SENATE BILL 483
49th legislature - STATE OF NEW MEXICO - first session, 2009
INTRODUCED BY
Cisco McSorley
AN ACT
RELATING TO PUBLIC FINANCE; AMENDING THE TAX INCREMENT FOR DEVELOPMENT ACT TO IMPOSE A MORATORIUM ON CREATION OF CERTAIN TAX INCREMENT DEVELOPMENT DISTRICTS AND ON STATE BOARD OF FINANCE APPROVAL OF DEDICATION OF A STATE GROSS RECEIPTS TAX INCREMENT FOR CERTAIN BONDS; CREATING A TAX INCREMENT FINANCING TASK FORCE; AMENDING AND ENACTING SECTIONS OF THE NMSA 1978; MAKING AN APPROPRIATION; DECLARING AN EMERGENCY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 5-15-1 NMSA 1978 (being Laws 2006, Chapter 75, Section 1) is amended to read:
"5-15-1. SHORT TITLE.--[Sections 1 through 27 of this act] Chapter 5, Article 15 NMSA 1978 may be cited as the "Tax Increment for Development Act"."
Section 2. Section 5-15-4 NMSA 1978 (being Laws 2006, Chapter 75, Section 4) is amended to read:
"5-15-4. RESOLUTION FOR FORMATION OF A DISTRICT.--
A. Subject to the limitation in Section 5-15-29 NMSA 1978, a tax increment development plan may be approved by the governing body of the municipality or county within which tax increment development projects are proposed. Upon filing with the clerk of the governing body of an approved tax increment development plan and upon receipt of a petition bearing the signatures of the owners of at least fifty percent of the real property located within a proposed tax increment development area, and subject to the limitation in Section 5-15-29 NMSA 1978, the governing body may adopt a resolution declaring its intent to form a tax increment development district. Prior to the formation of a district, the owner or developer of the real property located within an area proposed to be designated as a tax increment development area may enter into an agreement with the governing body concerning the improvement of specific property within the district, and that agreement may be used to establish obligations of the owner or developer and the governing body concerning the zoning, subdivision, improvement, impact fees, financial responsibilities and other matters relating to the development, improvement and use of real property within the district.
B. Subject to the limitation in Section 5-15-29 NMSA 1978, a governing body may adopt a resolution on its own motion upon its finding that a need exists for the formation of a district.
C. The resolution to form a district shall include:
(1) the area or areas to be included within the boundaries of the district;
(2) the purposes for which the district is to be formed;
(3) a statement that a tax increment development plan is on file with the clerk of the governing body and that the plan includes a map depicting the boundaries of the tax increment development area and the real property proposed to be included in the area;
(4) the rate of any proposed property tax levy;
(5) identification of gross receipts tax increment and property tax increment financing mechanisms proposed;
(6) identification of gross receipts tax increments and property tax increments proposed to secure proposed gross receipts tax increment bonds or property tax increment bonds;
(7) requirement of a public hearing for the formation of the district and notice of the hearing;
(8) a statement that formation of a district may result in the use of gross receipts tax increments or property tax increments to pay the costs of construction of public improvements made by the district; and
(9) a reference to the Tax Increment for Development Act.
D. A resolution may direct that, prior to holding a hearing on formation of a district, petitioners for the formation of a district prepare a study of the feasibility, the financing and the estimated costs of improvements, services and benefits to result from the formation of the proposed district. The governing body may require those petitioners to deposit with the clerk or treasurer of the governing body an amount equal to the estimated costs of conducting the study and other estimated formation costs. The deposit shall be reimbursed if the district is formed and if gross receipts tax increment bonds or property tax increment bonds are issued by that district pursuant to the Tax Increment for Development Act.
E. A resolution adopted pursuant to this section shall direct that a public hearing on formation of the district be scheduled and that notice of the hearing be mailed and published."
Section 3. Section 5-15-7 NMSA 1978 (being Laws 2006, Chapter 75, Section 7) is amended to read:
"5-15-7. PUBLIC HEARING.--
A. At a public hearing conducted pursuant to the Tax Increment for Development Act, the governing body shall hear all relevant evidence and testimony and make findings. A record of the hearing shall be kept and may consist of a transcription by a court reporter, an electronic recording or minutes taken by a designated person. The record shall be preserved in the official records of the governing body and shall be open to public inspection pursuant to the Inspection of Public Records Act.
B. Testimony at a hearing is not required to be given under oath.
C. At the conclusion of a hearing, the governing body shall determine whether the tax increment development district should be formed based upon the interests, convenience or necessity of the owners, the residents of the proposed tax increment development district and the residents of the municipality or county in which the proposed tax increment development district is to be located. The governing body shall make the following findings before adopting a resolution to approve the formation of a district:
(1) the tax increment development plan reasonably protects the interests of the governing body in meeting its goals to support:
(a) job creation;
(b) workforce housing;
(c) public school facility creation and improvement, including the creation and improvement of facilities for charter schools; and
(d) underdeveloped area or historical area redevelopment;
(2) the tax increment development plan demonstrates elements of innovative planning techniques, including mixed-use transit-oriented development, traditional neighborhood design or sustainable development techniques, that are deemed by the governing body to benefit community development;
(3) the tax increment development plan incorporates sustainable development considerations; and
(4) the tax increment development plan conforms to general or long-term planning of the governing body.
D. Subject to the limitation in Section 5-15-29 NMSA 1978, if the governing body determines that the district should be formed, it shall adopt a resolution ordering that the tax increment development district be formed and shall set the matter for an election or declare that an election is waived, as provided in the Tax Increment for Development Act."
Section 4. Section 5-15-15 NMSA 1978 (being Laws 2006, Chapter 75, Section 15) is amended to read:
"5-15-15. TAX INCREMENT FINANCING--GROSS RECEIPTS TAX INCREMENT.--
A. Notwithstanding any law to the contrary, but in accordance with the provisions of the Tax Increment for Development Act, a tax increment development plan, as originally approved or as later modified, may contain a provision that a portion of certain gross receipts tax increments collected within the tax increment development area after the effective date of approval of the tax increment development plan may be dedicated for the purpose of securing gross receipts tax increment bonds pursuant to the Tax Increment for Development Act.
B. As to a district formed by a municipality, a portion of any of the following gross receipts tax increments may be paid by the state directly into a special fund of the district to pay the principal of, the interest on and any premium due in connection with the bonds of, loans or advances to, or any indebtedness incurred by, whether funded, refunded, assumed or otherwise, the authority for financing or refinancing, in whole or in part, a tax increment development project within the tax increment development area:
(1) municipal gross receipts tax authorized pursuant to the Municipal Local Option Gross Receipts Taxes Act;
(2) municipal environmental services gross receipts tax authorized pursuant to the Municipal Local Option Gross Receipts Taxes Act;
(3) municipal infrastructure gross receipts tax authorized pursuant to the Municipal Local Option Gross Receipts Taxes Act;
(4) municipal capital outlay gross receipts tax authorized pursuant to the Municipal Local Option Gross Receipts Taxes Act;
(5) municipal regional transit gross receipts tax authorized pursuant to the Municipal Local Option Gross Receipts Taxes Act;
(6) an amount distributed to municipalities pursuant to Sections 7-1-6.4 and 7-1-6.46 NMSA 1978; and
(7) the state gross receipts tax.
C. As to a district formed by a county, all or a portion of any of the following gross receipts tax increments may be paid by the state directly into a special fund of the district to pay the principal of, the interest on and any premium due in connection with the bonds of, loans or advances to or any indebtedness incurred by, whether funded, refunded, assumed or otherwise, the district for financing or refinancing, in whole or in part, a tax increment development project within the tax increment development area:
(1) county gross receipts tax authorized pursuant to the County Local Option Gross Receipts Taxes Act;
(2) county environmental services gross receipts tax authorized pursuant to the County Local Option Gross Receipts Taxes Act;
(3) county infrastructure gross receipts tax authorized pursuant to the County Local Option Gross Receipts Taxes Act;
(4) county capital outlay gross receipts tax authorized pursuant to the County Local Option Gross Receipts Taxes Act;
(5) county regional transit gross receipts tax authorized pursuant to the County Local Option Gross Receipts Taxes Act; and
(6) the state gross receipts tax.
D. The gross receipts tax increment generated by the imposition of municipal or county local option gross receipts taxes specified by statute for particular purposes may nonetheless be dedicated for the purposes of the Tax Increment for Development Act if intent to do so is set forth in the tax increment development plan approved by the governing body, if the purpose for which the increment is intended to be used is consistent with the purposes set forth in the statute authorizing the municipal or county local option gross receipts tax.
E. Subject to the limitation in Section 5-15-29 NMSA 1978, an imposition of a gross receipts tax increment attributable to the imposition of a gross receipts tax by a taxing entity may be dedicated for the purpose of securing gross receipts tax increment bonds with the agreement of the taxing entity, evidenced by a resolution adopted by a majority vote of that taxing entity. A taxing entity shall not agree to dedicate for the purposes of securing gross receipts tax increment bonds more than seventy-five percent of its gross receipts tax increment attributable to the imposition of gross receipts taxes by the taxing entity. A resolution of the taxing entity to dedicate a gross receipts tax increment or to increase the dedication of a gross receipts tax increment shall become effective only on January 1 or July 1 of the calendar year.
F. Subject to the limitation in Section 5-15-29 NMSA 1978, an imposition of a gross receipts tax increment attributable to the imposition of the state gross receipts tax within a district may be dedicated for the purpose of securing gross receipts tax increment bonds with the agreement of the state board of finance, evidenced by a resolution adopted by a majority vote of the state board of finance. The state board of finance shall not agree to dedicate more than seventy-five percent of the gross receipts tax increment attributable to the imposition of the state gross receipts tax within the district. The resolution of the state board of finance shall become effective only on January 1 or July 1 of the calendar year and shall find that:
(1) the state board of finance has reviewed the request for the use of the state gross receipts tax;
(2) based upon review by the state board of finance of the applicable tax increment development plan, the dedication by the state board of finance of a portion of the gross receipts tax increment attributable to the imposition of the state gross receipts tax within the district for use in meeting the required goals of the tax increment plan is reasonable and in the best interest of the state; and
(3) the use of the state gross receipts tax is likely to stimulate the creation of jobs, economic opportunities and general revenue for the state through the addition of new businesses to the state and the expansion of existing businesses within the state.
G. The governing body of the jurisdiction in which a tax increment development district has been established shall timely notify the assessor of the county in which the district has been established, the taxation and revenue department and the local government division of the department of finance and administration when:
(1) a tax increment development plan has been approved that contains a provision for the allocation of a gross receipts tax increment;
(2) any outstanding bonds of the district have been paid off; and
(3) the purposes of the district have otherwise been achieved."
Section 5. A new section of the Tax Increment for Development Act, Section 5-15-29 NMSA 1978, is enacted to read:
"5-15-29. [NEW MATERIAL] MORATORIUM--GREENFIELD TAX INCREMENT DEVELOPMENT DISTRICTS.--
A. From the effective date of this 2009 act until March 31, 2011, there shall be a moratorium on approval of tax increment development plans for greenfield tax increment development districts, on formation of greenfield tax increment development districts and on approval by the state board of finance of dedication of gross receipts tax increments for greenfield tax increment development districts. During this time period:
(1) a governing body shall not approve pursuant to the provisions of Section 5-15-4 NMSA 1978 a tax increment development plan for a greenfield tax increment development district;
(2) a governing body shall not adopt a resolution pursuant to the provisions of Section 5-15-4 NMSA 1978 declaring its intent to form a tax increment development district that is a greenfield tax increment development district;
(3) a governing body shall not adopt a resolution pursuant to Subsection D of Section 5-15-7 NMSA 1978 ordering that a tax increment development district that is a greenfield tax increment development district be formed;
(4) a taxing entity shall not adopt a resolution pursuant to Subsection E of Section 5-15-15 NMSA 1978 approving dedication of a gross receipts tax increment for bonds for a greenfield tax increment development district; and
(5) the state board of finance shall not adopt a resolution pursuant to Subsection F of Section 5-15-15 NMSA 1978 approving dedication of a gross receipts tax increment for bonds for a greenfield tax increment development district.
B. The moratorium pursuant to this section shall not apply to a tax increment development district with respect to which a governing body, prior to January 1, 2009, adopted a resolution ordering the formation of the district and for which, prior to January 1, 2009, the state board of finance adopted a resolution dedicating a gross receipts tax increment attributable to the imposition of the state gross receipts tax within the district.
C. For the purposes of this section, "greenfield tax increment development district" means a tax increment development district:
(1) consisting of land the majority of which has not been previously developed and is not currently served by municipal or county public infrastructure adequate to serve the proposed development; and
(2) for which the tax increment development plan primarily relies on the development of new residential or commercial structures and the infrastructure required to support them, rather than the redevelopment of existing residential or commercial structures and their infrastructure."
Section 6. [NEW MATERIAL] TAX INCREMENT FINANCING TASK FORCE CREATED--MEMBERSHIP--DUTIES.--
A. The "tax increment financing task force" is created. The task force shall function from the date of its appointment until June 30, 2010.
B. The task force is composed of the following members:
(1) the secretary of finance and administration or the secretary's designee;
(2) the secretary of taxation and revenue or the secretary's designee;
(3) the chief executive officer of the New Mexico finance authority or the chief executive officer's designee;
(4) the secretary of public education or the secretary's designee;
(5) the chair of the legislative finance committee or the chair's designee;
(6) the chair of the legislative education study committee or the chair's designee;
(7) the director of the bureau of business and economic research of the university of New Mexico or the director's designee; and
(9) the chief executive officer of the arrowhead center of New Mexico state university or the chief executive officer's designee.
C. Vacancies on the task force shall be filled by appointment by the original appointing authority.
D. Members of the task force are entitled to per diem and mileage as provided in the Per Diem and Mileage Act and shall receive no other compensation, perquisite or allowance.
E. Staff for the task force shall be provided by the legislative council service, the legislative finance committee, the department of finance and administration and the taxation and revenue department.
F. The task force shall solicit input from a wide variety of organizations and private citizens, including:
(1) public interest advocacy groups concerned with growth and development issues, economic and social justice issues, the interests of low-income children and families and environmental issues; and
(2) business and industry associations, professional associations, economic development organizations, labor unions, municipal and county governments, municipal and county organizations, private and public land use planners and tax research organizations.
G. Meetings of the task force shall be open to the public. The task force shall maintain a web site with information about past and upcoming meetings and shall post all written materials provided to the task force members. Notice of meetings, including posting on the web site, shall be given at least seven days in advance of a meeting date. The task force shall hold meetings at least quarterly at which public input is solicited.
H. The task force shall evaluate the implementation and effect of the Tax Increment for Development Act to date and the consequences of the creation of additional tax increment development districts, including at a minimum, examination of the following issues:
(1) the long-term fiscal impact on the general fund;
(2) the long-term fiscal impact on municipal and county funding for recurring programs;
(3) the amount of state and local gross receipts taxes and property taxes committed to existing tax increment development districts;
(4) the experience of other states with tax increment financing, especially the inclusion of state-level taxes in tax increment financing;
(5) what the consequences have been of permitting tax increment development districts to enter into contracts for public improvements without regard to the provisions of the Procurement Code or local procurement regulations;
(6) the availability of other economic development incentives in existing tax increment development districts;
(7) what the consequences would be if tax increment revenues prove insufficient to cover debt service on tax increment development district bonds;
(8) whether approval by the local governing body that approved the district's tax increment development plan should be added as an explicit requirement for changes to tax increment development district boundaries and tax increment development district board membership; and
(9) other possible alternatives for providing financing for public infrastructure for new developments.
I. The task force shall report its findings and recommendations, including recommendations for legislation, to the governor, the legislative finance committee and other appropriate interim legislative committees by June 30, 2010. Prior to submitting this report of its findings and recommendations, the task force shall make a draft report available and provide an opportunity for public comment.
Section 7. APPROPRIATION.--One hundred thousand dollars ($100,000) is appropriated from the general fund to the legislative council service for expenditure in fiscal years 2009 and 2010 to pay costs associated with the tax increment financing task force. Any unexpended or unencumbered balance remaining at the end of fiscal year 2010 shall revert to the general fund.
Section 8. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.
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