SENATE BILL 151
53rd legislature - STATE OF NEW MEXICO - second session, 2018
INTRODUCED BY
Daniel A. Ivey-Soto
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] 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 a municipality or county;
G. "municipality" means an incorporated city, town or village, whether incorporated under general act, special act or special charter;
H. "participant" means a person who owns or leases property 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;
I. "person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture or any legal or commercial entity; and
J. "revenue-producing enhanced enterprise" means manufacturing activities; agricultural activities; cultural and creative industries and activities; transportation activities; residential property, excluding new single-family residential construction in unimproved areas; 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 3. [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 pursuant to an economic impact study 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 and will be improved if designated as an enhanced enterprise zone. Enhanced enterprise zones may include an area previously or currently designated as a metropolitan redevelopment area or district. Property owners may also petition a local government to create an enhanced enterprise zone.
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, the written finding required by Subsection A of this section 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 to receive written or oral comments concerning the effect of the enhanced enterprise zone designation. Notice of a public hearing shall be given to all property owners in the proposed zone and to each political subdivision whose boundaries overlap the proposed zone. The notice shall be published in a newspaper of general circulation at least thirty days prior to the date of the hearing and shall state the time, location, date and purpose of the hearing.
D. Enhanced enterprise zones within a municipality shall be ratified by a resolution of 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 good cause as reflected by the written record of the board of county commissioners.
E. A property owner petition to create an enhanced enterprise zone shall be signed by a majority of not less than fifty-one percent of the total landowners or fifty-one percent of the real property owners in the geographic area proposed for designation as an enhanced enterprise zone. A lessee of property may also request inclusion in an enhanced enterprise zone with the prior written permission of the lessor.
F. Subsequent to the designation of a geographic area as an enhanced enterprise zone, the local government may expand the boundaries of the zone upon receipt of a proposed development improvement plan from an owner of property contiguous to the zone. In the discretion of a local government, real property may be considered contiguous to the zone if physical contiguity is interrupted by a public thoroughfare, railroad or other public use.
SECTION 4. [NEW MATERIAL] ENHANCED ENTERPRISE ZONE BOARD--POWERS AND DUTIES.--
A. An enhanced enterprise zone shall be governed by the governing body that adopted an ordinance to form the zone or by a five-member board appointed by that governing body.
B. An enhanced enterprise zone board shall monitor the stated purpose of the zone and have other powers and duties as may be established by the local government.
C. If a metropolitan redevelopment district has been established in a jurisdiction, the local government may designate the metropolitan redevelopment board to act as the enhanced enterprise zone board.
D. If an enhanced enterprise zone board is created by a municipality, one member of the board shall represent the county in which the zone is located.
SECTION 5. [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 6. [NEW MATERIAL] ECONOMIC DEVELOPMENT DEPARTMENT ASSISTANCE.--The department shall 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 7. [NEW MATERIAL] ABATEMENT OF COLLECTION OF INCREASED PROPERTY TAXES.--
A. A participant shall be afforded a property tax abatement of increased property taxes attributed to improvements or developments made as a participant in an enhanced enterprise zone. The abatement shall provide that property taxes due subsequent to a person's acceptance as a participant in an enhanced enterprise zone will remain equal to the amount due prior to the creation of the zone, except for new mill levies that may be imposed or adjustments to existing mill levies for yield control.
B. The abatement period shall not exceed ten years. At the end of the abatement period, the abatement on collection of taxes on 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 property tax shall be due on the full assessed value of the real or personal property.
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. The county assessor shall continue to assess properties in the enhanced enterprise zone during the abatement period in accordance with the county's usual assessment practices.
D. If a property in an enhanced enterprise zone changes ownership during the abatement period, the new owner shall continue to receive the benefits of participation in the enhanced enterprise zone; provided that the new owner reaffirms the development and improvement plan submitted by the previous owner. If a lessee is receiving the benefits of participation in an enhanced enterprise zone and the leasehold changes during the abatement period, a new lessee, or the lessor if there is not a new lessee, shall continue to receive the benefits of participation in the enhanced enterprise zone; provided that the new lessee or lessor reaffirms the development and improvement plan submitted by the previous lessee.
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 9 of the Enhanced Enterprise Zone Act.
SECTION 8. [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. If the person is a lessee of property in the zone, the person shall demonstrate in the development or improvement plan that the lessor has provided written permission of the person's participation;
(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) how the proposed developments or improvements will create jobs, promote industry or 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 the date 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.
C. Participation in an enhanced enterprise zone shall be recorded in the records of the county clerk.
SECTION 9. [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 10. [NEW MATERIAL] DELAYED REPEAL--EFFECT OF DELAYED REPEAL ON EXISTING ENHANCED ENTERPRISE ZONES.--
A. Effective July 1, 2033, Sections 1 through 9 of this act are repealed.
B. Enhanced enterprise zones existing on June 30, 2033 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, 2033 shall lose the benefits of being a participant until expiration of the zone or as provided by Section 9 of the Enhanced Enterprise Zone Act as it existed on June 30, 2033.
C. In 2030, the legislative finance committee shall undertake a study of the effectiveness of the Enhanced Enterprise Zone Act and make appropriate recommendations.
SECTION 11. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2018.
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