HOUSE BILL 602
47th legislature - STATE OF NEW MEXICO - first session, 2005
INTRODUCED BY
Gail C. Beam
AN ACT
RELATING TO MUNICIPALITIES; ENACTING THE NEIGHBORHOOD IMPROVEMENT DISTRICT ACT; PROVIDING FOR THE CREATION OF NEIGHBORHOOD IMPROVEMENT DISTRICTS; PROVIDING FOR SPECIAL ASSESSMENTS AGAINST PROPERTY IN A DISTRICT TO FUND IMPROVEMENTS AND THE MAINTENANCE OF IMPROVEMENTS; PROVIDING FOR THE INVESTMENT OF MONEY COLLECTED FROM THE ASSESSMENTS; MAKING AN APPROPRIATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 13 of this act may be cited as the "Neighborhood Improvement District Act".
Section 2. [NEW MATERIAL] PURPOSE.--The purpose of the Neighborhood Improvement District Act is to empower neighborhoods to take initiative in the commencement, acquisition, construction or maintenance of those specific improvements desired by the neighborhoods and that the neighborhoods agree to finance by a special assessment against the property benefited by the improvements.
Section 3. [NEW MATERIAL] DEFINITIONS.--As used in the Neighborhood Improvement District Act:
A. "council" means the governing body of the municipality in which a district or a proposed district is located;
B. "district" means a neighborhood improvement district organized or proposed to be organized pursuant to the provisions of the Neighborhood Improvement District Act;
C. "enabling ordinance" means an ordinance enacted by a council pursuant to Section 5 of the Neighborhood Improvement District Act that enables districts to be created in the municipality and prescribes the procedures, conditions and standards to be followed in creating and operating districts;
D. "improvement" means a facility, service, activity or project that will benefit a district and is authorized or approved by ordinance of the council. "Improvements" may include:
(1) services and activities, such as security services, promotion of public events, concerts in public areas, economic development promotions, street and sidewalk cleaning, trash removal and graffiti removal;
(2) public facilities, such as pocket parks, open spaces, hiking and biking trails, public art, walkways, pathways, public lands, public buildings, ponds, parking facilities, benches, booths, kiosks, display cases, pedestrian shelters, informative signs, trash receptacles, public restrooms, decorations and banners;
(3) transportation-related facilities or projects, such as streets, roads, bridges, curbs, gutters, sidewalks, median strips, planting strips, speed bumps and street lights; and
(4) the beautifying, landscaping or hardscaping of any of the improvements described in Paragraphs (1) through (3) of this subsection, including the use of earthworks, structures, lands and other water features, plants, trees and related water delivery systems;
E. "mayor" means:
(1) the mayor of a municipality that has a mayor-council form of government; or
(2) the governing body of a municipality that does not have a mayor-council form of government; and
F. "valuation increment funding" means a funding mechanism based on an assessment applied to the increased valuation of a parcel of property over a base value as established in an enabling ordinance.
Section 4. [NEW MATERIAL] ONLY PUBLIC IMPROVEMENTS AUTHORIZED.--All improvements commenced, acquired, constructed or maintained pursuant to the Neighborhood Improvement District Act shall be on a public right of way or public easement; provided, however, that an improvement may be located on private property if it directly and primarily benefits a public right of way or public easement.
Section 5. [NEW MATERIAL] ENABLING ORDINANCE REQUIRED.--A district may be created in a municipality only if the council has enacted an enabling ordinance specifying the procedures, conditions and standards to be used in creating and operating a district. The enabling ordinance:
A. shall specify the procedures, conditions and standards, in addition to those required in the Neighborhood Improvement District Act, to be followed and applied in the creation of a district, including:
(1) acceptable purposes for a district;
(2) time frames for submitting petitions, studying the feasibility of a proposed district, holding public hearings and reaching a final decision regarding the creation of a district;
(3) information required in a petition proposing a district that will enable the council to reach a decision on the necessity and benefits of the district;
(4) standards and procedures for determining the geographical areas for districts; and
(5) additional factors to be addressed in a study of a proposed district;
B. shall specify and delineate the responsibilities of a management committee of a district in establishing and operating a district and the responsibilities of the municipality concerning the district;
C. may, in addition to the petition method of creating a district, provide for the creation of a district by a land developer who has filed a final plat; provided that, upon the sale of more than fifty percent of the lots within the development, the management committee shall be appointed as provided in Section 9 of the Neighborhood Improvement District Act;
D. may, as an alternative to Section 9 of the Neighborhood Improvement District Act, provide that the council, rather than a management committee, shall manage a district and, if so, may deduct management costs from district revenue;
E. may, pursuant to Subsection B of Section 8 of the Neighborhood Improvement District Act, provide for valuation increment funding and provide how revenue accruing through the valuation increment method shall be expended;
F. may provide how revenue received from the creation of a district, including revenue from assessments, valuation increment revenues or increased gross receipts tax revenues, shall be expended;
G. may provide for improvements to be jointly commenced, acquired, constructed or maintained by both a district and the municipality;
H. may provide for improvements to be owned by the municipality, by the district or jointly between the municipality and the district;
I. may provide for assessments of a district to include a charge to establish a reserve fund for the purpose of making emergency expenditures consistent with the purpose of the district;
J. shall provide procedures for collecting assessments from owners of parcels within a district and procedures for foreclosing on the property of delinquent payers; and
K. may contain such other procedures, conditions or standards for districts as are consistent with the provisions of the Neighborhood Improvement District Act.
Section 6. [NEW MATERIAL] DISTRICT--CREATION--PETITION--STUDY.--
A. The majority of the owners of the taxable parcels of real property within a proposed district, exclusive of real property owned by the United States, the state or any of its subdivisions, may petition the council for the creation of a district. The petition shall include:
(1) the proposed boundaries of the district;
(2) a general description of the initial improvements to be commenced, acquired or constructed by the proposed district;
(3) the estimated costs of the proposed improvements;
(4) the estimated initial annual assessment and the four subsequent annual assessments against each parcel within the proposed district;
(5) the maximum amount of benefit estimated to be conferred on each parcel of land lying within the proposed district; and
(6) such other information as identified in the enabling ordinance as necessary for the proper evaluation of the petition.
B. After receipt of a petition by the council, the mayor shall cause to be prepared and submitted to the council a study of the proposed district. The study shall include:
(1) the estimated costs of the proposed improvements;
(2) considering the property that will primarily benefit from the improvements, a conclusion of whether the proposed boundaries of the district are reasonable and, if not, a recommendation for alternative district boundaries;
(3) the estimated initial annual assessment and the four subsequent annual assessments against each parcel within the district;
(4) additional considerations and information required by the enabling ordinance; and
(5) such other information as the council needs in order to determine whether the creation of the district is in the best interests of the residents and property owners of the district.
Section 7. [NEW MATERIAL] DISTRICT--CREATION--PUBLIC HEARING.--
A. After receipt of the study pursuant to Section 6 of the Neighborhood Improvement District Act, the council shall hold a public hearing on the proposed district.
B. Notice of the hearing shall be mailed to affected real property owners within the proposed district and reasonably ascertainable residents of the proposed district and other interested persons. In addition, notice shall be published once each week for three successive weeks in a newspaper of general circulation in the municipality in which the proposed district lies, with the last publication being at least three days before the date of the hearing. The notice shall contain:
(1) the time and place of the hearing;
(2) the initial improvements proposed for the district;
(3) the estimated cost of the improvements;
(4) the proposed boundaries of the district; and
(5) a preliminary estimate of the initial assessments that will be made against each parcel of real property in the district.
C. A resident, real property owner or other interested person shall be given the opportunity to appear at the public hearing and present views on the creation of the district as proposed in the notice.
D. Upon completion of the hearing, the council shall adopt an ordinance creating the district or shall reject the creation of the district.
E. If the creation of a district is rejected by the council, another petition for creation of the district shall not be submitted pursuant to the Neighborhood Improvement District Act within twelve months following the rejection.
Section 8. [NEW MATERIAL] DISTRICT--CREATION--ORDINANCE.--
A. An ordinance creating a district shall be consistent with the enabling ordinance and shall include:
(1) a list of the initial improvements to be provided by the district;
(2) the cost of the initial improvements;
(3) a description of the real property included in the district;
(4) the assessment method to be used to finance improvements of the district;
(5) the amount of the initial assessment to be imposed upon each real property owner and an estimate of assessments for the subsequent four tax years;
(6) a description of how the district will be managed and, if the district is to be managed by a managing committee, the terms of members, method of appointment, reporting requirements and other duties of the management committee; and
(7) a description of the methods to be used to account for district costs and revenues and how district revenues will be disbursed to the district for improvements and the maintenance of improvements.
B. If permitted in the enabling ordinance, the ordinance may provide for valuation increment funding of the district pursuant to the following procedures:
(1) upon approval of a district, the municipality shall notify the county assessor and the taxation and revenue department of the approval and of the identification of the parcels of real property within the district subject to taxation under the Property Tax Code;
(2) upon receipt of notification pursuant to Paragraph (1) of this subsection, the county assessor and the taxation and revenue department shall identify the parcels of property within the district within their respective valuation jurisdictions and at the time tax rates are certified under the Property Tax Code shall certify to the county treasurer the net taxable value of the property as of January 1 of the year in which the notification was made. This certified value is the "base value" for the distribution of property tax revenues authorized by the Property Tax Code under the valuation increment method;
(3) the amount by which the general property tax revenue received from the tax on property within a district exceeds that which would have been received by application of the same rates to the base value before inclusion in the district shall be credited to the municipality and used as provided in the enabling ordinance and the ordinance creating the district. The remaining revenue shall be distributed to participating units of government as authorized by the Property Tax Code; and
(4) the procedures and methods specified in this subsection shall be followed annually for an initial period of five years following the date of notification of inclusion of property as coming under the provisions of this subsection and for any subsequent five-year periods that are established by ordinance of the council.
Section 9. [NEW MATERIAL] MANAGEMENT COMMITTEE--CREATION--DUTIES.--
A. For a district with a management committee, the committee shall be responsible for the operation of a district, including the commencement, acquisition, construction or maintenance of district improvements. The members of the management committee shall be appointed pursuant to the provisions of the enabling ordinance and the ordinance creating the district; provided, however, that one member shall be appointed by and represent the mayor and the remaining members shall be real property owners or residents of the district.
B. The management committee shall prepare and file annually with the council for its review and approval a budget and progress report for the district.
C. The management committee shall administer all improvements within the district.
D. The management committee shall recommend the annual assessment to be made by the council.
E. The management committee shall file annually with the council a report of the district activities for the preceding fiscal year, which report shall include a complete financial statement setting forth its assets, liabilities, income and operating expenses as of the end of the fiscal year and the benefits of the district's program to the real property owners of the district.
F. The management committee shall be a nonprofit corporation created pursuant to the Nonprofit Corporation Act.
Section 10. [NEW MATERIAL] ADDITIONAL IMPROVEMENTS.--
A. The initial improvements authorized in the ordinance creating the district may be commenced, acquired, constructed or maintained by the management committee, and the council may approve assessments for such improvements and the maintenance thereof, including assessments for increased costs necessary to adjust for inflation, to maintain an existing level of service, to correct faults, to make repairs and to meet future regulatory requirements.
B. Except as allowed in Subsection A of this section, no additional improvements shall be made, no additional costs shall be incurred and no additional assessments shall be issued by the district unless a petition, signed by a majority of the owners of the taxable parcels of real estate within the district and requesting the additional improvements or costs and the associated assessments, is filed with the council.
Section 11. [NEW MATERIAL] ANNUAL ASSESSMENT--SPECIAL ACCOUNT--DISTRIBUTION.--
A. The council, upon recommendation of the management committee, may periodically assess a neighborhood improvement benefit fee upon all real property, exclusive of any real property owned by the United States or the state or any of its political subdivisions, located within the district. The council may make reasonable classifications regarding real property owners located within the district but the assessment shall be based on the taxable valuation distributed by the county assessor. The assessment shall be collected by the treasurer of the county in which the district is located and shall be in addition to any other municipal-imposed license fees or other taxes, fees or other charges assessed or levied for the general benefit and use of the municipality.
B. All money received by the municipality from the district assessment shall be held in a special account and distributed as provided in the enabling ordinance and the ordinance creating the district.
C. The money held for the benefit of the district shall be distributed to the management committee pursuant to rules and guidelines established by the council.
Section 12. [NEW MATERIAL] ASSESSMENTS--TERMS OF PAYMENT--LIENS--FORECLOSURE.--
A. The council shall by ordinance:
(1) establish the time and terms of paying the neighborhood improvement benefit fee or installments on the fee;
(2) set any rate or rates of interest upon deferred payments of the fee, which shall commence from the due date as prescribed in the ordinance;
(3) fix penalties to be charged for delinquent payment of an assessment;
(4) establish procedures and guidelines for the classification of property for the fee;
(5) set a reasonable charge to recover the municipality's expense for the assessment, collection and administration of the fee; and
(6) provide for the control and investment and order the expenditure of all money pertaining to the district.
B. The assessment, together with any interest or penalty accruing to the assessment, is a lien upon the parcel of land. The lien is coequal with the lien for property taxes. C. Within sixty days after the due date for the payment of an assessment, the mayor shall record in the office of the county clerk a claim of lien for any unpaid amount due and assessed against a parcel of land.
D. A parcel assessed shall not be relieved from the assessment or lien by the sale of the parcel of land for general taxes or any other assessment. A delinquent assessment has the effect of a mortgage and shall be foreclosed and sold in the manner provided by law for the foreclosure of mortgages on real estate.
Section 13. [NEW MATERIAL] DISTRICT REVIEW.--The council shall review each district every five years to determine whether the district should remain in existence. If a majority of the council decides that the purpose for which the district was created has been served and that it is in the best interest of the district, the council shall terminate the district. If upon termination of a district there is an outstanding balance in the district's account, the council shall expend or refund the balance in a manner that benefits the real property owners in the district.
Section 14. Section 6-10-10.1 NMSA 1978 (being Laws 1988, Chapter 61, Section 2, as amended) is amended to read:
"6-10-10.1. SHORT-TERM INVESTMENT FUND CREATED--DISTRIBUTION OF EARNINGS--REPORT OF INVESTMENTS.--
A. There is created in the state treasury the "short-term investment fund". The fund shall consist of all deposits from governmental entities and Indian tribes or pueblos that are placed in the custody of the state treasurer for short-term investment purposes pursuant to this section. The state treasurer shall maintain a separate account for each governmental entity and Indian tribe or pueblo having deposits in the fund.
B. If a local public body is unable to receive payment on public money at the rate of interest as set forth in Section 6-10-36 NMSA 1978 from financial institutions within the geographic boundaries of the governmental unit, then a local public finance official having money of that local public body in [his] the official's custody not required for current expenditure may, with the consent of the appropriate local board of finance, if any, remit some or all of such money to the state treasurer for deposit for the purpose of short-term investment as allowed by this section.
C. Before local funds are invested or reinvested for the purpose of short-term investment pursuant to this section, the local public body finance official shall notify and make such funds available to banks, savings and loan associations and credit unions located within the geographical boundaries of their respective governmental unit, subject to the limitation on credit union accounts. To be eligible for such funds, the financial institution shall pay to the local public body the rate established by the state treasurer pursuant to a policy adopted by the state board of finance for such short-term investments.
D. The local public body finance official shall specify the length of time a deposit shall be in the short-term investment fund, but in any event the deposit shall not be made for more than one hundred eighty-one days. The state treasurer through the use of the state fiscal agent shall separately track each such deposit and shall make such information available to the public upon written request.
E. The state treasurer shall invest the short-term investment fund as provided for state funds under Section 6-10-10 NMSA 1978 in investments with a maturity at the time of purchase that does not exceed three hundred ninety-seven days. The state treasurer may elect to have the short-term investment fund consolidated for investment purposes with the state funds under the control of the state treasurer; provided that accurate and detailed accounting records are maintained for the account of each participating entity and Indian tribe or pueblo and that a proportionate amount of interest earned is credited to each of the separate government accounts. The fund shall be invested to achieve its objective, which is to realize the maximum return consistent with safe and prudent management.
F. At the end of each month, all net investment income or losses from investment of the short-term investment fund shall be distributed by the state treasurer to the contributing entities and Indian tribes or pueblos in amounts directly proportionate to the respective amounts deposited in the fund and the length of time the amounts in the fund were invested. The state treasurer shall charge participating entities, Indian tribes and pueblos reasonable audit, administrative and investment expenses to be paid directly from their net investment income for the investment and administrative services provided pursuant to this section.
G. As used in this section, "local public body" means a political subdivision of the state, including school districts and post-secondary educational institutions.
H. In addition to the deposit of funds of local public bodies, the state treasurer may also accept for deposit, deposit and account for, in the same manner as funds of local public bodies, funds of the following governmental entities if the governing authority of the entity approves by resolution the deposit of the funds for the short-term investment:
(1) the agricultural commodity commission
established under the Agricultural Commodity Commission Act;
(2) the Albuquerque metropolitan arroyo flood control authority established under the Arroyo Flood Control Act;
(3) the business improvement district management committee established under the Business Improvement District Act;
(4) the New Mexico community development council established under the New Mexico Community Assistance Act;
(5) the governing authority of only special districts authorized under Chapter 73 NMSA 1978;
(6) the board of trustees established under the Economic Advancement District Act;
(7) the board of directors of a corporation or foundation established under the Educational Assistance Act;
(8) a board of directors established under the Flood Control District Act;
(9) the New Mexico hospital equipment loan council established under the Hospital Equipment Loan Act;
(10) the authority established under the Industrial and Agricultural Finance Authority Act;
(11) the authority established under the Las Cruces Arroyo Flood Control Act;
(12) the authority established under the Mortgage Finance Authority Act;
(13) the authority established under the Municipal Mortgage Finance Act;
(14) the authority established under the Public School Insurance Authority Act;
(15) the authority established under the Southern Sandoval County Arroyo Flood Control Act;
(16) a board of trustees established under the Special Hospital District Act;
(17) the authority established under the New Mexico Finance Authority Act; [and]
(18) the corporation established under the Small Business Investment Act; and
(19) a neighborhood improvement district management committee established under the Neighborhood Improvement District Act.
I. In addition to the deposit of funds of local public bodies, the state treasurer may also accept for deposit and deposit and account for, in the same manner as funds of local public bodies, funds of any Indian tribe or pueblo in the state if authorized to do so under a joint powers agreement executed by the state treasurer and the governing authority of the Indian tribe or pueblo under the provisions of the Joint Powers Agreements Act."
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