HOUSE BILL 165

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

Linda Serrato and Meredith A. Dixon

 

 

 

 

 

AN ACT

RELATING TO LOCAL GOVERNMENT; CLARIFYING THAT SPECIAL ASSESSMENTS UNDER THE IMPROVEMENT SPECIAL ASSESSMENT ACT SHALL BE PAID BY PROPERTY OWNERS OR LESSEES WHO HOLD INDUSTRIAL REVENUE BOND LEASES.

 

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

     SECTION 1. Section 4-55D-2 NMSA 1978 (being Laws 2023, Chapter 150, Section 2) is amended to read:

     "4-55D-2. DEFINITIONS.--As used in the Improvement Special Assessment Act:

          A. "capital provider" means a private entity or its designee, successor or assigns that finances or refinances an eligible improvement pursuant to the Improvement Special Assessment Act;

          B. "county" means a county, including an H class county;

          C. "county ordinance" means an ordinance adopted by a county pursuant to the Improvement Special Assessment Act to establish a program within a designated region;

          D. "department" means the economic development department;

          E. "eligible improvement" means a permanently affixed energy efficiency improvement, renewable energy improvement, water conservation improvement or resiliency improvement installed on eligible property as part of the construction or renovation of the property;

          F. "eligible property" means:

                (1) any privately owned commercial, industrial, agricultural or multifamily residential real property with five or more dwelling units, including real property owned by an entity formally recognized as tax exempt pursuant to Internal Revenue Code of 1986, as amended; or

                (2) property interests of a lessee under an industrial revenue bond lease for commercial, industrial, agricultural or multifamily residential real property with five or more dwelling units;

          G. "energy efficiency improvement" means measures, equipment or devices that result in a decrease in consumption of or demand for electricity or natural gas;

          H. "industrial revenue bond lease" means the lease of property by a county or municipality to a person in connection with a project under the authority of the Industrial Revenue Bond Act or the County Industrial Revenue Bond Act;

          I. "lessee" means a lessee under an industrial revenue bond lease;

          [H.] J. "local government" means a municipality, county or other general function governmental unit established by state law;

          [I.] K. "municipal" or "municipality" means any incorporated city, town or village, whether incorporated under general act, special act or special charter, incorporated counties and H class counties;

          [J.] L. "program" means a special assessment program that utilizes and conforms to the program guidebook and uniform special assessment documents established by the department pursuant to the Improvement Special Assessment Act;

          [K.] M. "program administrator" means a person designated by a county to administer a program; "program administrator" may be the department, the county or a third party; provided that the administration procedures used conform to the requirements of the Improvement Special Assessment Act;

          [L.] N. "program guidebook" means a comprehensive document created by the department pursuant to the Improvement Special Assessment Act, including uniform assessment documents, appropriate guidelines, specifications, approval criteria and other standard forms consistent with the administration of a program that are not detailed in the Improvement Special Assessment Act;

          [M.] O. "project application" means an application submitted to a program administrator to demonstrate that a proposed project qualifies for special assessment financing pursuant to a program;

          [N.] P. "region" means a geographical area as designated by a county pursuant to the Improvement Special Assessment Act;

          [O.] Q. "renewable energy improvement" means an energy system that generates energy by use of low- or zero-emissions generation technology with substantial long-term production, including solar, wind and geothermal resources, fuel cell equipment using an electrochemical process to generate electricity and heat or biomass resources;

          [P.] R. "resiliency improvement" means improvements that increase the resilience of a property, including air quality, flood mitigation, storm water management, energy storage and microgrids, alternative vehicle charging infrastructure, fire or wind resistance or inundation adaptation;

          [Q.] S. "special assessment" means a voluntary assessment imposed on a property pursuant to the Improvement Special Assessment Act for the total amount of special assessment financing together with interest, penalties, fees and charges related thereto;

          [R.] T. "special assessment agreement" means a voluntary agreement of a property owner to allow a county to place an assessment on the owner's property to repay special assessment financing pursuant to the Improvement Special Assessment Act;

          [S.] U. "special assessment assignable certificate" means a document assigning a special assessment lien from the county to a capital provider in an amount not to exceed the amount of the special assessment financing for the term of the special assessment lien;

          [T.] V. "special assessment financing" means the total amount of financing provided by a capital provider pursuant to a special assessment financing agreement, including accrual of interest and penalties, charges, fees and costs of enforcement of a special assessment lien;

          [U.] W. "special assessment financing agreement" means a contract pursuant to which a property owner agrees to repay a capital provider for special assessment financing and to the terms of the special assessment financing, including the treatment of prepayment and partial payment of a special assessment, servicing arrangements, the payment of any finance charges and fees and accrual of interest and penalties;

          [V.] X. "special assessment lien" means a lien recorded in all counties in which the eligible property is located to secure the special assessment, which assessment remains on the property until paid in full;

          [W.] Y. "uniform assessment documents" means the forms of county ordinance, special assessment agreement, special assessment lien, special assessment assignable certificate and other model documents prepared by the department pursuant to the Improvement Special Assessment Act for use in the program; provided, however, the department shall not mandate a form of special financing agreement that shall be supplied by a capital provider; and

          [X.] Z. "water conservation improvement" means measures, equipment or devices that decrease the consumption of or demand for water, address safe drinking water or eliminate lead from water used for drinking or cooking."

     SECTION 2. Section 4-55D-5 NMSA 1978 (being Laws 2023, Chapter 150, Section 5) is amended to read:

     "4-55D-5. IMPOSITION OF SPECIAL ASSESSMENT--AMOUNT--COLLECTION--SPECIAL ASSESSMENT LIEN CREATED.--

          A. Upon entering into a special assessment agreement, the county shall record a special assessment lien on the subject property in the real property records of the county in which the property is located.

          B. The recording of the lien pursuant to Subsection A of this section shall include:

                (1) the legal description of the property;

                (2) the county assessor's parcel number of the property;

                (3) the grantor's name, which shall be the same as the property owner on the special assessment agreement;

                (4) the grantee's name, which shall be the county in which the property is located;

                (5) the date on which the special assessment lien was created;

                (6) the principal amount of the special assessment lien;

                (7) the terms and length of the special assessment lien; and

                (8) a copy of the special assessment agreement.

          C. A special assessment lien shall be effective during the period in which the special assessment is imposed and shall have priority superior to all liens, claims and titles except a lien for general ad valorem property taxes or an improvement district lien that is coequal to property taxes.

          D. A special assessment lien runs with the land, and that portion of the special assessment lien that has not yet become due is not accelerated or eliminated by foreclosure of the special assessment lien or any lien for taxes or assessments imposed by the state, a local government or taxing district against the property on which the special assessment lien is imposed.

          E. A special assessment shall be paid by a property owner unless the property is under an industrial revenue bond lease, in which case the lessee shall pay the special assessment, but under no circumstance shall a local government pay a special assessment.

          [E.] F. Upon entering into a special assessment agreement, the county shall execute and record a special assessment assignable certificate from the county to the appropriate capital provider. The special assessment assignable certificate shall convey the special assessment lien including all of the characteristics described in Subsection B of this section. The holder of the special assessment assignable certificate shall be solely responsible for the billing and collection of the related special assessment and for the enforcement of the special assessment lien.

          [F.] G. When the underlying special assessment financing has been satisfied, the special assessment shall be removed from the property and the county shall record a release of the special assessment lien."

     SECTION 3. Section 4-55D-7 NMSA 1978 (being Laws 2023, Chapter 150, Section 7) is amended to read:

     "4-55D-7. SPECIAL ASSESSMENT FINANCING.--

          A. Special assessment financing shall be provided by capital providers and disbursed directly by capital providers to fund eligible improvements subject to a special assessment financing agreement.

          B. A county [is] or municipality shall not be liable in any way for the debt of the property owner [is] or the debt of the special assessment financing, shall not be a third-party obligor and [is] shall not [pledging] pledge or [lending] lend its credit to the property owner, [or] the capital provider or the special assessment financing."

     SECTION 4. Section 4-55D-10 NMSA 1978 (being Laws 2023, Chapter 150, Section 10) is amended to read:

     "4-55D-10. IMMUNITY.--Nothing in the Improvement Special Assessment Act shall be interpreted to pledge, offer or encumber the full faith and credit of a county or municipality."

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