On April 27, Bernalillo County Assessor Damian Lara filed a 15 page, 5 count civil Complaint for Declaratory Judgment and Injunctive Relief against Bernalillo County Treasurer Tim Eichenberg in State District Court. The civil complaint alleges:
- Eichenberg willfully and knowingly violated his obligations of his office as Treasurer.
- Eichenberg usurped the authority and duties of County Assessor Damian Lara.
- Eichenberg placed his own personal interests for financial gain above his duty to the public.
The April 27 civil complaint concerns the reclassification of 1,047 properties from residential to non-residential in 2025 that unilaterally were reversed by Treasurer Eichenberg without legal authority after the tax roll had been presented to the Office of the Treasurer by the Assessor. At the core of the legal battle waged against Treasurer Eichenberg is how short-term rental properties should be classified for property tax purposes. The lawsuit alleges Treasurer Eichenberg unilaterally and without legal authority changed property reclassifications from commercial property made by Assessor Lara back to residential property for tax purposes. The civil complaint seeks to prevent Eichenberg’s unilateral altering of property values and classifications which resulted in lost revenues of nearly $1.8 million in taxpayer dollars.
The lawsuit is asking the District Court to declare that the conduct and actions of Defendant Eichenberg in changing property classifications from commercial to residential were beyond his legal power and authority. The lawsuit seeks a declaratory judgment that Eichenberg has a “conflict of interest” that precludes him from taking any official act for any property owner represented by a company known as “NM Property Tax” (NMPT) which he or family members have an interest in and that Eichenberg has benefited personally.
ASSESSOR LARA FILES MOTION FOR PRELIMINARY INJUNCTION
On May 4, it was announced in a press release that Bernalillo County Assessor Damian Lara filed a motion pleading in State District Court for immediate relief through a preliminary injunction in the civil complaint against Bernalillo County Treasurer Tim Eichenberg. Assessor Lara is petitioning the Second Judicial District Court to restrain Bernalillo County Treasurer Tim Eichenberg and his staff and office from the ability to change the classification, valuation, or assessment of any property on the 2026 property schedule. Assessor Damian Lara said this:
“Treasurer Eichenberg changed property values in 2025 and has recently declared, publicly, he intends to change them again. The courts must stop him to protect the integrity of a fair and equitable tax system for property owners.”
Assessor Lara has said that because of Treasurer Eichenberg’s action, Bernalillo County lost roughly $1.8 million in tax revenue. There is direct tax impact to other taxing entities that have set budgets based on the assessed values generated by the Office of the Assessor.
Assessor Lar is asking the court to enjoin Treasurer Eichenberg from issuing further communications, in his official capacity, falsely representing that he has the authority to reclassify and revalue property. Bernalillo County Assessor Damian Lara said this:
“The Office of the Assessor has the authority to set property values for all properties within Bernalillo County. We will continue to follow the law. … The Bernalillo County Protest Board has issued orders upholding the Assessor’s value and classification, but the Treasurer has, thus far, ignored those orders.”
CONTENTS OF ASSESSOR’S MOTION FOR PRELIMINARY INJUNCTION
Following is a summary of the substantive arguments made in the Motion For Preliminary Injunctive gleaned from the pleading document itself:
EDITOR’S NOTE: Paragraph numbers, some legal citations and attachments have been deleted with bold highlights and captions added or made by the editor for the sake of clarity and brevity for the reader.
INTRODUCTION
The introduction of the Motion for a Preliminary Injunction filed by Assessor Lara against Treasurer Eichenberg alleges that in 2025, Treasurer Eichenberg unlawfully altered the tax assessments of approximately 1,047 properties, changing their classification from commercial to residential, which in turn reduced their property tax. In a Press Release issued on April 24, 2026, Treasurer Eichenberg announced that if “similar errors are discovered on 2026 property tax bills, he will exercise that same statutory authority to resolve them” thereby expressing publicly his intent to do it again.
The Treasurer has publicly declared his intent to overrule the actions of the County Assessor relying on state statute NMSA 1978, § 7-38-77. The state statute does not authorize the Treasurers actions in 2025 and he proposes to act without legal authority again in 2026. In doing so, he explicitly identified the statute he intends to invoke. He has identified the conduct he intends to repeat. He has also identified that he intends to act when he receives the 2026 property tax rolls. The Assessor now seeks injunctive relief, before the 2026 schedule is improperly changed and [seeks to] enjoin the Treasurer from carrying out his publicly stated unlawful intentions.
The Treasurer’s 2025 conduct, explained in detail in the complaint, provides the basis for this request. He accessed the certified tax schedule and unilaterally reverted approximately 1,047 properties from commercial to residential, including properties whose owners had already lost protests before the County Valuation Protest Board. He has now publicly confirmed that he did so under his asserted state statute § 7-38-77 authority and has announced he will do so again. Without injunctive relief, the 2026 certified roll will be altered the same way without any protest, court order, or directive. It will be based on his “difference of opinion” as to classification, which state statute § 7-38-77(B) expressly excludes from a treasurer’s authority.
FACTUAL BACKGROUND
After Assessor Damian Lara’s 2025 reclassification of 1,047 short-term rental properties from residential to commercial, the Assessor delivered the certified tax schedule to the Treasurer Eichenberg as required by state statute NMSA 1978, § 7-3836. After delivery of the tax schedule the Treasurer Eichenberg accessed the County’s tax database and unilaterally reverted all 1,047 properties to residential. Treasurer Eichenberg acted without protest determination or appeal, court order, or directive from the State of New Mexico Property Tax Division. The Treasurer also did not abide by final adverse Protest Board rulings against seven New Mexico Property Tax (NMPT) clients whose properties he reverted from commercial back to residential.
On April 24, 2026, the Bernalillo County Treasurer’s Office issued [a] Press Release. In it, the Treasurer confirms that in 2025, after the Assessor reclassified short-term rental properties, the Treasurer “used his statutory authority to ‘correct errors’ (NMSA 1978, 7-38-77) to reverse the reclassification.” The Press Release also states that “[i]f similar errors are discovered on 2026 property tax bills, he will exercise that same statutory authority to resolve them.”
The Press Release articulates the legal theory underlying [the Treasurer’s] planned action, namely that the Assessor lacks authority to classify short-term rentals as nonresidential because the Property Tax Code does not define “short-term rental,” and that any such reclassification is “unlawful, premature and erroneous.” The Treasurer invites property owners to contact the Treasurer’s Office directly “[f]or any questions regarding short-term rental classification on their 2026 property tax bill.”
The Press Release removes any doubt that the threatened conduct is concrete and imminent. Treasurer Eichenberg did not speculate about what he might do. The Treasurer has publicly committed in writing to unlawfully supersede the Assessor’s duties.
This litigation for a Declaratory Judgment likely will continue after the 2026 Tax Schedule is prepared and delivered by the Assessor to the Treasurer. The Treasurer should not be allowed to once again take an illegal act with grievous consequences.
LEGAL AUTHORITY ARGUMENTS MADE
The request for an injunction against Treasurer Eichenberg asserts a number of legal arguments citing state statutes. Those legal arguments are as follows:
PROPERTY TAX CODE REJECTS TREASURERS’ REVERSAL OF ASSESSORS CLASSIFICATIONS.
The Treasurer’s announced 2026 plan to reverse the Assessor’s classification and valuation of short-term rental properties relies on the theory that NMSA 1978, § 7-38-77 authorizes the Treasurer to “correct errors” in the Tax Schedule. The allegation made is that the Property Tax Code’s plain language rejects the Treasurer’s theory.
CLASSIFICATION AND VALUATION AUTHORITY IS VESTED EXCLUSIVELY IN THE ASSESSOR.
The Property Tax Code grants responsibility and authority to the Assessor for the valuation of all property at issue subject to valuation. (State statute NMSA 1978, § 7-36-2.) Properties are presumed non-residential, and the burden rests on the property owner to establish residential use. (State statute NMSA 1978, § 7-38-17.1.) The Assessor’s valuation and classification carry a statutory presumption of correctness. (State statute NMSA 1978, § 7-38-6.) The Treasurer is given no statutory role in classification or valuation.
STATE STATUTE NMSA 1978 7-38-77 DOES NOT AUTHORIZE THE TREASURER’S CHANGE OF CLASSIFICATION OR VALUE.
The Treasurer’s authority over the certified tax roll is narrow and ministerial. State statute NMSA 1978 § 7-38-77 enumerates limited circumstances for correction of “obvious errors” on the schedule. Subsection (B) of the statute expressly excludes from the term “obvious errors” any disagreement over methodology of valuation or value and states:
“[T]he term “obvious errors” as used in this section does not include the method used to determine the valuation for, or a difference of opinion in the value of, the property subject to property taxation. (State Statute NMSA 1978, § 7-38-77(B)).”
THE TREASURER’S ANNOUNCED PLAN IS TO AGAIN REVERSE THE ASSESSOR’S CLASSIFICATION OF SHORT TERM RENTAL PROPERTIES BECAUSE THE TREASURER BELIEVES THE UNDERLYING INTERPRETATION IS “UNLAWFUL, PREMATURE AND ERRONEOUS.”
This statement clearly explains that the Treasurer’s justification is a difference of opinion about classification methodology, not the correction of a clerical or ministerial error. That is a textbook example of what subsection (B) excludes. The Treasurer’s own pronouncement thus identifies the express statute he intends to violate and the act he intends to take to violate it.
HOUSE MEMORIAL 52 CONFERS NO AUTHORITY ON THE TREASURER.
The Treasurer’s Press Release references 2025 House Memorial 52, but a memorial is not a statute. (N.M. Const. art. IV.) House Memorial 52 created no legal rights nor duties. House Memorial 52 requested a study and asked assessors to suspend reclassification voluntarily. It did not amend the Property Tax Code, did not redefine the terms “residential” or “nonresidential,” and did not transfer classification authority from the Assessor to the Treasurer.
TREASURER EICHENBERG ARGUES THAT THE LEGISLATURE HAS NOT YET ENACTED LEGISLATION THAT WOULD SPECIFICALLY CREATE A FORM OF COMMERCIAL PROPERTY REGULATION TITLED “TAXATION OF SHORT-TERM RENTALS IN RESIDENTIAL ZONES”.
While that is true, it has no impact on the authority of the Assessor to properly assess all properties in his County, whether or not specifically identified by Statute. Furthermore, the Legislature has already acted in allowing a local tax on short term rentals.
Under State statute NMSA 1978 §§ 3-38-13 et seq, the legislature made changes in 2020 to ensure inclusion of short term rentals under local authority to impose a Lodger’s Taxes. The two sections that now include short term rentals as taxable property for purposes of lodgers taxes begin with NMSA 1978 § 338-14 G. which defines taxable premises as, “ …a hotel, motel or other premises used for lodging that is not the vendor’s household or primary residence.”
State statute NMSA 1978 § 3-38-16 A. (1) exempts taxation of a vendee whom, “has been a permanent resident of the taxable premises for a period of at least thirty consecutive days, unless those premises are temporary.” The effect of this legislation is to extend lodgers taxation to residences used primarily for a commercial lodging use, which is the criteria the Assessor applied in this Property Tax context. There is simply no legislative limit placed on the Assessor to identify commercial uses of property and tax them accordingly.
THE EXCLUSIVE REMEDY FOR A PROPERTY OWNER TO CHALLENGE A VALUATION OR CLASSIFICATION CHANGE IS BY FILING A PROTEST OR ACTION IN DISTRICT COURT.
In this matter, the Assessor exercised his statutory duty to determine how to assess properties that he discovered were being used as short term rental properties as their primary use.
If a property owner is aggrieved by such revaluation and reclassification, they may file a protest of the classification and valuation changes to a protest board or file a direct action in State District Court for a refund. (State statutes NMSA 1978 §§ 7-38-21 and 7-38-40.) If a protest is unsuccessful a property owner may appeal to State District Court. (State statutes NMSA 1978 § 7-38-28 referring to §39-3-1.1.)
There is no remedy provided in Statute for a property owner to request the Treasurer to alter their valuation or classification.
TREASURER EICHENBERG HAS USURPED THE ASSESSOR’S AUTHORITY TO VALUE AND CLASSIFY PROPERTY.
Treasurer Eichenberg has usurped the authority of the property owners to have their rights legally adjudicated to reduce their valuation or to reverse the reclassification of their property as commercial. The Treasurer acted beyond his legal power and authority (ultra vires) and acted illegally to subvert the authority of the Assessor, the County, the property owners and the Court.
THE ASSESSOR HAS AN ANNUAL DUTY TO MAINTAIN PROPER PROPERTY VALUATIONS.
The Treasurer argues that only the State Legislature may determine how the Assessor should exercise his statutory authority to classify properties that had historically been residences, if they change their primary use to commercial short term rental use. No such limitation is provided for in State Statute, nor could it be.
In our ever-changing world, it is the Assessor that has the duty to recognize when any property fallen out of residential use and become used primarily commercially. Annual maintenance of current and correct value of properties is the Assessor’s statutory duty. ( State statute NMSA 1978 § 7-36-16.) Specifically, the statute provides Assessors “shall also implement a program of updating property values so that current and correct values of property are maintained and shall have the sole responsibility and authority at the county level for property valuation maintenance, subject only to the general supervisory powers of the Director.”
There has been no direction from the State Director of Taxation and Revenue as of the date of filing of the motion that the Assessor has a duty to reclassify a property to non-residential from residential if, by a change in use, it has become a commercial property. In fact, the Assessor would be in direct violation of his duty to annually maintain correct values of property with such changes in use.
THE COUNTY AND THE ASSESSOR WILL SUFFER IRREPARABLE HARM ABSENT INJUNCTIVE RELIEF.
The 2025 record of Treasurer Eichenberg’s actions demonstrates the harm that occurred when the Treasurer altered the certified roll. The 2026 announcement guarantees those harms will reoccur unless the Court intervenes.
UNLAWFUL AMENDMENT OF THE CERTIFIED 2026 TAX SCHEDULE.
The 2026 Tax Schedule will be delivered by the Assessor to the Treasurer on October 1, 2026 as required by statute. (State statute NMSA 1978, § 7-38-36.) The Press Release commits to change that Schedule based on his classification disagreement. Once altered, the Schedule cannot be made whole by money damages. Tax bills will be issued based on an incorrect schedule and affected members of the public will rely on the incorrect bills. The harm to the accuracy of the official record of taxable property is inherently irreparable.
UNDERMINING THE PROTEST PROCESS.
The Property Tax Code creates two avenues to dispute property classifications. New Mexico state statute §7-38-21 creates a protest process and state statute §7-38-25 a refund action. The Treasurer’s proposed correction to the tax schedule in 2026 circumvents both.
By inviting taxpayers in a press release to contact the Treasurer’s Office for relief, the Treasurer encourages owners to skip the statutory protest process and engage an extra-statutory remedy that the Treasurer has no authority to create. In 2025 similar actions transpired as owners withdrew protests in apparent reliance on the Treasurer’s representations that he could “correct” their bills unilaterally.
Without injunctive relief, the 2026 protest process will be undermined the same way, and 2026 owners will lose timely administrative remedies they may not be able to recover after the fact. This usurpation of power effects the legal rights of effected tax payers to get legal remedies available, and divests the judicial branch from exercising its authority for judicial review of administrative acts.
CONTINUED USURPATION OF THE ASSESSOR’S STATUTORY DUTIES.
The Assessor’s exclusive authority over classification is itself a protected interest. An elected officer’s ability to perform the duties of office cannot be quantified in dollars, and the Treasurer continuing to act beyond his legal power and authority (ultra vires) interference inflicts ongoing institutional harm.
LOSS OF COUNTY REVENUE.
The 2025 reclassifications by Treasurer Eichenberg projected County revenue reductions by approximately $1.8 million. A Similar revenue loss for 2026 can be anticipated based on the Treasurer’s Press Release. Although revenue can in principle be quantified, the Treasurer’s Office does not have the funds to make up for any shortfalls. Additionally, the harm is not just enumerated in dollars it also is the distortion of the tax process upon which County operations depend.
THE BALANCE OF EQUITIES FAVORS THE ASSESSOR.
The injunction the Assessor seeks would require the Treasurer to do nothing more than comply with the law. The Treasurer would retain all authority NMSA 1978, §7-38-77 grants him. Further, affected property owners retain the lawful remedies the Code provides them. They can protest under State statute NMSA 1978, §7-38-21 or seek refund action under state statute NMSA 1978, §7-38-25.
The injunction sought in no way interferes with the rights of property owners. A failure to grant an injunction however would undermine the Assessor’s duly elected position and the authority granted by the legislature to maintain a program of updating property values. As the New Mexico Supreme Court succinctly said, “[s]imply put, the county assessor is in charge; it is the responsibility of that office to get the job done. (Robinson v. Bd. of Comm’rs of Cnty. of Eddy, 2015-NMSC-035, ¶ 11, 360 P.3d 1186, 1189).
The status quo is clearly to uphold the law as it is written. The relief requested here would simply keep the current law in place until the Court can rule on the merits of this case.
THE PUBLIC INTEREST STRONGLY FAVORS INJUNCTIVE RELIEF.
The public interest is served by the lawful and uniform administration of the property tax system. The public interest is disserved by an elected officer, acting outside of his statutory authority, seeking to overrule the lawful actions of the County Assessor.
The Treasure’s Press Release’s invitation to taxpayers to bypass the Code’s protest mechanisms and seek relief directly from the Treasurer’s Office … magnifies the public-interest concern because it misinforms the public to participate in an extra-statutory remedy the Treasurer has invented wholesale.
THE PUBLIC ALSO HAS AN INTEREST IN PREVENTING THE USE OF PUBLIC OFFICE FOR PRIVATE BENEFIT.
The conflict-of-interest concerns set forth in the civil complaint filed by the Assessor persist into 2026. The same official who has a financial interest in NM Property Tax, Inc., a private tax appeals firm, has now committed to apply his “correct errors” theory to 2026 bills. The public interest in preventing that conduct, and in restoring the lawful allocation of authority between Assessor and Treasurer, is at its highest.
SWEEPING RELIEF SOUGHT. County Assessor Damion Lara seeks the following sweeping preliminary injunction relief from the court against County Treasurer Tim Eichenberg:
- Enjoining Treasurer Tim Eichenberg and his staff from altering, modifying, or reversing the classification, valuation, or assessment of any property on the 2026 property tax schedule, or any subsequent tax year’s schedule, except as expressly authorized by NMSA 1978, § 7-38-77 and allowing only the narrow category of clerical and ministerial errors that subsection (B) of that statute permits.
- Enjoining the Treasurer Tim Eichenberg from invoking, or directing his office to invoke, to “correct errors” to reverse, modify, or override any classification or valuation determination made by the Assessor or any final determination of the County Valuation Protest Board.
- Enjoining the Treasurer Tim Eichenberg from issuing further communications, in his official capacity, that represents that he possesses the authority to reclassify and revalue property or to override such determinations of the Assessor or the Protest Board.
- Directing the Treasurer Tim Eichenberg and Assessor Damon Lara to take the necessary legal steps to restore to the County’s tax database the nonresidential classifications of the approximately 1,047 properties unilaterally reverted to residential for tax year 2025.
HEARING ON MOTION YET TO BE SCHEDULED
Attorneys representing Bernalillo County Assessor Damian Lara have submitted a request for hearing on the Motion for Preliminary Injunction. A hearing has yet to be scheduled by the District Court.
COMMENTARYN AND ANALYSIS
Bernalillo County Assessor Damian Lara was correct and stands on solid legal authority to reclassify short-term rental property as commercial property for purposes of taxation. Bernalillo County Assessor Damian Lara and the Assessor’s Office did its due diligence and undertook the lengthy and exhaustive annual process of reclassification of properties that was fair and reasonable.
Treasurer Tim Eichenberg’s has said that under state law he is allowed as Bernalillo County Treasurer to “correct obvious errors” to the property tax schedule, including errors of property classification. Eichenberg’s position is a very warped interpretation of the law and not based in reality.
Eichenberg’s actions, if proven true by the civil litigation, were a clear attempt to usurp the legal authority of County Assessor Damian Lara and nothing more than political interference with the duties and responsibilities of the County Assessor.
County Assessor Damian Lara had no choice but to go to court to prohibit Eichenberg from interfering with Lara’s duties and responsibilities as County Assessor and seeking injunctive relief.