2004 Senate Bill text for SB0478

SENATE BILL 478

46th legislature - STATE OF NEW MEXICO - second session, 2004

INTRODUCED BY

Richard M. Romero

AN ACT

RELATING TO LOCAL GOVERNMENTS; PROVIDING FOR THE CREATION OF METROPOLITAN REDEVELOPMENT DISTRICTS; ALLOWING THE IMPOSITION OF PROPERTY ASSESSMENTS FOR THOSE DISTRICTS; PROVIDING FOR REVENUE INCREMENT BONDS, ANTICIPATION BONDS AND REFUNDING BONDS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. Section 3-60A-1 NMSA 1978 (being Laws 1979, Chapter 391, Section 1) is amended to read:

"3-60A-1. SHORT TITLE.--[This act] Chapter 3, Article 60A NMSA 1978 may be cited as the "Metropolitan Redevelopment Code"."

Section 2. Section 3-60A-4 NMSA 1978 (being Laws 1979, Chapter 391, Section 4, as amended) is amended to read:

"3-60A-4. DEFINITIONS.--As used in the Metropolitan Redevelopment Code:

A. "public body" means a municipality, board, commission, authority, district or [any] other political subdivision or public body of the state;

B. "local governing body" means the city council, [or] city commission [of a city, the] or board of trustees of a [town or village] municipality; the [council of an incorporated county; or the] board of county commissioners of [an H class] a county; or the governing board of a district;

C. "mayor" means the mayor or the chairman of the [city commission] local governing body or other officer or body having the duties customarily imposed on the head of a municipality;

D. "municipality" means [any] an incorporated city, town or village, whether incorporated under general act, special act or special charter, an incorporated county, [or] an H class county or a district;

E. "clerk" means the clerk or other official of the municipality who is the chief custodian of the official records of [the] a municipality;

F. "federal government" includes the United States of America or [any] an agency or instrumentality, corporate or otherwise, of the United States;

G. "state" means the state of New Mexico;

H. "slum area" means an area within the area of operation in which there are numerous residential or nonresidential buildings, improvements and structures [whether residential or nonresidential, which, by reason of its dilapidation, deterioration, age, obsolescence] that are dilapidated, deteriorated, aged or obsolete or that have inadequate provision for ventilation, light, air or sanitation or the area lacks open spaces or has a high density of population or overcrowding or [the existence of] there exists in the area conditions that endanger life or property by fire or other causes, and the area is conducive to ill health, transmission of disease, infant mortality, juvenile delinquency or crime and it is detrimental to the public health, safety, morals or welfare;

I. "blighted area" means an area within the area of operation other than a slum area that [because of the presence of a substantial number of deteriorated or deteriorating structures, predominance of defective or inadequate street layout, faulty lot layout in relation to size, adequacy, accessibility or usefulness, insanitary or unsafe conditions, deterioration of site or other improvements, diversity of ownership, tax or special assessment delinquency exceeding the fair value of the land, defective or unusual conditions of title, improper subdivision or lack of adequate housing facilities in the area or obsolete or impractical planning and platting or an area where a significant number of commercial or mercantile businesses have closed or significantly reduced their operations due to the economic losses or loss of profit due to operating in the area, low levels of commercial or industrial activity or redevelopment or any combination of such factors] substantially impairs or arrests the sound growth and economic health and well-being of a municipality or locale within a municipality or an area that retards the provisions of housing accommodations or constitutes an economic or social burden and is a menace to the public health, safety, morals or welfare in its present condition and use because of the presence of a substantial number of deteriorated or deteriorating structures; predominance of defective or inadequate street layout; faulty lot layout in relation to size, adequacy, accessibility or usefulness; insanitary or unsafe conditions; deterioration of site or other improvements; diversity of ownership; tax or special assessment delinquency exceeding the fair value of the land; defective or unusual conditions of title; improper subdivision; lack of adequate housing facilities in the area; or obsolete or impractical planning and platting or an area where a significant number of commercial or mercantile businesses have closed or significantly reduced their operations due to the economic losses or loss of profit due to operating in the area, low levels of commercial or industrial activity or redevelopment, or any combination of such factors;

J. "metropolitan redevelopment project" or "project" means an activity, undertaking or series of activities or undertakings designed to eliminate slums or blighted areas in areas designated as metropolitan redevelopment areas and [that] the activity or undertaking conforms to an approved plan for the area for slum clearance and redevelopment, rehabilitation and conservation;

K. "slum clearance and redevelopment" means the use of those powers authorized by the Metropolitan Redevelopment Code [for the purpose of eliminating] to eliminate slum areas and [undertaking] undertake activities authorized by the Metropolitan Redevelopment Code to rejuvenate or revitalize those areas so that the conditions that caused those areas to be designated slum areas are eliminated;

L. "rehabilitation" or "conservation" means the restoration and renewal of a slum or blighted area or portion thereof in accordance with [any] an approved plan by use of powers granted by the Metropolitan Redevelopment Code;

M. "metropolitan redevelopment area" means a slum area or a blighted area or a combination thereof that the local governing body so finds and declares and designates as appropriate for a metropolitan redevelopment project;

N. "metropolitan redevelopment plan" means a plan, as it exists from time to time, for one or more metropolitan redevelopment areas or for a metropolitan redevelopment project, which plan shall:

(1) seek to eliminate the problems created by a slum area or blighted area;

(2) conform to the general plan for the municipality as a whole; and

(3) be sufficient to indicate the proposed activities to be carried out in the area, including [but not limited to] any proposals for land acquisition; proposals for demolition and removal of structures; redevelopment; proposals for improvements, rehabilitation and conservation; zoning and planning changes; land uses, maximum densities, building restrictions and requirements; and the plan's relationship to definite local objectives respecting land uses, improved traffic patterns and controls, public transportation, public utilities, recreational and community facilities, housing facilities, commercial activities or enterprises, industrial or manufacturing use and other public improvements;

O. "real property" includes all lands, including improvements and fixtures thereon, and property of any nature appurtenant thereto or used in connection therewith and every estate, interest, right and use, legal or equitable, therein, including terms for years and liens by way of judgment, mortgage or otherwise;

P. "bonds" means any bonds, including refunding bonds, notes, interim certificates, certification of indebtedness, debentures, metropolitan redevelopment bonds or other securities evidencing an obligation and issued under the provisions of the Metropolitan Redevelopment Code or other obligations;

Q. "obligee" includes [any] a bondholder, agent or trustee for [any] a bondholder or lessor demising to the municipality property used in connection with a metropolitan redevelopment project or any assignee or assignees of such lessor's interest or any part thereof;

R. "person" means [any] an individual, firm, partnership, corporation, company, association, joint stock association or body politic or the state or any political subdivision [thereof] of the state and shall further include any trustee, receiver, assignee or other person acting in a similar representative capacity;

S. "area of operation" means the area within the corporate limits of the municipality and the area outside of the corporate limits but within five miles of such limits or otherwise on municipally owned property wherever located, except that it shall not include [any] an area that lies within the territorial boundaries of another municipality unless an ordinance has been adopted by the governing body of the other municipality declaring a need therefor;

T. "board" or "commission" means a board, commission, department, division, office, body or other unit of the municipality designated by the local governing body to perform functions authorized by the Metropolitan Redevelopment Code as directed by the local governing body; [and]

U. "public officer" means [any] a person who is in charge of [any] a department or branch of government of the municipality;

V. "district" means an independent metropolitan redevelopment project district created by resolution of a local governing body to perform functions authorized by the Metropolitan Redevelopment Code with respect to a project as specified in the resolution; and

W. "district board" means the board of the district."

Section 3. Section 3-60A-20 NMSA 1978 (being Laws 1979, Chapter 391, Section 20) is amended to read:

"3-60A-20. ALTERNATIVE METHOD OF FINANCING.--

A. Effective for tax years beginning on or after January 1, 1980, the local governing body [of a municipality] may elect by resolution to use the procedures set forth in the Tax Increment Law for financing metropolitan redevelopment projects. Such procedures may be used in addition to or in conjunction with other methods provided by law for financing such projects.

B. The tax increment method, for the purpose of financing metropolitan redevelopment projects, is the dedication for further use in metropolitan redevelopment projects of that increase in property tax or assessment revenue directly resulting from the increased net taxable value of a parcel of property attributable to its rehabilitation, redevelopment or other improvement because of its inclusion within an urban renewal, community development or metropolitan redevelopment project."

Section 4. Section 3-60A-21 NMSA 1978 (being Laws 1979, Chapter 391, Section 21, as amended) is amended to read:

"3-60A-21. TAX INCREMENT PROCEDURES.--The procedures to be used in the tax increment method are:

A. the local governing body [of the municipality] shall, at the time after approval of a metropolitan redevelopment project, notify the county assessor and the taxation and revenue department of the taxable parcels of property within the project;

B. upon receipt of notification pursuant to Subsection A of this section, the county assessor and the taxation and revenue department shall identify the parcels of property within the metropolitan redevelopment project within their respective jurisdictions and certify to the county treasurer the net taxable value of the property at the time of notification as the base value for the distribution of property tax revenues authorized by the Property Tax Code. If because of acquisition by the municipality the property becomes tax exempt, the county assessor and the taxation and revenue department shall note that fact on their respective records and so notify the county treasurer, but the county assessor, the taxation and revenue department and the county treasurer shall preserve a record of the net taxable value at the time of inclusion of the property within the metropolitan redevelopment project as the base value for the purpose of distribution of property tax revenues when the parcel again becomes taxable. The county assessor is not required by this section to preserve the new taxable value at the time of inclusion of the property within the metropolitan redevelopment project as the base value for the purposes of valuation of the property;

C. if because of acquisition by the municipality the property becomes tax exempt, when the parcel again becomes taxable, the local governing body [of the municipality] shall notify the county assessor and the taxation and revenue department of the parcels of property that because of their rehabilitation or other improvement are to be revalued for property tax purposes. A new taxable value of this property shall then be determined by the county assessor or by the taxation and revenue department if the property is within the valuation jurisdiction of that department. If no acquisition by the municipality occurs, improvement or rehabilitation of property subject to valuation by the assessor shall be reported to the assessor as required by the Property Tax Code, and the new taxable value shall be determined as of January 1 of the tax year following the year in which the improvement or rehabilitation is completed;

D. current tax rates shall then be applied to the new taxable value. The amount by which the tax or assessment revenue received exceeds that which would have been received by application of the same rates to the base value before inclusion in the metropolitan redevelopment project shall be credited to the municipality and deposited in the metropolitan redevelopment fund. This transfer shall take place only after the county treasurer has been notified to apply the tax increment method to a specific property included in a metropolitan redevelopment area. Unless the entire metropolitan redevelopment area is specifically included by the municipality for purposes of tax increment financing, the payment by the county treasurer to the municipality shall be limited to those properties specifically included. The remaining revenue shall be distributed to participating units of government as authorized by the Property Tax Code; and

E. the procedures and methods specified in this section shall be followed annually for a maximum period of twenty years following the date of notification of inclusion of property as coming under the transfer provisions of this section."

Section 5. Section 3-60A-23 NMSA 1978 (being Laws 1979, Chapter 391, Section 23, as amended) is amended to read:

"3-60A-23. TAX INCREMENT METHOD APPROVAL.--The tax increment method shall be applicable only to the units of government participating in property tax revenue derived from property within a metropolitan redevelopment project and approving the use of the tax increment method for that property and only to the extent of the approval. An approval may be restricted to certain types or sources of tax revenue. The local governing body [of each municipality] shall request such approval for up to a twenty-year period for property included in the tax increment funding. The governor or his authorized representative shall approve, partially approve or disapprove the use of the method for state government; the governing body of each other participating unit shall approve, partially approve or disapprove by ordinance or resolution the use of the method for their respective units. At the request of a participating unit of government, made within ten days of receipt of the request by the municipality, the municipality shall make a presentation to the governor or his authorized representative and to the governing bodies of all participating units of government, which presentation shall include a description of the metropolitan redevelopment project and the parcels in the project to which the tax increment method will apply, and an estimate of the general effect of the project and the application of the tax increment method on property values and tax revenues. All participating units shall notify the local governing body [of the municipality] seeking approval within thirty days of receipt of the municipality's request. At the expiration of that time, the alternative method of financing set forth in this section shall be effective for a period of up to twenty tax years."

Section 6. Section 3-60A-23.1 NMSA 1978 (being Laws 2000, Chapter 103, Section 4) is amended to read:

"3-60A-23.1. [TAX] REVENUE INCREMENT BONDS.--

A. For the purpose of financing metropolitan redevelopment projects, in whole or in part, a municipality may issue [tax] revenue increment bonds or [tax] revenue increment bond anticipation notes that are payable from and secured by real property taxes and assessments, in whole or in part, allocated to the metropolitan redevelopment fund pursuant to the provisions of Sections 3-60A-21 and 3-60A-23 NMSA 1978. The principal of, premium, if any, and interest on the bonds or notes shall be payable from and secured by a pledge of such revenues, and the municipality shall irrevocably pledge all or part of such revenues to the payment of the bonds or notes. The revenues deposited in the metropolitan redevelopment fund or the designated part thereof may thereafter be used only for the payment of the principal of, premium, if any, and interest on the bonds or notes, and a holder of the bonds or notes shall have a first lien against the revenues deposited in the metropolitan redevelopment fund or the designated part thereof for the payment of principal of, premium, if any, and interest on such bonds or notes. To increase the security and marketability of the [tax] revenue increment bonds or notes, the municipality may:

[(1) create a lien for the benefit of the bondholders on any public improvements or public works used solely by the metropolitan redevelopment project or portion of a project financed by the bonds or notes, or on the revenues of such improvements or works;

(2)] (1) provide that the proceeds from the sale of real and personal property acquired with the proceeds from the sale of bonds or notes issued pursuant to the Tax Increment Law shall be deposited in the metropolitan redevelopment fund and used for the purposes of repayment of principal of, premium, if any, and interest on such bonds or notes; and

[(3)] (2) make covenants and do any and all acts not inconsistent with law as may be necessary, convenient or desirable in order to additionally secure the bonds or notes or make the bonds or notes more marketable in the exercise of the discretion of the local governing body.

B. Bonds and notes issued pursuant to this section shall not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction, shall not be general obligations of the municipality, shall be collectible only from the proper pledged revenues and shall not be subject to the provisions of any other law or charter relating to the authorization, issuance or sale of [tax] revenue increment bonds or [tax] revenue increment bond anticipation notes. Bonds and notes issued pursuant to the Tax Increment Law are declared to be issued for an essential public and governmental purpose and, together with interest thereon, shall be exempted from all taxes by the state.

C. The bonds or notes shall be authorized by an ordinance of the municipality that is not a district or by resolution of the district board; shall be in such denominations, bear such date and mature, in the case of bonds, at such time not exceeding twenty years from their date, and in the case of notes, not exceeding five years from the date of the original note; bear interest at a rate or have appreciated principal value not exceeding the maximum net effective interest rate permitted by the Public Securities Act; and be in such form, carry such registration privileges, be executed in such manner, be payable in such place within or without the state, be payable at intervals or at maturity and be subject to such terms of redemption as the authorizing ordinance, resolution or supplemental resolution [or resolutions] of the [municipality] local governing body, as applicable, may provide.

D. The bonds or notes may be sold in one or more series at, below or above par, at public or private sale, in such manner and for such price as the [municipality] local governing body, in its discretion, shall determine; provided that the price at which the bonds or notes are sold shall not result in a net effective interest rate that exceeds the maximum permitted by the Public Securities Act. As an incidental expense of a metropolitan redevelopment project or portion thereof financed with the bonds or notes, the municipality in its discretion may employ financial and legal consultants with regard to the financing of the project.

E. In case any of the public officials of the municipality whose signatures appear on any bonds or notes issued pursuant to the Tax Increment Law shall cease to be public officials before the delivery of the bonds or notes, the signatures shall, nevertheless, be valid and sufficient for all purposes, the same as if the officials had remained in office until delivery. Any provision of law to the contrary notwithstanding, any bonds or notes issued pursuant to the Tax Increment Law shall be fully negotiable.

F. In any suit, action or proceeding involving the validity or enforceability of any bond or note issued pursuant to the Tax Increment Law or the security therefor, any bond or note reciting in substance that it has been issued by the municipality in connection with a metropolitan redevelopment project shall be conclusively deemed to have been issued for such purpose and the project shall be conclusively deemed to have been planned, located and carried out in accordance with the provisions of the Metropolitan Redevelopment Code.

G. The proceedings under which [tax] revenue increment bonds or [tax] revenue increment bond anticipation notes are authorized to be issued and any mortgage, deed of trust, trust indenture or other lien or security device on real and personal property given to secure the same may contain provisions customarily contained in instruments securing bonds and notes and constituting a covenant with the bondholders not inconsistent with this section.

H. A municipality may issue bonds or notes pursuant to this section with the proceeds from the bonds or notes to be used as other money is authorized to be used in the Metropolitan Redevelopment Code.

I. The municipality shall have the power to issue renewal notes, to issue bonds to pay notes and whenever it deems refunding expedient, to refund any bonds by the issuance of new bonds, whether the bonds to be refunded have or have not matured, and to issue bonds partly to refund bonds then outstanding and partly for other purposes in connection with financing metropolitan redevelopment projects, in whole or in part. Refunding bonds issued pursuant to the Tax Increment Law to refund outstanding [tax] revenue increment bonds shall be payable from real property tax and assessment revenues, out of which the bonds to be refunded thereby are payable or from other lawfully available revenues.

J. The proceeds from the sale of any bonds or notes shall be applied only for the purpose for which the bonds or notes were issued and if, for any reason, any portion of the proceeds are not needed for the purpose for which the bonds or notes were issued, the unneeded portion of the proceeds shall be applied to the payment of the principal of or the interest on the bonds or notes.

K. The cost of financing a metropolitan redevelopment project shall be deemed to include the actual cost of acquiring a site and the cost of the construction of any part of a project, including architects' and engineers' fees, the purchase price of any part of a project that may be acquired by purchase and all expenses in connection with the authorization, sale and issuance of the bonds or notes to finance the acquisition, and any related costs incurred by the municipality.

L. No action shall be brought questioning the legality of any contract, mortgage, deed of trust, trust indenture or other lien or security device, proceeding or bonds or notes executed in connection with any project authorized by the Metropolitan Redevelopment Code on and after thirty days from the effective date of the ordinance or, in the case of bonds issued by a district, the resolution authorizing the issuance of such bonds or notes.

M. No obligee shall have any right to cause the state or any political subdivision of the state to raise any tax rates or assessment rates on any property in connection with any bonds or notes issued pursuant to this section."

Section 7. A new section of the Metropolitan Redevelopment Code is enacted to read:

"[NEW MATERIAL] FORMATION OF DISTRICT.--

A. If a municipality other than a district creates a "metropolitan redevelopment project district", the local governing body shall cause a copy of the resolution creating the district to be delivered to the county assessor and the county in which the district is located and to the taxation and revenue department. A notice of the creation showing the number and date of the resolution and giving a description of the land included in the district shall be recorded with the county clerk of the county in which the district is located.

B. A district shall be a political subdivision of the state, separate and apart from the municipality whose local governing body created the district."

Section 8. A new section of the Metropolitan Redevelopment Code is enacted to read:

"[NEW MATERIAL] APPOINTMENT OF DIRECTORS--QUALIFICATIONS--TERMS.--

A. A district board shall be composed of seven members. The initial district board shall be selected as follows:

(1) one member shall be appointed by the local governing body that created the district;

(2) one member shall be appointed by the mayor of the municipality that created the district; and

(3) five members shall be appointed by the members appointed pursuant to Paragraphs (1) and (2) of this subsection.

B. The members of the district board appointed pursuant to Paragraphs (1) and (2) of Subsection A of this section shall serve six-year terms. Two of the members appointed pursuant to Paragraph (3) of Subsection A of this section shall serve six-year terms and three of the members appointed pursuant to that paragraph shall serve five-year terms. The terms of the five members appointed pursuant to Paragraph (3) of Subsection A of this section shall be determined by lot at the first meeting of the district board.

C. After the initial terms, members shall be elected by a majority vote of the residents and property owners of the district voting in an election for that purpose. A vacancy on the district board shall be filled by appointment by the remaining members. The member so appointed shall serve the unexpired term until his successor is appointed or elected.

D. A member of the district board may be a member of more than one district board. A director may not be a member of the governing board of or an employee of the municipality that created the district."

Section 9. A new section of the Metropolitan Redevelopment Code is enacted to read:

"[NEW MATERIAL] NOTICE AND CONDUCT OF ELECTION--WAIVER.--

A. Any election for members of a district board shall be a nonpartisan election called by posting notices in three public places within the boundaries of the district not less than twenty days before the election. Notice shall also be published in a newspaper of general circulation in the district once a week for two consecutive weeks before the election. The notice shall state:

(1) the place of holding the election and provisions for voting by mail, if any; and

(2) the hours during the day, not less than six, in which the polls will be open.

B. The district board shall determine the date of the election and the polling places for the election and may consolidate county precincts. The district board may establish provisions for voting by mail.

C. Voter lists shall be used to determine the voters of the district. If the district includes land lying partly in and partly out of any county election precinct, the voter lists may contain the names of all voters in the precinct, and the precinct boards at those precincts shall require that a voter execute an affidavit stating that he is a resident of the district.

D. A federally qualified elector who is not a resident of the district shall execute an affidavit stating that he is the owner of land in the district and stating the area of land in acres owned by him. Precinct board members may administer oaths or take affirmations for these purposes.

E. Except as otherwise provided by this section, the election shall comply with the general election laws of this state.

F. The district board may provide for the returns of the elections to be made in person or by mail.

G. Within thirty days after an election, the district board shall meet and canvass the returns, determining the number of votes properly cast. The canvass may be continued for an additional period not to exceed thirty days at the election of the district board for the purpose of completing the canvass.

H. If a person listed on the assessment roll is no longer the owner of land in the district and the name of the successor owner becomes known and is verified by recorded deed or other similar evidence of transfer of ownership, the successor owner is deemed to be the owner for the purposes of the election.

I. If no person has registered to vote within the district within fifty days immediately preceding any scheduled election date, any election for members of the district board shall be held by vote of the federally qualified electors who are property owners in the district. Each such property owner shall have the number of votes or portion of votes equal to the number of acres or portion of acres rounded upward to the nearest one-fifth of an acre owned in the district by that property owner.

J. In any election for members of the district board, a federally qualified elector who is a property owner in the district and who is also a resident voter shall have the number of votes or portion of votes to which he is entitled as an owner and shall not be entitled to an additional vote as a result of residing within the district."

Section 10. A new section of the Metropolitan Redevelopment Code is enacted to read:

"[NEW MATERIAL] DISTRICT ASSESSMENT.--If a district board elects the tax increment method, the district may impose an assessment on property within the district in such amount as the district board determines is commensurate with the benefit of the relevant metropolitan redevelopment project to the property. The assessment may not exceed the property taxes, at current tax rates, that would be assessed on the increase over the base value of the real property before it is included in the metropolitan redevelopment project by each participating unit of government. The owner of the real property shall receive a credit against real property taxes owed with respect to the real property in the amount of such assessment."

Section 11. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2004.

- 24 -