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SENATE BILL 293
57
TH LEGISLATURE
-
STATE
OF
NEW
MEXICO
-
FIRST SESSION
,
2025
INTRODUCED BY
Antoinette Sedillo Lopez and Linda M. López
AN ACT
RELATING TO DEVELOPMENT DISTRICTS; AMENDING THE TAX INCREMENT
FOR DEVELOPMENT ACT; AMENDING DEFINITIONS; REQUIRING
PETITIONERS TO CONDUCT A HOUSING STUDY PRIOR TO SUBMITTING AN
APPLICATION FOR TAX INCREMENT DEVELOPMENT PROJECTS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 5-15-3 NMSA 1978 (being Laws 2006,
Chapter 75, Section 3, as amended by Laws 2019, Chapter 212,
Section 199 and also by Laws 2019, Chapter 275, Section 1) is
amended to read:
"5-15-3. DEFINITIONS.--As used in the Tax Increment for
Development Act:
A. "affordable housing" means decent, safe and
sanitary dwellings, apartments, single-family dwellings or
other living accommodations that are affordable for persons or
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families earning less than eighty percent of the median income
within the county in which a tax increment development project
is located; provided that an owner-occupied housing unit is
affordable to a household if the expected sales price is
reasonably anticipated to result in monthly housing costs that
do not exceed thirty-three percent of the household's gross
monthly income; and provided further that:
(1) determination of mortgage amounts and
payments is to be based on down payment rates and interest
rates generally available to lower- and moderate-income
households; and
(2) a renter-occupied housing unit is
affordable to a household if the unit's monthly housing costs,
including rent and basic utility and energy costs, do not
exceed thirty-three percent of the household's gross monthly
income;
[A.] B. "base gross receipts taxes" means:
(1) the total amount of gross receipts taxes
collected within a tax increment development district, as
estimated by the governing body that adopted a resolution to
form that district, in consultation with the taxation and
revenue department, in the calendar year preceding the
formation of the tax increment development district or, when an
area is added to an existing district, the amount of gross
receipts taxes collected in the calendar year preceding the
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effective date of the modification of the tax increment
development plan and designated by the governing body to be
available as part of the gross receipts tax increment; and
(2) any amount of gross receipts taxes that
would have been collected in such year if any applicable
additional gross receipts taxes imposed after that year had
been imposed in that year;
[B.] C. "base property taxes" means:
(1) the portion of property taxes produced by
the total of all property tax levied at the rate fixed each
year by each governing body levying a property tax on the
assessed value of taxable property within the tax increment
development area last certified for the year ending immediately
prior to the year in which a tax increment development plan is
approved for the tax increment development area, or, when an
area is added to an existing tax increment development area,
"base property taxes" means that portion of property taxes
produced by the total of all property tax levied at the rate
fixed each year by each governing body levying a property tax
upon the assessed value of taxable property within the tax
increment development area on the date of the modification of
the tax increment development plan and designated by the
governing body to be available as part of the property tax
increment; and
(2) any amount of property taxes that would
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have been collected in such year if any applicable additional
property taxes imposed after that year had been imposed in that
year;
[C.] D. "county option gross receipts taxes" means
gross receipts taxes imposed by counties pursuant to the County
Local Option Gross Receipts and Compensating Taxes Act and
designated by the governing body of the county to be available
as part of the gross receipts tax increment;
[D.] E. "district" means a tax increment
development district;
[E.] F. "district board" means a board formed in
accordance with the provisions of the Tax Increment for
Development Act to govern a tax increment development district;
[F.] G. "enhanced services" means public services
provided by a municipality or county within the district at a
higher level or to a greater degree than otherwise available to
the land located in the district from the municipality or
county, including such services as public safety, fire
protection, street or sidewalk cleaning or landscape
maintenance in public areas; provided that "enhanced services"
does not include the basic operation and maintenance related to
infrastructure improvements financed by the district pursuant
to the Tax Increment for Development Act;
[G.] H. "governing body" means the city council or
city commission of a city, the board of trustees or council of
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a town or village or the board of county commissioners of a
county;
[H.] I. "gross receipts tax increment" means the
gross receipts taxes collected within a tax increment
development district in excess of the base gross receipts taxes
collected in the district;
[I.] J. "gross receipts tax increment bonds" means
bonds issued by a district in accordance with the Tax Increment
for Development Act, the pledged revenue for which is a gross
receipts tax increment;
K. "housing study" means a multivariable estimate
of housing demand created by new employment, including new
full-time economic base jobs, expected to occur as a result of
implementation of a tax increment development project;
[J.] L. "local government" means a municipality or
county;
[K.] M. "municipal option gross receipts taxes"
means those gross receipts taxes imposed by municipalities
pursuant to the Municipal Local Option Gross Receipts and
Compensating Taxes Act and designated by the governing body of
the municipality to be available as part of the gross receipts
tax increment;
[L.] N. "municipality" means an incorporated city,
town or village;
[M.] O. "new full-time economic base job" means a
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job:
(1) that is primarily performed in New Mexico;
(2) that is held by an employee who is hired
to work an average of at least thirty-two hours per week for at
least forty-eight weeks per year;
(3) that is:
(a) involved, directly or in a
supervisory capacity, with the production of: 1) a service;
provided that the majority of the revenue generated from the
service is from sources outside the state; or 2) tangible or
intangible personal property for sale; or
(b) held by an employee that is employed
at a regional, national or international headquarters operation
or at an operation that primarily provides services for other
operations of the qualifying entity that are located outside
the state; and
(4) that is not directly involved with natural
resources extraction or processing, on-site services where the
customer is present for the delivery of the service, retail,
construction or agriculture except for value-added processing
performed on agricultural products that would then be sold for
wholesale or retail consumption;
[N.] P. "owner" means a person owning real property
within the boundaries of a district;
[O.] Q. "person" means an individual, corporation,
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association, partnership, limited liability company or other
legal entity;
[P.] R. "project" means a tax increment development
project;
[Q.] S. "property tax increment" means all property
tax collected on real property within the designated tax
increment development area that is in excess of the base
property tax until termination of the district and distributed
to the district in the same manner as distributions are made
under the provisions of the Tax Administration Act;
[R.] T. "property tax increment bonds" means bonds
issued by a district in accordance with the Tax Increment for
Development Act, the pledged revenue for which is a property
tax increment;
[S.] U. "public improvements" means on-site
improvements and off-site improvements that directly or
indirectly benefit a tax increment development district or
facilitate development within a tax increment development area
and that are dedicated to the governing body in which the
district lies. "Public improvements" includes:
(1) sanitary sewage systems, including
collection, transport, treatment, dispersal, effluent use and
discharge;
(2) drainage and flood control systems,
including collection, transport, storage, treatment, dispersal,
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effluent use and discharge;
(3) water systems for domestic, commercial,
office, hotel or motel, industrial, irrigation, municipal or
fire protection purposes, including production, collection,
storage, treatment, transport, delivery, connection and
dispersal;
(4) highways, streets, roadways, bridges,
crossing structures and parking facilities, including all areas
for vehicular use for travel, ingress, egress and parking;
(5) trails and areas for pedestrian,
equestrian, bicycle or other non-motor vehicle use for travel,
ingress, egress and parking;
(6) pedestrian and transit facilities, parks,
recreational facilities and open space areas for the use of
members of the public for entertainment, assembly and
recreation;
(7) landscaping, including earthworks,
structures, plants, trees and related water delivery systems;
(8) public buildings, public safety facilities
and fire protection and police facilities;
(9) electrical generation, transmission and
distribution facilities;
(10) natural gas distribution facilities;
(11) lighting systems;
(12) cable or other telecommunications lines
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and related equipment;
(13) traffic control systems and devices,
including signals, controls, markings and signage;
(14) school sites and facilities with the
consent of the governing board of the public school district
for which the facility is to be acquired, constructed or
renovated;
(15) library and other public educational or
cultural facilities;
(16) equipment, vehicles, furnishings and
other personal property related to the items listed in this
subsection;
(17) inspection, construction management,
planning and program management and other professional services
costs incidental to the project;
(18) [workforce] affordable housing; and
(19) any other improvement that the governing
body determines to be for the use or benefit of the public;
[T.] V. "state gross receipts tax" means the gross
receipts tax imposed pursuant to the Gross Receipts and
Compensating Tax Act, but does not include that portion
distributed to municipalities pursuant to Sections 7-1-6.4 and
7-1-6.46 NMSA 1978 or to counties pursuant to Section 7-1-6.47
NMSA 1978;
[U.] W. "sustainable development" means land
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development that achieves sustainable economic and social goals
in ways that can be supported for the long term by conserving
resources, protecting the environment and ensuring human health
and welfare using mixed-use, pedestrian-oriented, multimodal
land use planning;
[V.] X. "tax increment development area" means the
land included within the boundaries of a tax increment
development district;
[W.] Y. "tax increment development district" means
a district formed for the purposes of carrying out tax
increment development projects;
[X.] Z. "tax increment development plan" means a
plan for the undertaking of a tax increment development
project;
[Y.] AA. "tax increment development project" means
activities undertaken within a tax increment development area
to enhance the sustainability of the local, regional or
statewide economy; to support the creation of jobs, schools and
workforce housing; and to generate tax revenue for the
provision of public improvements and may include:
(1) acquisition of land within a designated
tax increment development area or a portion of that tax
increment development area;
(2) demolition and removal of buildings and
improvements and installation, construction or reconstruction
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of streets, utilities, parks, playgrounds and improvements
necessary to carry out the objectives of the Tax Increment for
Development Act;
(3) installation, construction or
reconstruction of streets, water utilities, sewer utilities,
parks, playgrounds and other public improvements necessary to
carry out the objectives of the Tax Increment for Development
Act;
(4) disposition of property acquired or held
by a tax increment development district as part of the
undertaking of a tax increment development project at the fair
market value of such property for uses in accordance with the
Tax Increment for Development Act;
(5) payments for professional services
contracts necessary to implement a tax increment development
plan or project;
(6) borrowing to purchase land, buildings or
infrastructure in an amount not to exceed the revenue stream
that may be derived from the gross receipts tax increment or
the property tax increment estimated to be received by a tax
increment development district; and
(7) grants for public improvements essential
to the location or expansion of a business; and
[Z.] BB. "taxing entity" means the governing body
of a political subdivision of the state, the gross receipts tax
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increment or property tax increment of which may be used for a
tax increment development project. [and
AA. "workforce housing" means decent, safe and
sanitary dwellings, apartments, single-family dwellings or
other living accommodations that are affordable for persons or
families earning less than eighty percent of the median income
within the county in which the tax increment development
project is located; provided that an owner-occupied housing
unit is affordable to a household if the expected sales price
is reasonably anticipated to result in monthly housing costs
that do not exceed thirty-three percent of the household's
gross monthly income; provided that:
(1) determination of mortgage amounts and
payments is to be based on down payment rates and interest
rates generally available to lower- and moderate-income
households; and
(2) a renter-occupied housing unit is
affordable to a household if the unit's monthly housing costs,
including rent and basic utility and energy costs, do not
exceed thirty-three percent of the household's gross monthly
income.]"
SECTION 2. Section 5-15-4 NMSA 1978 (being Laws 2006,
Chapter 75, Section 4, as amended) is amended to read:
"5-15-4. RESOLUTION FOR FORMATION OF A DISTRICT.--
A. A tax increment development plan may be approved
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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, the governing body [may ] shall adopt a
resolution declaring its intent to form a tax increment
development district. Petitioners shall conduct a housing
study and include the findings in the petition; provided that
the entity conducting the housing study shall not solely rely
on a cost-burden analysis. 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. A governing body may adopt a resolution on its
own motion upon its finding that a need exists for the
formation of a district.
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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
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(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
from the proceeds from the sale of bonds issued by the tax
increment development district 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.
F. A governing body of the municipality or county
within which tax increment development projects are proposed
that adopts a resolution to form a district shall notify the
secretary of taxation and revenue, the secretary of finance and
administration and the director of the legislative finance
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committee of the governing body's action within ten days
following the date on which the resolution was adopted. A copy
of the adopted resolution shall be included in the notice sent
pursuant to this subsection. All resolution materials,
including fiscal and economic studies, shall also be available
electronically to the public."
SECTION 3. Section 5-15-5 NMSA 1978 (being Laws 2006,
Chapter 75, Section 5) is amended to read:
"5-15-5. CONTENTS OF TAX INCREMENT DEVELOPMENT PLAN.--A
tax increment development plan shall include:
A. a map depicting the geographical boundaries of
the area proposed for inclusion within the tax increment
development area;
B. the estimated time necessary to complete the tax
increment development project;
C. a description and the estimated cost of all
public improvements proposed for the tax increment development
project;
D. whether it is proposed to use gross receipts tax
increment bonds or property tax increment bonds or both to
finance all or part of the public improvements;
E. the estimated annual gross receipts tax
increment to be generated by the tax increment development
project and the portion of that gross receipts tax increment to
be allocated during the time necessary to complete the payment
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of the tax increment development project;
F. the estimated annual property tax increment to
be generated by the tax increment development project and the
portion of that property tax increment to be allocated during
the time necessary to complete the payment of the tax increment
development project;
G. the general proposed land uses for the tax
increment development project;
H. the number and types of jobs expected to be
created by the tax increment development project;
I. the amount and characteristics of [workforce ]
affordable housing expected to be created by the tax increment
development project;
J. the location and characteristics of public
school facilities expected to be created, improved,
rehabilitated or constructed by the tax increment development
project;
K. a description 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 be beneficial and that will
be incorporated into the tax increment development project; and
L. the amount and type of private investment in
each tax increment development project."
SECTION 4. Section 5-15-7 NMSA 1978 (being Laws 2006,
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Chapter 75, Section 7, as amended) 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:
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(a) job creation;
(b) [workforce] affordable 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. If the governing body determines that the
district should be formed, it shall:
(1) adopt a resolution ordering that the tax
increment development district be formed;
(2) order that a formation determination among
the owners of real property within the proposed district be
conducted or declare that the formation determination is waived
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pursuant to Subsection B of Section 5-15-8 NMSA 1978; and
(3) set the matter for an election or declare
that an election is canceled pursuant to Subsection I of
Section 5-15-8 NMSA 1978."
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