1. A. Money received by the department from the sale of real or personal property for delinquent property taxes shall be deposited in a suspense fund and distributed as follows in the order provided:

   1. (1) first, that portion equal to the costs shall be retained by the department for use, subject to appropriation by the legislature, in administration of the Property Tax Code;
   2. (2) second, that portion equal to the penalties and interest due shall be retained by the department for use, subject to appropriation by the legislature, by the department in administration of the Property Tax Code [Chapter 7, Article 1 NMSA 1978];
   3. (3) third, that portion equal to the delinquent taxes due shall be remitted by the department to the appropriate county treasurer for distribution by the treasurer to the governmental units in accordance with the law and the regulations of the department of finance and administration;
   4. (4) fourth, if the former owner of the property sold is a delinquent taxpayer pursuant to Section 7-1-16 NMSA 1978, that portion equal to any delinquent amount for any tax program administered by the department pursuant to Section 7-1-2 NMSA 1978 shall be retained by the department to satisfy the delinquent amount; and
   5. (5) fifth, the balance shall be paid to the former owner of the property sold or to any other person designated by order directed to the department by a court of competent jurisdiction, provided that the department may first apply all or any portion of the balance to be paid against the amount of any property tax, including any penalty and interest related thereto, owed by the person to whom the balance would otherwise be paid.
2. B. As a condition precedent to payment of the balance of the sale amount received to the former owner of the property, the department may require any person claiming to be entitled to that payment to present sufficient evidence of proof of former ownership of the property to the department. The department shall adopt regulations providing for the procedures to be followed by persons claiming sale proceeds as former owners in those instances where conflicting claims exist or the department requires proof of ownership.
3. C. If no person claims the balance of sale proceeds as the former owner of the property within two years of the date of the sale and after a reasonable search to determine the former owner is made by the department and no former owner is found, the balance of the sale proceeds shall be considered abandoned property and deposited in accordance with the provisions of the Uniform Unclaimed Property Act (1995) ) [Chapter 7, Article 8A NMSA 1978].
4. D. If the balance of proceeds from the sale after paying a higher priority claim under Subsection A of this section is insufficient to pay all of the next priority claim, then the complete balance shall be applied to that next priority claim as partial payment.

History: 1953 Comp., § 72-31-71, enacted by Laws 1973, ch. 258, § 111; 1979, ch. 61, § 1; 1982, ch. 28, § 26; 1986, ch. 20, § 117; 1990, ch. 22, § 10; 1995, ch. 12, § 14; 2026, ch. 31, § 15.

ANNOTATIONS

The 2026 amendment, effective July 1, 2026, authorized the taxation and revenue department to apply excess property tax auction proceeds to outstanding tax debt; in Subsection A, in the introductory clause, after "as follows" added "in the order provided", added a new Paragraph A(4) and redesignated former Paragraph A(4) as Paragraph A(5), and in Paragraph A(5), after the paragraph designation, added "fifth"; and in Subsection C, after "sale proceeds" deleted "whether the property was sold under the provisions of the Property Tax Code or prior law", and after "Uniform Unclaimed Property Act" added "(1995)".

The 1995 amendment, effective June 16, 1995, rewrote Paragraph A(1) which read "first, that portion equal to the expenses of seizure and sale shall be retained by the department and these amounts are appropriated to the department for use in administration of the Property Tax Code" and made stylistic changes in Paragraph A(2).

The 1990 amendment, effective May 16, 1990, in Subsection A, rewrote Paragraph (2) which read "second, that portion equal to the penalties and interests due shall be remitted by the department, to the appropriate county treasurer for deposit in the county general fund" and added the proviso at the end of Paragraph (4) and, in Subsection C, substituted "Uniform Unclaimed Property Act" for "Uniform Disposition of Unclaimed Property Act".

A tax sale may be invalidated and rescheduled if not conducted substantially in accordance with the tax code so long as the deed has not yet been issued and delivered to the purchaser. — Where, after a three-year period of nonpayment of delinquent property taxes by the owner of a ten-acre parcel of land located in Santa Fe county, the taxation and revenue department (department) placed the property up for sale at public auction, and where the department complied with the notice requirements of 7-38-66 and 7-38-67(B) NMSA 1978, but on the day before the auction, a department employee mistakenly notified the department personnel charged with preparing the next day's auction that the taxes on the parcel at issue had been paid and that the parcel should be removed from the list of properties for sale, and where, on the day of the auction, certain potential bidders left the auction after they were notified that the property would not be sold that day, and where the parcel was placed on a list of properties removed from the auction for a short period of time, but was returned to the auction list after the county treasurer's office informed the department that payment of delinquent taxes had not been made, and where the property was then sold to purchaser, the sole bidder, for the minimum price of $17,100, the amount of taxes, penalty, interest and costs owed to the state, and where, two days after the tax sale, the department invalidated the tax sale for not substantially complying with the requirements of the tax code after learning from a potential bidder that she had left the auction in reliance on the department's announcement and subsequent assurances that the parcel would not be sold on the day of the auction, and where purchaser filed a petition for writ of mandamus in district court, asking the court to order the department to issue a tax deed for the parcel, the district erred in entering a peremptory writ of mandamus ordering the department to issue a tax deed, because the parcel was not sold substantially in compliance with the public auction requirement of the tax code when the property was sold without recognizing the property owner's interest and right to receive any amount generated at public auction in excess of the debt to the state, and by announcing at the outset of the auction that the parcel would not be sold that day, the department essentially negated the prior notice to potential purchasers required by 7-38-67(B) NMSA 1978 and undermined the legislature's purpose in requiring a public auction to increase the sale price. Dearborn v. Clarke, 2024-NMCA-002.