HB0355

HOUSE BILL 355

51st legislature - STATE OF NEW MEXICO - first session, 2013

INTRODUCED BY

Mimi Stewart

AN ACT

RELATING TO PUBLIC IMPROVEMENT DISTRICTS; REQUIRING A DEVELOPER OF A PUBLIC IMPROVEMENT DISTRICT TO PROVIDE A MINIMUM EQUITY CONTRIBUTION; REQUIRING ADDITIONAL INFORMATION IN AN APPLICATION TO FORM A PUBLIC IMPROVEMENT DISTRICT; REMOVING THE OPTION OF A DISTRICT BOARD TO INCREASE A SPECIAL LEVY UP TO TEN PERCENT AGAINST PRIVATELY OWNED RESIDENTIAL PROPERTY WITHIN A PUBLIC IMPROVEMENT DISTRICT; REQUIRING NOTICE TO A PURCHASER OF PROPERTY WITHIN A PUBLIC IMPROVEMENT DISTRICT; AMENDING, REPEALING AND ENACTING SECTIONS OF THE PUBLIC IMPROVEMENT DISTRICT ACT.

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

SECTION 1. Section 5-11-1 NMSA 1978 (being Laws 2001, Chapter 305, Section 1) is amended to read:

"5-11-1. SHORT TITLE.--[Sections 1 through 27 of this act] Chapter 5, Article 11 NMSA 1978 may be cited as the "Public Improvement District Act"."

SECTION 2. Section 5-11-6 NMSA 1978 (being Laws 2001, Chapter 305, Section 6) is amended to read:

"5-11-6. ORDER FORMING DISTRICT--ELECTION.--

A. After the hearing, the governing body shall determine whether the district should be formed based upon the interests, convenience or necessity of the owners, residents of the district and citizens of the municipality or county in which the proposed district would be located. If the governing body determines that the district should be formed, it shall adopt a resolution ordering that the district be formed, deleting any property determined not to be directly or indirectly benefited by the district or modifying the general plan and then ordering that an election be held on the question whether to form the district. A resolution ordering a formation of the district shall state that the district will be governed by a district board consisting of members of the governing body, ex officio, or, upon determination of the governing body, five directors appointed by the governing body, and shall contain the names of the five initial directors and the terms of office of each. If the governing body appoints a district board, it shall appoint a treasurer and a clerk from the appointed members.

B. A formation election shall include the owners unless a petition is presented to the governing body pursuant to Subsection I of Section [7 of the Public Improvement District Act] 5-11-7 NMSA 1978. Each owner shall have the number of votes or portions of votes equal to the number of acres or portions of acres rounded upward to the nearest one-fifth of an acre owned by that owner in the submitted district. The question shall also be submitted to a vote of the resident qualified electors. The conduct of a formation election shall meet the requirements of Section [7 of the Public Improvement District Act] 5-11-7 NMSA 1978.

C. Each owner shall retain a right to vote on the approval of the district and the right to vote may not be assigned, delegated or otherwise assumed by any other individual or entity."

SECTION 3. Section 5-11-7 NMSA 1978 (being Laws 2001, Chapter 305, Section 7) is amended to read:

"5-11-7. NOTICE AND CONDUCT OF ELECTION--WAIVER.--

A. Any election pursuant to the Public Improvement District Act 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 municipality or county, or, if there is no newspaper so circulated in the municipality, in a newspaper of general circulation in the county in which the municipality is located 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;

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

(3) if the election is a formation election, the boundaries of the proposed district;

(4) if the election is a bond election, the amount of bonds to be authorized for the district, the maximum rate of interest to be paid on the bonds and the maximum term of the bonds, not exceeding thirty years;

[(5) if the election is a property tax levy election pursuant to Section 19 of the Public Improvement District Act, the maximum tax rate per one thousand dollars ($1,000) of assessed valuation to be imposed, the purposes for which the revenues raised will be used and the existing maximum tax rate, if any;

(6)] (5) that a general plan is on file with the clerk;

[(7)] (6) the purposes for which the property taxes or the special levies will be imposed, and the revenues raised will be used, including a description of the public improvements to be financed with tax revenues, special levies, district revenues or bond proceeds; and

[(8)] (7) that the imposition of property taxes or special levies will result in a lien for the payment thereof on property within the district.

B. The district board or, in the case of a formation election, the governing body, shall determine the date of the election and the polling places for the election and may consolidate county precincts. The district board or governing body may establish provisions for voting by mail.

C. Voter lists shall be used to determine the resident qualified electors. 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 registered voters in the precinct, and the precinct boards at those precincts shall require that a prospective elector execute an affidavit stating that the elector is also a resident qualified elector.

D. For all elections held pursuant to the Public Improvement District Act, a prospective elector who is not a resident qualified elector shall execute an affidavit stating that the elector is the owner of land in the proposed district and stating the area of land in acres owned by the prospective elector. Precinct board members may administer oaths or take all affirmations for these purposes.

E. Except as otherwise provided by this section, the election shall comply with the general election laws of this state. The ballot material provided to each voter shall include:

(1) for a formation election, an impartial description of the district improvements contemplated and a brief description of arguments for and against the formation of the district, if any;

(2) for an election concerning the imposition of property taxes, an impartial description of the taxes to be imposed, the method of apportionment, collection and enforcement and other details sufficient to enable each elector to determine the amount of tax it will be obligated to pay; a brief description of arguments for and against the imposition of taxes that are the subject of the election, if any; and a statement that the imposition of property taxes is for the provision of certain but not necessarily all public infrastructure improvements and services that may be needed or desirable within the district, and that other taxes, levies or assessments by other governmental entities may be presented for approval by owners and resident qualified electors; and

(3) for a formation election, the ballot, which shall pose the question to be voted upon as "district, yes" and "district, no"; for a bond election, "bonds, yes" and "bonds, no"; for a property tax election, if no tax is in place, "property tax, yes" and "property tax, no"; and for an election to change an existing maximum or eliminate an existing tax, "tax change, yes" and "tax change, no", specifying the type of tax to which the proposed change pertains.

F. The governing body or, if after formation, the district board, may provide for the returns of the election to be made in person or by mail.

G. Within thirty days after an election, the governing body, or if after formation, the district board, shall meet and canvass the returns, determining the number of votes properly cast by owners and resident qualified electors. At least a three-fourths' majority of the votes cast at the election shall be required for formation, issuing the bonds, imposing the tax or special levy or changing the tax or special levy. The canvass may be continued for an additional period not to exceed thirty days at the election of the governing body or district board for the purpose of completing the canvass. Failure of a majority to vote in favor of the matter submitted shall not prejudice the submission of the same or similar matters at a later election.

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 Public Improvement District Act.

I. Notwithstanding any other provision of the Public Improvement District Act, if a petition for formation is signed by owners of all of the land in the district described in the petition and is approved by the municipality or county, the municipality or county may waive any or all requirements of posting, publication, mailing, notice, hearing and owner election. On receipt of such a petition, and after approval by an election of resident qualified electors, if any, the municipality or county shall declare the district formed without being required to comply with the provisions of the Public Improvement District Act for posting, publication, mailing, notice, hearing or owner election.

J. If no person has registered to vote within the district within fifty days immediately preceding any scheduled election date, any election required to be held pursuant to the Public Improvement District Act shall be held by vote of the owners. Each 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 owner.

K. In any election held pursuant to the Public Improvement District Act, an owner who is also a resident qualified elector shall have the number of votes or portion of votes to which [he] the owner is entitled as an owner and shall not be entitled to an additional vote as a result of residing within the district."

SECTION 4. Section 5-11-8 NMSA 1978 (being Laws 2001, Chapter 305, Section 8) is amended to read:

"5-11-8. FORMATION--DEBT LIMITATION.--

A. If the formation of the district is approved by at least a three-fourths' majority of the votes cast at the election, the governing body shall cause a copy of the resolution ordering formation of 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 and the local government division of the department of finance and administration. A notice of the formation 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.

B. Except as otherwise provided in this section, a district shall be a political subdivision of the state, separate and apart from the municipality or county. The amount of indebtedness evidenced by [general obligation bonds issued pursuant to Section 19 of the Public Improvement District Act] special levy bonds issued pursuant to Section [20 of that act] 5-11-20 NMSA 1978 and revenue bonds issued pursuant to Section [21 of that act] 5-11-21 NMSA 1978 shall not exceed the estimated cost of the public infrastructure improvements plus all costs connected with the public infrastructure purposes and issuance and sale of bonds, including, without limitation, formation costs, credit enhancement and liquidity support fees and costs. The total aggregate outstanding amount of bonds and any other indebtedness for which the full faith and credit of the district are pledged shall not exceed sixty percent of the market value of the real property and improvements in the district after the public infrastructure improvements of the district are completed plus the value of the public infrastructure owned or to be acquired by the district with the proceeds of the bonds, and shall not affect the general obligation bonding capacity of the municipality or county in which the district is located.

C. The debt service and bonds issued by a district shall not impose an unreasonably high financial burden on any future property owners in the district. No financing shall be undertaken by the district in which any individual property owner is liable for more than its equitable individual portion of the cost of the improvements. All debt service financing shall be subject to final review and approval by the county or municipality.

D. The applicant or developer shall provide a minimum equity contribution, excluding real property, of at least twenty percent of the initial cost of the project. Additionally, the applicant or developer shall independently provide at least twenty-five cents ($.25) in additional infrastructure or community improvements for each one dollar ($1.00) of debt service to be issued by a district to finance public improvements. The municipality or county may in its discretion impose additional financing requirements, including the deposit of cash, a letter of credit or similar credit facility as security for completion of the public infrastructure development. If allowed by law, all bonds issued shall include a debt service reserve fund to be funded by the applicant or developer at the time of formation of the district in an amount acceptable to the district board.

[C.] E. Bonds issued by a district shall not be a general obligation of the state, the county or the municipality in which the district is located and shall not pledge the full faith and credit of the state, the county or the municipality in which the district is located, irrespective of whether the district board is governed by the governing body of the county or municipality in which the district is located.

[D.] F. Following formation of the district, the district board shall administer in a reasonable manner the implementation of the general plan for the public infrastructure improvements of the district."

SECTION 5. Section 5-11-16 NMSA 1978 (being Laws 2001, Chapter 305, Section 16) is amended to read:

"5-11-16. PROJECT APPROVAL.--

A. Potential applicants for a district may schedule and conduct a preapplication meeting and discussion with the municipality or county in which the proposed district is located. Input provided by the municipality shall be of an advisory nature for the purposes of assisting applicants in submitting completed applications with detail and information required to enable meaningful consideration by the municipality or county. The purpose of the meeting shall be to:

(1) make an initial assessment whether the proposed district is consistent with the municipality's or county's land use and development policies and zoning and other applicable regulations;

(2) identify any related municipality or county approvals that will be required for the project;

(3) establish a preliminary schedule for:

(a) the applicant's submittal of a district application;

(b) municipal or county review of the application for completeness; and

(4) identify other issues specific to the district, including the municipality's or county's growth policies, utility expansion policies or other related policies or rules.

B. An application for the formation of a district shall be submitted to the municipality or county in which the proposed district is located. Each application shall contain, at a minimum, the following:

(1) a description of the proposed district, including:

(a) a legal description of its boundaries;

(b) the identity and addresses of all persons or entities with any interest in the property, including submitting a current title report on the property as evidence of the names of persons with any interest in the property;

(d) an analysis of the appropriateness of the district boundaries;

(e) adequate information to establish financial parameters for the operation and financing of the district; and

(f) information regarding the future ownership and maintenance of the infrastructure;

(2) a detailed description of the types of public infrastructure improvements to be financed by the district, including:

(a) the estimated construction or acquisition costs of the public infrastructure and projection of working capital needs, including adequate funds for repair and replacement of infrastructure;

(b) the annual operation and maintenance costs of the public infrastructure; and

(c) the governmental approvals and licenses that shall be required for both the public and private improvements to be constructed and operated;

(3) a feasibility study pursuant to Subsection E of this section;

(4) a description of the applicant's professional experience and evidence demonstrating its financial capacity to undertake the development associated with the public infrastructure and private development and the direct and indirect benefits of all parties with financial interest in the proposed development. If available, such information shall be accompanied by three-year audited financial statements, a description of past projects and disclosure of any material litigation;

(5) a disclosure form to prospective homeowners and landowners describing:

(a) the estimated or projected property tax, special levy or special assessment and other financial burdens of the district;

(b) the ability of the district to be fiscally self-sufficient;

(d) that the municipality or county shall have the right to reject any unacceptable version of the form;

(6) a receipt signed by the purchaser acknowledging the disclosure pursuant to Paragraph (5) of this subsection that, upon the sale of property within the district, the applicant shall file and record with the clerk of the county in which the district is located;

(7) an operating plan for the district, including the functions provided by the district, the operation and maintenance of the infrastructure in the district and all other services of the district;

(8) a description of how the proposed district meets the existing development objectives of the municipality or county, including how the district is consistent with:

(a) the goals of promoting orderly development;

(b) the municipality's or county's comprehensive plan;

(d) the municipality's or county's applicable policies for development, growth management and zoning; and

(9) any other information that the municipality or county may reasonably require after its initial review of the application, including preliminary legal opinions, information regarding the relationship of the application to the municipality's or county's development objectives, additional proof of financial capability, business references, terms sheets for financing and financial commitment letters.

C. Landowners, developers, real estate agents, home builders and any other party involved in the sale of property in the proposed district, including the applicant, shall describe in their marketing or promotional material the purpose of the district, the financial and other relative impacts of the district and the additional tax levy or assessment that will burden the property in the district.

D. In connection with any request for debt financing, the applicant shall provide a current appraisal, subject to update to remain current at the time of any debt financing, of the fair cash market value of the property within the proposed district that may be taxed, assessed or levied upon. The appraisal shall be prepared by a member appraiser of the appraisal institute, chosen by the municipality or county reviewing the request for debt financing and be, in form and substance, acceptable to the municipality or county in the municipality's or county's sole and absolute discretion. In the event that the appraiser chosen by the municipality or county cannot approve the appraisal, the appraisal shall be rejected and a new appraisal may be provided for consideration.

E. Before constructing or acquiring any public infrastructure improvement, the district board shall cause a study of the feasibility and benefits of the public infrastructure improvement project to be prepared, which shall be satisfactory to the municipality or county, made available on the municipality's or county's web site and include:

(1) a description of the public infrastructure improvement to be constructed or acquired and enhanced services to be provided and estimated costs thereof, if any, and other information reasonably necessary to understand the project;

(2) a map showing, in general, the location of the project within the district;

(3) an estimate of the cost to construct, acquire, operate and maintain the project;

(4) an estimated schedule for completion of the project, a map or description of the area to be benefited by the project and a plan for financing the project;

(5) an estimated or projected annual mill or tax levy for all landowners, property owners or residential property owners in the proposed district;

(6) the current, direct and overlapping tax and assessment burden on taxable property that is proposed to be taxed and the full cash value and assessed valuation of the taxable property as shown on the most recent assessment roll;

(7) the expected market absorption of development within the district and the effect of the bond issuance by the district on tax rates within the district, calculated at the beginning, middle and end of the market absorption period or based on the phasing of the project to be financed, as applicable;

(8) projections of working capital needs for a period that shall be the longer of:

(a) the expected term of existence of the district;

(b) thirty years following the creation of a tax upon the district taxable property; or

(9) an analysis of:

(a) the impact of the proposed debt financing, operation and maintenance costs, user charges and other district costs on the ultimate end users of the property, including projected property tax rates, special levies, special assessments, fees, charges and other costs that would be borne by the property in the district;

(b) the impact that the costs described in Subparagraph (a) of this paragraph will have on the marketability of the private development; and

(10) a financing plan for any private development in the district that is not to be dedicated to the municipality or county; and

(11) a market absorption study for the private development in the district prepared by an independent consultant acceptable to the municipality or county, which shall include estimates of the revenue to be generated by the development, the ability of the market to absorb the private development and a market absorption calendar for the private development.

F. At the time of submission of the application, the applicant shall pay the municipality or county a nonrefundable application fee of twenty thousand dollars ($20,000) to be applied by the municipality or county to the costs incurred in connection with the processing and review of the application and formation of the district in accordance with this section. Upon formation of the district, the applicant shall pay the municipality or county an additional nonrefundable administrative expense fee of fifteen thousand dollars ($15,000) to be applied by the municipality or county to the costs and expenses incurred in the formation of the district, specifically the review of the feasibility study and current appraisal of the project. For public infrastructure improvement projects undertaken by a district after formation, the district board shall hold a public hearing on the study and provide notice of the hearing by publication not less than two weeks in advance in the official newspaper of the municipality or county or, if there are none in the municipality or county, a newspaper of general circulation in the county. If the district board is composed of members other than the governing body, the notice shall be mailed to the governing body of the municipality or county in which the district is located. After the hearing, the district board may reject, amend or approve the report. If the report is amended substantially, a new hearing shall be held before approval. If the report is approved, the district board shall adopt a resolution approving the public infrastructure improvement of the project, identifying the areas benefited, the expected method of financing and an appropriate system of providing revenues to operate and maintain the project."

SECTION 6. Section 5-11-18 NMSA 1978 (being Laws 2001, Chapter 305, Section 18) is amended to read:

"5-11-18. RECORDING DOCUMENTS.--The district shall file and record with the county clerk the resolution ordering formation of the district, the general plan of the district and the [canvass of any general obligation bond election] receipt signed by a purchaser acknowledging the disclosure required by Subsection B of Section 5-11-16 NMSA 1978."

SECTION 7. Section 5-11-20 NMSA 1978 (being Laws 2001, Chapter 305, Section 20) is amended to read:

"5-11-20. SPECIAL LEVY--BONDS--IMPOSITION.--

A. At any time after the hearing on formation of the district, the district board may from time to time order that a hearing or an election be held to determine whether a special levy should be imposed and special levy bonds issued to provide money for any public infrastructure purpose consistent with the general plan. The question of imposing a special levy may be considered at the hearing or election on district formation upon notice that both issues will be heard at that time, which notice shall include the information required in Subsection B of this section.

B. Notice of [hearing shall be provided at least two weeks in advance of the hearing itself in a newspaper of general circulation in the municipality or county in which the district is located] the hearing or election shall be mailed by registered or certified mail, postage prepaid, to all owners of real property in the proposed district at least thirty days prior to the date of the hearing or election. Notice shall be published once each week for two successive weeks in a newspaper of general circulation in the municipality or county in which the proposed district is located. The last publication shall be at least three days before the date of the hearing. The notice shall include the following:

(1) a description of the method by which the amount of the proposed special levy will be determined for each class of property to which the levy is proposed to apply, in sufficient detail to enable the owner of the affected parcel to determine the amount of the special levy;

(2) a description of the project to be financed with special levy bonds or revenues; and

(3) a statement that any person affected by the proposed special levy may object in writing or in person at the hearing.

C. Special levy bonds may be sold in a public offering or in a negotiated sale.

D. After the bonds are issued, the district board shall enter in its minutes a record of the bonds sold and their numbers and dates and shall annually impose and cause a special levy to be collected, at the same time and in the same manner as property taxes are levied and collected on all property within the district that may be subject to the levy, including, without limitation, all leased property or improvements to leased land, sufficient, together with any other money lawfully available to pay debt service on the bonds when due, except to the extent that the district board has provided for other imposition, collection and foreclosure procedures in connection with special levies. Money derived from the imposition of the special levy when collected that is pledged to pay the debt service on the bonds shall be kept separately from other funds of the district. Special levy revenues not pledged to pay debt service on bonds may be used to pay other costs of the district, including costs of formation, administration, operation and maintenance, service or enhanced services.

E. The district board shall specify conditions under which the obligation to pay special levies may be prepaid and permanently satisfied.

F. Special levies against privately owned residential property shall be subject to the following provisions:

(1) the maximum amount of special levy that may be imposed shall not be increased over time by an amount exceeding two percent per year [except that the amount of special levy actually imposed may be increased by up to ten percent as a result of the delinquency or default by the owner of any other parcel within the district];

(2) the special levy shall be imposed for a specified time period, after which no further special levy shall be imposed and collected, except that special levies imposed solely to finance the cost of ongoing district services, maintenance or operations or enhanced services may be levied while such services, maintenance or operations or enhanced services are continuing; and

(3) nothing in this subsection shall preclude the establishment of different categories of residential property or changing the amount of the special levies for a parcel whose size or use is changed. A change in the amount of a special levy imposed upon a parcel due to a change in its size or use shall not require voter approval if the method for changing the amount of special levy was approved in the election approving the special levy in sufficient detail to enable the owner of the affected parcel to determine how the change in size or use of the parcel would affect the amount of the special levy.

G. A district's imposition of a special levy shall constitute a lien on the property within the district subject to the special levy, including property acquired by the state or its political subdivisions after imposition of the special levy, which shall be effective during the period in which the special levy is imposed and shall have priority co-equal to the lien of property taxes. A special levy shall be subject to foreclosure by the district at any time after six months following written notice of delinquency to the owner of the real property to which the delinquency applies. The lien shall include delinquencies, penalties and interest thereon at a rate not to exceed the maximum legal rate of interest per year and penalties otherwise applicable for delinquent property taxes, the district's actual costs of foreclosure and any other costs of the district resulting from the delinquency. All rights of redemption applicable to property sold in connection with property tax foreclosures pursuant to the laws of this state shall apply to property sold following foreclosure of a special levy lien. The portion of proceeds of any foreclosure sale necessary to discharge the lien for the special levy shall be deposited in the special bond fund for payment of any obligations secured thereby.

H. No holder of special levy bonds issued pursuant to the Public Improvement District Act may compel any exercise of the taxing power of the district, municipality or county to pay the bonds or the interest on the bonds. Special levy bonds issued pursuant to that act are not a debt of the district, municipality or county, nor is the payment of special levy bonds enforceable out of any money other than the revenue pledged to the payment of the bonds.

I. Subject to the requirements of this section, a district may issue special levy bonds at such times and in such amounts as the district deems appropriate to carry out a project or projects in phases.

J. Pursuant to this section, the district may issue and sell refunding bonds to refund any special levy bonds of the district authorized by the Public Improvement District Act. Refunding bonds issued pursuant to this section shall have a final maturity date no later than the final maturity date of the bonds being refunded."

SECTION 8. Section 5-11-22 NMSA 1978 (being Laws 2001, Chapter 305, Section 22) is amended to read:

"5-11-22. TERMS OF BONDS.--For any bonds issued in connection with Section [19, 20 or 21 of the Public Improvement District Act] 5-11-20 or 5-11-21 NMSA 1978, the district board shall prescribe the denominations of the bonds, the principal amount of each issue and the form of the bonds and shall establish the maturities, which shall not exceed thirty years, interest payment dates and interest rates, whether fixed or variable, not exceeding the maximum rate stated in the notice of the election or the resolution of the district board. The bonds may be sold by competitive bid or negotiated sale for public or private offering at, below or above par. The proceeds of the bonds shall be deposited with the treasurer, or with a trustee or agent designated by the district board, to the credit of the district to be withdrawn for the purposes provided by the Public Improvement District Act. Pending that use, the proceeds may be invested as determined by the district. The bonds shall be made payable as to both principal and interest solely from revenues of the district, and shall specify the revenues pledged for such purposes, and shall contain such other terms, conditions, covenants and agreements as the district board deems proper. The bonds may be payable from any combination of taxes, levies or revenues of the types described in Sections [19, 20 and 21 of the Public Improvement District Act] 5-11-20 and 5-11-21 NMSA 1978."

SECTION 9. Section 5-11-23 NMSA 1978 (being Laws 2001, Chapter 305, Section 23) is amended to read:

"5-11-23. DISTRICT TAXES--ANNUAL FINANCIAL ESTIMATE-- ANNUAL FINANCIAL ESTIMATE AND BUDGET--CERTIFICATION TO LOCAL GOVERNMENT DIVISION.--

A. All property taxes for the operation and maintenance expenses of the district shall not exceed an amount equal to three dollars ($3.00) per one thousand dollars ($1,000) of net taxable value for all real and personal property in the district, unless a higher rate is approved by a vote of the resident qualified electors and owners, voting at an election not less than three years after the date of the formation of the district.

B. Once approved at an election or, in the case of a special levy, by resolution of the district board, the maximum rate of a property tax shall remain in effect until increased or decreased at a subsequent election, and the maximum rate of a special levy shall remain in effect until increased or decreased by resolution of the district board at a subsequent hearing.

C. If a maximum property tax rate is in effect, the district board, on petition of twenty-five percent of the resident qualified electors, or by the owners of twenty-five percent of the land area of the district, shall call an election to reduce the maximum tax rate but not below the lesser of that rate determined by the district board to be necessary to maintain the district's facilities and improvements where the tax was authorized for operation and maintenance, or the actual rate then in effect, but in no event shall the rate be reduced below the rate necessary to satisfy the district's obligations in connection with any outstanding bonds issued pursuant to the Public Improvement District Act.

D. If a maximum special levy is in effect, the district board, on petition of twenty-five percent of the resident qualified electors, or by the owners of twenty-five percent of the land area of the district, shall hold a hearing to determine whether to reduce the maximum special levy but not below the lesser of that rate determined by the district board to be necessary to maintain the district's facilities and improvements, where the special levy was authorized for operation and maintenance, or the actual rate then in effect, but in no event shall the rate be reduced below the rate necessary to satisfy the district's obligations in connection with any outstanding bonds issued pursuant to the Public Improvement District Act.

E. Upon presentation to the district board of a petition signed by the owners of a majority of the property in the district, the district board shall adopt a resolution to reduce or eliminate the portion of the tax or special levy, beginning the next fiscal year, required for one or more services or enhanced services specified in the petition. Signatures on a petition to reduce or eliminate a tax or special levy shall be valid for a period of sixty days.

F. When levying property tax or imposing a special levy, the district board shall make annual statements and estimates of the operation and maintenance expenses of the district, the costs of public improvements to be financed by the taxes or special levy and the amount of all other expenditures for public infrastructure improvements and enhanced services proposed to be paid from the taxes or special levy and of the amount to be raised to pay [general obligation bonds of the district or] special levy bonds, all of which shall be provided for by the levy and collection of property taxes on the net taxable value of the real property in the district or by the imposition and collection of special levies. The district board shall file the annual statements and estimates with the clerk. The district board shall publish a notice of the filing of the estimate, shall hold hearings on the portions of the estimate not relating to debt service on [general obligation bonds or] special levy bonds and shall adopt a budget. The district board, on or before the date set by law for certifying the annual budget of the municipality or county, shall fix, levy and assess the amounts to be raised by property taxes or special levies of the district and shall cause certified copies of the order to be delivered to the local government division of the department of finance and administration. All statutes relating to the levy and collection of property taxes, including the collection of delinquent taxes and sale of property for nonpayment of taxes, apply to district property taxes and to special levies, except to the extent that the district board has provided for other imposition, collection and foreclosure procedures in connection with special levies."

SECTION 10. Section 5-11-24 NMSA 1978 (being Laws 2001, Chapter 305, Section 24) is amended to read:

"5-11-24. DISSOLUTION OF DISTRICT.--

A. The district shall be dissolved by the district board by a resolution of the district board upon a determination that each of the following conditions exist:

(1) all improvements owned by the district have been, or provision has been made for all improvements to be, conveyed to the municipality or county in which the district is located;

(2) either the district has no outstanding bond obligations or the municipality or county has assumed all of the outstanding bond obligations of the district; and

(3) all obligations of the district pursuant to any development agreement with the municipality or county have been satisfied.

B. All property in the district that is subject to the lien of district taxes or special levies shall remain subject to the lien for the payment of [general obligation bonds and] special levy bonds, notwithstanding dissolution of the district. The district shall not be dissolved if any revenue bonds of the district remain outstanding unless an amount of money sufficient, together with investment income thereon, to make all payments due on the revenue bonds either at maturity or prior redemption has been deposited with a trustee or escrow agent and pledged to the payment and redemption of the bonds. The district may continue to operate after dissolution only as needed to collect money and make payments on any outstanding bonds."

SECTION 11. A new section of the Public Improvement District Act is enacted to read:

"[NEW MATERIAL] NOTICE OBLIGATIONS TO PURCHASER--FORM.--

A. A seller or agent of a seller of residential real property that is located in a district established pursuant to the Public Improvement District Act has an affirmative duty to give to the purchaser of the property a written notice three days prior to execution of a sale or purchase agreement.

B. The seller shall deliver the notice required by Subsection A of this section to the purchaser three days prior to the effective date of an executory contract binding the purchaser to purchase the property. The notice must be given separately, as part of the contract during negotiations, and not part of any other notice the seller delivers to the purchaser at closing.

C. This section does not apply to a transfer:

(1) under a court order or foreclosure sale;

(2) by a trustee in bankruptcy;

(3) to a mortgagee by a mortgagor or successor in interest or to a beneficiary of a deed of trust by a trustor or successor in interest;

(4) by a mortgagee or a beneficiary under a deed of trust who has acquired the land at a sale conducted under a power of sale under a deed of trust or a sale under a court-ordered foreclosure or has acquired the land by a deed in lieu of foreclosure;

(5) by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship or trust;

(6) from one co-owner to another co-owner of an undivided interest in the real property; or

(7) of only a mineral interest or leasehold interest.

D. If the seller or agent of a seller of residential real property that is located in a district established pursuant to the Public Improvement District Act fails to provide notice pursuant to this section, the purchaser may cancel the real estate transaction, without cost, within three business days from whichever of the following events occurs last:

(1) the date of the new transaction;

(2) the date that the purchaser received the notice required by this section; or

(3) the closing date of purchase of the property within the district.

E. If the seller or agent of a seller of residential real property that is located in a district established pursuant to the Public Improvement District Act fails to provide notice pursuant to this section, the purchaser may cancel the real estate transaction in writing by the use of any written statement that is signed and dated by the purchaser and that states the purchaser's intent to cancel; or the purchaser may use the notice provided in Subsection F of this section within three business days of the events described in Subsection D of this section. If the purchaser cancels by mail, the purchaser must send the notice no later than midnight of the third business day following the latest of the three events listed in Subsection D of this section.

F. The written notice required pursuant to Subsection A of this section shall read substantially similar to the following:

"NOTICE OF OBLIGATION TO PAY PUBLIC IMPROVEMENT DISTRICT LEVY OR ASSESSMENT TO (municipality or county levying assessment) CONCERNING THE PROPERTY AT (street address).

You are entering into a transaction where the property you are purchasing is located in a public improvement district (PID). As a purchaser of this parcel of real property, you are obligated to pay a tax assessment to a municipality or county for the public improvement project undertaken by the ______________________ district.

(The following paragraph should be in bold, twelve-point type:)

TAX LEVY

The estimated assessment at the time of purchase on this property is ______________________ for __________ (year). You will be subject to annual increases limited to __________ with a maximum increase over the term of the PID of ______________.

The assessment may be due annually or in periodic installments. This assessment is in addition to your property taxes. The amount of the assessment is subject to change. Your failure to pay an assessment could result in a lien on and the foreclosure of your property.

A feasibility study was completed as part of the PID. The feasibility study for the public improvement project is available through the _____________ (municipality or county) web site. More information concerning the amount of the assessment and the due dates of that assessment may be obtained from the municipality or county levying the assessment.

Landowners, developers, real estate agents, homebuilders and any other party, including the applicant, are required to describe in their marketing or promotional material the purpose of the district, the financial and other relative impacts of the district and the additional tax levy or assessment that will burden your property.

Date:

Signature of Purchaser:

RIGHT OF CANCELLATION:

You have a legal right under state law to cancel this transaction, without cost, within three business days from whichever of the following events occurs last:

1) the date of the new transaction, which is ____________;

2) the date you received the Notice of Obligation to Pay PID Assessment; or

3) the closing date of purchase of the property subject to the PID assessment.

HOW TO CANCEL:

If you decide to cancel this transaction, you may do so by notifying ____________ in writing at:

(mailing address of seller or agent of seller)

You may use any written statement that is signed and dated by you and states your intention to cancel, or you may use this notice by dating and signing below. Keep one copy of this notice. If you cancel by mail, you must send the notice no later than midnight of the third business day following the latest of the three events listed above. If you send or deliver your written notice to cancel another way, it must be delivered to the above address no later than that time.

I WISH TO CANCEL

Date:

Signature of Purchaser: "."

SECTION 12. REPEAL.--Section 5-11-19 NMSA 1978 (being Laws 2001, Chapter 305, Section 19, as amended) is repealed.

SECTION 13. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2013.

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