SENATE BILL 425
53rd legislature - STATE OF NEW MEXICO - first session, 2017
INTRODUCED BY
Clemente Sanchez
AN ACT
RELATING TO ECONOMIC DEVELOPMENT; ENACTING THE ENHANCED ENTERPRISE ZONE ACT TO PROVIDE TAX COLLECTION ABATEMENT FOR THE DEVELOPMENT OR IMPROVEMENT OF PROPERTY WITHIN DESIGNATED ECONOMICALLY UNDERPERFORMING AREAS; PROVIDING POWERS AND DUTIES; ESTABLISHING REQUIREMENTS FOR PARTICIPATION; PROVIDING A DELAYED REPEAL.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. [NEW MATERIAL] SHORT TITLE.--This act may be cited as the "Enhanced Enterprise Zone Act".
SECTION 2. [NEW MATERIAL] PURPOSE.--The legislature finds that there currently exist in this state rural and urban areas that are economically underperforming in their communities, are blighted or are in economic distress and may need assistance to overcome conditions of unemployment, underemployment, net out-migration of the population, chronic economic distress, deterioration of business districts or other detrimental economic conditions. The legislature finds that enhanced enterprise zones, by providing qualified participants with property tax relief at the state and local levels, may provide incentives for the development and improvement of property and promote community economic development by supporting job creation and employment training, revenue-producing enhanced enterprises, education and other community services in economically depressed or economically underperforming areas. The legislature declares that to encourage private companies to rehabilitate, expand and improve real property and structures in economically depressed areas, enhanced enterprise zones may be established.
SECTION 3. [NEW MATERIAL] DEFINITIONS.--As used in the Enhanced Enterprise Zone Act:
A. "abatement period" means that term of years during which increased property taxes derived from development or redevelopment shall be assessed but not imposed;
B. "department" means the economic development department;
C. "economically depressed" or "economically underperforming" means an area in which a substantial number of parcels are determined by a local government to be dilapidated, unsanitary, unsafe, in need of economic revitalization or underutilized;
D. "enhanced enterprise zone" or "zone" means an urban or rural geographic area with fixed boundaries designated as an enhanced enterprise zone by a local government pursuant to the Enhanced Enterprise Zone Act;
E. "jurisdiction" means a geographic area over which a local government has authority and control as provided by the constitution of New Mexico or by statute;
F. "local government" means an unincorporated county, a municipality or an Indian nation, tribe or pueblo; the governing body of an unincorporated county, a municipality or an Indian nation, tribe or pueblo; or an entity designated as a governing body in a joint powers agreement entered into between or among an unincorporated county, a municipality or an Indian nation, tribe or pueblo for the purpose of creating and administering an enhanced enterprise zone that encompasses more than one jurisdiction;
G. "municipality" means an incorporated city, town or village, whether incorporated under general act, special act or special charter;
H. "participant" means a person, including a business, resident, landowner, lessor, lessee with the lessor's prior written approval or enterprise within the geographic area of an enhanced enterprise zone that has been approved by a local government for inclusion in the benefits of the enhanced enterprise zone; and
I. "revenue-producing enhanced enterprise" means manufacturing activities; agricultural activities; cultural and creative industries and activities; transportation activities; residential property; public warehousing and storage activities; airports and air transportation services; railyard and rail transportation services; trucking and distribution activities; wholesale trade activities; retail activities; insurance carrier activities; research and development activities; farm implement and heavy equipment dealer activities; employment agency activities; computer programming, data processing and other computer-related activities; health services; office activities; any combination of the foregoing activities; or other job-creating activities as approved by a local government.
SECTION 4. [NEW MATERIAL] ESTABLISHMENT OF ENHANCED ENTERPRISE ZONE--FINDINGS--PUBLIC HEARING--COUNTY RATIFICATION--LANDOWNER PETITION.--
A. A local government may designate an area as an enhanced enterprise zone upon a written finding that the area, as compared with other areas within a jurisdiction, is economically depressed or is economically underperforming, has a higher unemployment rate, has a higher rate of poverty or other distress factors unique to the area or has a greater potential for economic revitalization. Enhanced enterprise zones may include an area previously or currently designated as a metropolitan redevelopment area or district.
B. All enhanced enterprise zones shall be established by local ordinance. The local ordinance shall include an exact description of the boundaries of the proposed zone, a statement of the zone's purpose and goals and the date on which the designation of the zone will expire.
C. Prior to the enactment of an ordinance establishing a zone, the local government shall hold a public hearing for the purpose of obtaining the opinion and suggestions of those persons who will be affected by such a designation. Notice of a public hearing shall be given to all residents and property owners in the proposed zone and shall be published in a newspaper of general circulation at least thirty days prior to the date of the hearing. The notice shall state the time, location, date and purpose of the hearing.
D. Enhanced enterprise zones within a municipality shall be ratified by the board of county commissioners of the county in which the zone to be created is located. An enhanced enterprise zone within a municipality may be rejected by a county only for compelling circumstances as stated in the denial.
E. A majority of not less than fifty-one percent of the total landowners or fifty-one percent of the real property owners in a proposed enhanced enterprise zone may petition a local government for enhanced enterprise zone status. A lessee of property may also petition for inclusion in an enhanced enterprise zone with the prior written permission of the lessor. An owner of property contiguous to the proposed enhanced enterprise zone may petition for inclusion if the property owner satisfies the criteria for participation. In the discretion of a local government, real property may be considered contiguous if physical contiguity is interrupted by a public thoroughfare, railroad or other public use.
F. Subsequent to the designation of a geographic area as an enhanced enterprise zone, a person may petition to become a participant in the proposed zone by submitting a development or improvement plan to the local government in accordance with Section 6 of the Enhanced Enterprise Zone Act.
SECTION 5. [NEW MATERIAL] ENHANCED ENTERPRISE ZONE BOARD--POWERS AND DUTIES--MULTIPLE JURISDICTIONS.--
A. A local government establishing an enhanced enterprise zone may create an enhanced enterprise zone board, with powers and duties as may be established by the local government. If a metropolitan redevelopment district has been established in a jurisdiction, the local government may designate the metropolitan redevelopment board also to act as the enhanced enterprise zone board.
B. If a proposed enhanced enterprise zone is located in multiple jurisdictions, each affected local government shall approve the establishment of the enhanced enterprise zone within its jurisdiction. Denial of approval of the proposed enhanced enterprise zone by one local government shall not affect the establishment of the zone within the jurisdiction of any other local government.
SECTION 6. [NEW MATERIAL] ENHANCED ENTERPRISE ZONE EVALUATIONS--REPORTING REQUIREMENTS.--
A. A local government that has designated an area as an enhanced enterprise zone shall, no more than five years after the designation was made, reevaluate the area to determine whether the enhanced enterprise zone has made substantial progress in the accomplishment of its stated goals. After such review, the local government may take any action necessary to amend the enhanced enterprise zone criteria or purpose, including repeal of the ordinance that established the enhanced enterprise zone.
B. A local government shall report the establishment of an enhanced enterprise zone and all evaluations of an enhanced enterprise zone to the department by August 31 each year for the previous fiscal year ended June 30. An initial report shall include a geographic description of the enhanced enterprise zone, a list of the initial participants and the proposed uses to be developed or improved by each participant in the zone. Reports in subsequent years shall include updates on the progress of the development or improvement by each participant in the enhanced enterprise zone, any resulting increased economic activity of the participants in the zone and any further information about the zone as the department may request or require.
SECTION 7. [NEW MATERIAL] ECONOMIC DEVELOPMENT DEPARTMENT ASSISTANCE.--The department may assist any local government upon request with the establishment, management or evaluation of an enhanced enterprise zone or any development or improvement needs of participants in the zone.
SECTION 8. [NEW MATERIAL] ABATEMENT OF COLLECTION OF INCREASED PROPERTY TAXES.--
A. A participant shall be afforded a property tax collection abatement. The abatement shall provide that property taxes due subsequent to a person's acceptance as a participant in an enhanced enterprise zone be equal to the amount due prior to the creation of the zone, except for new mill levies that may be imported or adjustments to existing mill levies for yield control. The county assessor shall assess properties in the enhanced enterprise zone during the abatement period.
B. Collection of increased property tax value shall be abated for a period not to exceed ten years. At the end of the abatement period, the abatement on collection of taxes at the increased valuation amount shall be reduced by approximately one-third per year such that three years following the end of the abatement period, the full assessed real or personal property tax shall be due at the full assessed value.
C. Nothing in this section shall be construed to affect the distribution of property tax revenues to the various state and local entities as provided by law.
D. If a property in an enhanced enterprise zone changes ownership during the abatement period, the county assessor may reappraise and re-assess the property pursuant to the county's usual tax assessment practices and procedures. The abatement of the collection of property taxes on residential property shall apply only to a post-sale assessed value.
E. A participant shall only lose the benefits of abatement provided in this section upon the expiration of the enhanced enterprise zone or as provided by Section 10 of the Enhanced Enterprise Zone Act.
SECTION 9. [NEW MATERIAL] PARTICIPANTS--REQUIRED SUBMISSIONS--DEVELOPMENT AND IMPROVEMENT PLANS.--
A. No person shall be accepted as a participant in an enhanced enterprise zone without submission of a development or improvement plan that includes, at a minimum:
(1) the person's name, address and property interest in the zone;
(2) a complete and detailed description of the person's proposed participation, including a description of all proposed developments or improvements to the person's property;
(3) a marketing plan, including how the proposed developments or improvements will create jobs, promote industry, trade or enhance economic activity;
(4) a schedule for initiation and completion of the developments or improvements and the date that the developments or improvements will be completed;
(5) the estimated number of new jobs that will be created and by when the jobs will be created; and
(6) other information as required by the department or local government.
B. A local government may designate additional participant criteria as warranted by the circumstances in the local government's jurisdiction.
SECTION 10. [NEW MATERIAL] DEADLINES FOR COMPLETION-- CLAWBACK.--
A. A participant shall complete all developments or improvements within eighteen months after the participant's development or improvement plan is approved by the local government. The local government may grant an extension of time for good cause. An extension of no more than six months may be granted on no more than two occasions.
B. If a participant fails to develop or improve the participant's property within the time allotted by the local government, the participant may be removed from active enhanced enterprise zone status and all property taxes shall be due and payable at the current value, without any abatement, as determined by the county assessor.
SECTION 11. [NEW MATERIAL] DELAYED REPEAL--EFFECT OF DELAYED REPEAL ON EXISTING ENHANCED ENTERPRISE ZONES.--
A. Effective June 30, 2032, Sections 1 through 10 of the Enhanced Enterprise Zone Act are repealed.
B. Enhanced enterprise zones existing on June 30, 2032 shall continue until the date scheduled for the zone's expiration as stated in the zone's enabling ordinance. No participant in an enhanced enterprise zone existing on June 30, 2032 shall lose the benefits of being a participant until expiration of the zone or as provided by Section 10 of the Enhanced Enterprise Zone Act.
SECTION 12. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2017.
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