining the taxable value of these fines which have no commercial market value ? These \u201cfines\u201d are processed and used by International Minerals & Chemical Corporation (IMC). as feed material to create a marketable product.\nA conglomeration of statutes is involved. An Act Relating to State Tax Commission, \u00a7 72-6-1 to \u00a7 72-6-20, including \u00a7 72-6-7.1, N.M.S.A.1953 (Repl.Vol. 10, pt. 2, Supp.), the Property Appraisal Department Act, \u00a7 72-25-1 to \u00a7 72-25-21, N.M.S.A.1953 (Repl. Vol. 10, pt. 2, Supp.), the Severance Tax Act, \u00a7 72-18-1 to \u00a7 72-18-4, N.M.S.A.1953 (Repl.Vol. 10, pt. 2, Supp.).\nOne principle of statutory construction must be remembered and emphasized. It is stated in Field Enterprises Education Corporation v. Commissioner of Revenue, 82 N.M. 24, 474 P.2d 510 (Ct.App.1970), as follows:\nAny doubtful meaning or intent of a tax statute must be resolved against the State and in' favor of the taxpayer. We cannot extend \"the applicability- of ' the statute beyond a clear import of the language used therein.\n(1) Are the \"Fines\u201d Taxable?\nSections 72-6-7.1 B and D read as follows :\nPotash mineral property shall be valued by the state tax commission as follows: * * * * * *\nB. The commission shall value the production from potash mineral property at fifty per cent [50% ] of market value of the output of the property for the prior year. . . . The valuation of such production shall be in lieu of valuations of minerals in place or of any interest therein. [Emphasis added.]\n* * * * * *\nD. The method of valuation herein prescribed is exclusive, and no other valuation, assessment, or tax based thereon, shall be made, fixed or levied against potash mineral property for purposes of ad valorem taxation. Any other ad valor-em tax on potash mineral property is void. [Emphasis added.]\nSection 72-6-7.1, supra, is a \u201ctax relief package.\u201d See 10 Natural Resources Journal 415, July 1970. We assume that \u201cfines\u201d are a portion of the \u201coutput\u201d from production of potash mineral property.\nThe above statute says that \u201cmarket value\u201d is the exclusive method of valuation.\nThe majority opinion states that \u201cThe exchange value is the \u2018market value\u2019 in this situation.\u201d Kaiser Steel Corporation v. Property Appraisal Department, 490 P.2d 968 (Ct.App.), decided September 3, 1971. Kaiser said that exchange value:\n\u201c . . .is determined by the demand for it in relation to the supply, and is proved, when possible, by actual sales. . . . \u201d The steel mill\u2019s demand for the mine\u2019s supply shows an exchange value exists, but that demand does not determine what the value is. The fact that the steel mill took almost 96% of the mine run coal in 1968 and over 91% of the mine run coal in 1969, does not show that it took, or would have taken, the coal as a willing buyer. .\nIf that rule were applied to IMC, this case would be reversed. The majority did not apply it.\nThere is no valid distinction between \u201cmarket value\u201d for sales purposes and market value for tax purposes. McCrory Stores Corp. v. City of Asbury Park, 89 N.J.Super. 234, 214 A.2d 526 (1965).\nSection 72-25-5, N.M.S.A.1953 (Repl.Vol. 10, pt. 2, Supp.) provides:\nWhen not otherwise determined by law, and without regard to ownership, the taxable value of property shall be determined by methods in general use. [Emphasis added.]\nNote that this section seeks methods of valuation other than market value. Is this contrary to \u00a7 72-6-7.1(D), supra?\nSection 72-25-6(A), N.M.S.A.1953 (Repl. Vol. 10, pt. 2, Supp.) provides:\nUnless a specific method for appraising property is provided by law, the department shall adopt regulations for appraising each kind of property in the state. Such regulations shall contain findings of fact upon which the method of appraisal is based and a detailed description of the method of appraisal of such property. [Emphasis added.]\nSection 72-25-8(A) provides that \u201cNo regulation may be adopted, amended or repealed without a public hearing before the director.\u201d\nFrom the foregoing statutes, how do we decide whether \u201cfines\u201d are taxable since they have no commercial market value and simply pass from one process of IMC to its plant?\nThere are three methods provided for determining taxable value: (1) by determining market value; (2) \u201cby methods in general use\u201d; and (3) by departmental regulations where no specific method is provided. These methods are in direct conflict, and they will be separately discussed and interpreted.\nIt requires a genius in the art of statutory construction to decide this issue.\nPursuant to \u00a7 72-6-4(1) (c), the Department shall determine the \u201cactual value\u201d of mineral property as defined in \u00a7 72-6-7 and \u00a7 72-6-7.1.\nUnder Article VIII, Section 1 of the State Constitution, the term \u201cvalue\u201d of tangible property means \u201creasonable cash market value\u201d if there are sales of comparable property. If there are no comparable sales, and property has no such \u201cmarket value,\u201d then other elements may be used which furnish proper criteria for consideration in determining value of real property. Hardin v. State Tax Commission, 78 N.M. 477, 432 P.2d 833 (1967).\nSince \u201cfines\u201d have no market value, how do we determine the elements which may be considered in determining value? None are provided by statute. The majority opinion adopted the phrase \u201cmethods in general use.\u201d\nWhat is meant by the words : \u201cWhen not otherwise provided by law, the taxable value of property shall be determined by methods in general use\u201d?\nIf we want to stretch its meaning, we can say when property has no market value, the Department can state the criteria to be furnished to determine taxable value by methods in general use. What is meant by the phrase \u201cmethods in general use\u201d?\nThe phrase \u201cin general use\u201d is scarce in judicial decisions anywhere. In New Mexico, it is found in \u00a7 59-10-7 (B), N.M. S.A.1953 (Repl.Vol. 9, pt. 1), the safety device statute of workmen\u2019s compensation. When we apply its meaning to \u201cmethods in general use\u201d to determine taxable value, the phrase means \u201ca method generally used in the particular potash industry that produces and uses \u2018fines\u2019.\u201d See Dickerson v. Farmer\u2019s Electric Coop., Inc., 67 N.M. 23, 350 P.2d 1037 (1960).\nIn Jones v. International Minerals and Chemical Corporation, 53 N.M. 127, 202 P.2d 1080 (1949), the defendant is IMC in this tax case. Justice McGhee said:\n. we do not think that the use by one employer when there are three engaged in the same industry establishes the \u201cgeneral use\u201d required by the statute.\nIn Apodaca v. Allison & Haney, 57 N.M. 315, 258 P.2d 711 (1953), Justice McGhee, in a dissenting opinion, said in effect that the burden is on the Department to establish that the general use of a method is by a majority of those engaged in the industry.\nThe Department found that its assessment against IMC was based on a similar assessment made against Duval Corporation. This does not constitute a majority of the industry and is not a method in general use. The Supreme Court has said that the fact that another similar industry has used a different method of severing wires \u201cdoes not thereby amount to proof that the wires were safety devices in general use under the statute.\u201d [Emphasis by the court.] Hicks v. Artesia Alfalfa Growers\u2019 Association, 66 N.M. 165, 344 P.2d 475 (1959).\nThe Department has no powers by statute to roam about in the area of methods \u201cin general use\u201d to determine the taxable value of \u201cfines.\u201d It also adopted an appraisal method used under the United States Internal Revenue Code which method was not adopted in the Property Appraisal Department Act. It was set forth in a draft bill. See 10 Natural Resources Journal 415.\nThe \u201cfines\u201d were not taxable by the method used by the Department.\n(2) If \u201cFines\" are Taxable, What is the Proper Method to Determine Market Value?\nLet us assume in passing that \u201cfines\u201d are taxable because elements can be established to determine \u201cexchange value.\u201d What is the proper method to use? The second method is set forth in \u00a7 72-25-6(A), supra. There is no specific method provided bylaw for appraising property, for finding the criteria by which market value can be determined. Under this situation, the Department must adopt a regulation to establish the criteria. It failed to do so. It created a formula of' its own. I-t set forth the criteria by \u2022 which it \u201carrived at a representative market value for the feed material.\u201d This formula is invalid. It had a duty to establish this criteria by a regulation after a public hearing.\nThe majority opinion has decided that \"Regulations are required for appraising \u2018each kind of property\u2019,\u201d and \u201cfines\u201d do not fall' in this class:\nIn \u00a7 72-25-2(A), the word \u201cappraise\u201d is defined as follows:\n\u201c[A]ppraise\u201d means the .method, of determining the taxable value of property for property taxation. [Emphasis added.]\nSection 72-25-2 (E) says that \u201cproperty\u201d means \u201ctangible property.\u201d The phrase \u201ctangible property\u201d is not defined. \u201cTangible property\u201d is that which may be felt or touched, and is necessarily corporeal, although it may be either real or personal. H. D. & J. K. Crosswell, Inc. v. Jones, 52 F.2d 880, 883 (D.C.S.C.1931). See 73 C.J.S. Property \u00a7 5.\nIf we apply the above definitions to \u00a7 72-25-6(A), supra, it would read:\nUnless a specific method for determining the taxable value of 'tangible property for taxation is provided by law, the department shall adopt regulations for determining the taxable value of tangible property for taxation of each kind of tangible property in the state. [Emphasis added.]\nThere is no specific method for determining taxable value.\nThe only remaining question is: Are \u201cfines\u201d a kind of tangible property?\n\"Fines\u201d are a kind of tangible property. They are corporeal and can be felt and touched. They stand in a class of their own' \u2014 a mineral class. \u201cEach kind of tangible property\u201d means each class whether called minerals, realty, goods or vegetables, etc. There is doubt between members of the court as to the meaning of \u201ceach kind of property.\u201d Therefore, this phrase should be construed against the state and in favor of IMC.\nThis court does not have the judicial power to emasculate the ordinary language of statutes in order to increase taxation on industry. The power to tax \u201cfines\u201d rests in the regulatory power of the Department. After it has first determined that \u201cfines\u201d have no market value, then it may appraise the taxable value by a formula adopted by way of regulation.\nThe statute does not define \u201cmarket value.\u201d It is interesting to note that the 1971 New Mexico Legislature amended the Severance Tax Act by defining the \u201cGross Value of potash products.\u201d Section 72 \u2014 18\u2014 2.1, N.M.S.A.1953 (Repl.Vol. 10, pt. 2, Supp.).\nSince the Department. failed to adopt a formula regulation, the fines are not taxable.\nHowever, IMC contends that it should pay a tax on \u201cfines\u201d pursuant to a previous formula used by the State Tax Commission. Since it desires to pay a tax, I would conclude that this tax should be paid.", "type": "dissent", "author": "SUTIN, Judge" } ], "attorneys": [ "Clarence E. Hinkle, Hinkle, Bondurant, Cox & Eaton, Roswell, for appellant.", "David L. Norvell, Atty. Gen., Anne K. Bingaman, Asst. Atty. Gen., Santa Fe, for appellee." ], "corrections": "", "head_matter": "492 P.2d 1265\nINTERNATIONAL MINERALS & CHEMICAL CORPORATION (IMC), Appellant, v. PROPERTY APPRAISAL DEPARTMENT, State of New Mexico, Appellee.\nNo. 670.\nCourt of Appeals of New Mexico.\nDec. 3, 1971.\nRehearing Denied Dec. 27, 1971.\nCertiorari Denied Jan. 18, 1972.\nClarence E. Hinkle, Hinkle, Bondurant, Cox & Eaton, Roswell, for appellant.\nDavid L. Norvell, Atty. Gen., Anne K. Bingaman, Asst. Atty. Gen., Santa Fe, for appellee." }, "file_name": "0402-01", "first_page_order": 528, "last_page_order": 536 }