Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR Stewart
LAST UPDATED
ORIGINAL DATE 3
/5/25
SHORT TITLE State Fairgrounds District Act
BILL
NUMBER Senate Bill 481
ANALYST Torres/Graeser
REVENUE*
(dollars in thousands)
Type FY25 FY26 FY27 FY28 FY29
Recurring or
Nonrecurring
Fund
Affected
GRT &
Gaming
Tax
diversions
At least
($13,000.0)
At least
($13,000.0)
At least
($13,000.0)
Recurring General Fund
Indeterminate but Negative Recurring Bernalillo County
At least
$13,000.0
At least
$13,000.0
At least
$13,000.0
Recurring State Fair District
Property
Tax
Indeterminate
Recurring
Bern Co, APS, other
beneficiaries
Parentheses ( ) indicate revenue decreases.
*Amounts reflect the most recent analysis of this legislation
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 FY26 FY27
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected
TRD $242.7 0 $0 $242.7 Nonrecurring General Fund
GSD Up to $500.0 Up to $500.0 Up to $500.0 Up to 500.0 Nonrecurring General Fund
Expo NM Unknown: depends on plan
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect the most recent analysis of this legislation.
Relates to Senate Bill 482
Sources of Information
Gaming Tax Reports
Taxation and Revenue Department’s RP500 and RP80
Bernalillo County TIDD Plan
LFC Files
Agency Analysis Received From
Expo New Mexico (Expo) General Services Department (GSD) Taxation and Revenue Department (TRD) Department of Finance and Administration/ Board of Finance (DFA/BOF)
Agency Analysis was Solicited but Not Received From
New Mexico Attorney General (NMAG) New Mexico Finance Authority (NMFA) Senate Bill 481 – Page 2
SUMMARY
Synopsis of Senate Bill 481
Senate Bill 481 (SB481) establishes the State Fairgrounds District, a new governmental
subdivision with broad authority over the State Fairgrounds and selected surrounding areas. The
structure and powers of this district are derived from elements of both the Tax Increment for
Development District Act (5-15-1 through 5-15-28 NMSA 1978) and the Metropolitan
Redevelopment Code Act (3-60A-1 through 3-60A-49 NMSA 1978), as amended in 2023.
However, the bill introduces major distinctions, granting the district extensive powers with
limited oversight.
The district would encompass all state-owned land commonly referred to as the State
Fairgrounds, as well as any adjacent properties acquired by the district. Its authority extends to
planning, design, construction, and redevelopment projects within the fairgrounds, including
potential relocation of the State Fair to a remote site. The district also includes the Albuquerque
Downs Racetrack and Casino, adjacent parking areas, and horse barns, with provisions allowing
the board to purchase additional private property southwest of the current fairgrounds (see map
in attachment 1).
The bill creates a five-member board of directors, consisting of the governor, lieutenant
governor, a state senator representing the district, a Bernalillo County commissioner, and the
mayor of Albuquerque. The secretary of the Department of Finance and Administration (DFA),
or a designee, would serve as treasurer, raising potential concerns about conflicts of interest (see
“Technical Issues”). The board’s powers include selling, leasing, or disposing of district
property, as well as accepting gifts, grants, and loans for public projects.
The board is exempt from the Procurement Code for nearly all district-related activities,
including planning, design, engineering, financing, construction, and acquisition of public
improvements, contractors, or other individuals or entities.
Additionally, the bill authorizes the district to issue up to $1 billion in revenue bonds, secured by
100 percent of state gross receipts tax (GRT) revenue generated within the district and 100
percent of gaming tax revenue collected from the Downs Casino and any gaming-related
businesses operating within the district. Bonds issued would have a maximum term of 25 years,
with no apparent limit on the number of bond issuances or their cumulative duration.
Unlike a Tax Increment Development District (TIDD), the State Fair District Board would be
subject to less oversight or required analysis to determine if the projects were in the best interest
of the state. While the New Mexico Finance Authority (NMFA) and the state Board of Finance
(BOF) must approve bond issuances, their review is limited to ensuring that proceeds are used
for board-authorized projects, rather than evaluating the long-term fiscal impact of district
activities. Unlike a TIDD, there is no requirement that the formation of the district would have to
be approved by property owners of the district, no requirements for a master plan, no
requirement of economic analysis, and no requirement that the board must consider citizen input.
This bill does not contain an effective date and, as a result, would go into effect 90 days after the
Legislature adjourns, or June 20, 2024, if enacted. Senate Bill 481 – Page 3
FISCAL IMPLICATIONS
Development and Tax Increment Financing. The creation of this district somewhat resembles
a Tax Increment Development District (TIDD). The theory behind TIDDs is that the state and
local governments share the cost of public infrastructure development with private developers. In
practice, the sponsoring government creates a TIDD, which becomes a political subdivision of
the state. The TIDD then issues bonds, often purchased by the developer, to finance public
infrastructure such as roads, utilities, schools, fire stations, and parks. The developer typically
fronts the cost of construction and later transfers ownership of the improvements to the
sponsoring government. The TIDD reimburses the developer over time using gross receipts tax
(GRT) or property tax increment revenue generated within the district. Historically, developers
built and transferred public infrastructure to municipalities or counties without reimbursement,
but TIDDs now enable reimbursement mechanisms for these expenditures. The intended long-
term outcome is that, after the bonds are repaid, new businesses operating within the TIDD
generate GRT revenue that exceeds the initial investment, creating a net benefit for the state.
However, analyzing the financial viability of such a district is challenging, as it requires
forecasting based on plans before the project begins. Over time, the quality of TIDD applications
has improved, culminating in the South Campus TIDD approved in 2023, which provided
detailed projections and revenue estimates.
SB481 Financial Analysis. Unlike prior TIDD applications, SB481 does not include financial
participation from local governments (city or county), does not reserve an increment for the state
to benefit from contributing funds, and does not include an application or financial estimate
demonstrating whether the proposed project would generate sufficient revenue to repay bonds.
To demonstrate the financial feasibility of the district, staff compiled the following comparisons:
Using an estimated 4.5 percent interest rate for a 25-year bond term, repaying $1 billion
in bonds would require semiannual payments of approximately $33.5 million. To
generate sufficient GRT transfers, the TIDD would need to generate $1.5 billion in
taxable activity annually for the entire 25-year period. Assuming the economic activity
generated qualifies for 50 percent deductions, total gross receipts would need to average
$3 billion annually—a figure that exceeds historical commercial activity levels in the
fairgrounds area.
Even a large-scale retail development within the TIDD is unlikely to generate sufficient
revenue to meet bond repayment obligations. For example, a Walmart Supercenter
generates approximately $2.8 million in GRT. To generate $33.5 million in annual
revenues, the district would require the equivalent of 12 Walmart Supercenters, an
implausible concentration of retail activity.
Unlike a TIDD, under SB481 the state would be the developer and the bonds would be supported
by current levels of the gross receipts taxes and gaming taxes collected within the borders of the
district to amortize bonds. As plans and changes mature, there may be increases in gross receipts
attributable to construction or business activity. When refunding bonds, the board is allowed to
increase the amount of the bond consistent with increases in the revenues. Note, however, that if
the board determines to move the fair to a remote site, any gross receipts or gaming taxes at the Senate Bill 481 – Page 4
new site would not accrue to the benefit of the State Fair District, significantly undercutting the
ability for the district to support bond payments.
The potential GRT revenues to the district and losses to the general fund are estimate from
current GRT revenues shown below, and average slightly over $1 million annually.
The estimated gaming tax revenues average about $11.4 million annually.
Using these estimates and the current 25-year tax-exempt bond rate of 4.5 percent, the net
present value is estimated at between $198 million to $223 million, or roughly one-fifth of the $1
billion authority requested. A more precise number is not possible until a plan has been created
and a developer has been vetted and selected, which typically occurs before legislative approval
of bonding authority for development districts.
The bill does not include a recurring appropriation but diverts or “earmarks” revenue,
representing a recurring loss from the general fund. LFC has concerns with including continuing
distribution language in statutory provisions because earmarking reduces the ability of the
Legislature to establish spending priorities.
County Impacts. Page 3, lines 7-9, create the district as a new political subdivision, “separate
and apart from a municipality or county.” Currently, the state fairgrounds are part of the
unincorporated area of Bernalillo County, and gross receipts sourced to the state fairgrounds are
subject to the county GRT (but not of the City of Albuquerque). Once the district becomes a
political subdivision of its own, Bernalillo County would no longer have the power to tax gross Senate Bill 481 – Page 5
receipts sourced to the district. Bernalillo County would therefore lose GRT revenue related to
activity currently occurring in the district and all future activities that may be generated by
development.
SIGNIFICANT ISSUES
District Authority and State Oversight. The bill grants the State Fairgrounds District broad
autonomy and financial authority, including the ability to acquire and dispose of property, enter
into agreements, and operate public infrastructure. While this structure may streamline
management and decision-making, it also reduces state oversight and transparency in the
district’s financial operations. The bill does not require legislative approval of specific projects,
limiting the Legislature’s role in evaluating the district’s long-term fiscal impact.
Although the bill provides for annual reporting requirements, it lacks explicit accountability
measures for financial management and project oversight. Additional legislative action may be
necessary to ensure proper fiscal oversight and performance evaluation of the district’s economic
activities.
Land Ownership and Development Implications. The state of New Mexico currently owns
the fairgrounds property, but the bill does not clarify whether the state would retain title to the
land or sell subdivided parcels to private developers. Media reports and proposed county TIDD
boundaries suggest that the racetrack and casino would remain until at least 2047. Maintaining
these facilities requires significant acreage for parking and barns, raising questions about how
much land would be available for redevelopment.
Of the 203-acre fairgrounds property, the racetrack, horse barns, casino, and limited casino
parking currently occupy an estimated 118 acres. If the state sells portions of the property, it
would reduce available land for public projects and infrastructure improvements within the
district. The Board of Finance and the Legislature would need to approve any land sales, but the
bill does not outline specific processes or restrictions on the disposal of state-owned land.
Deviation From Standard Development District Practices. Typically, TIDDs require multiple
approvals, including a master plan and an economic feasibility analysis, before legislative
authorization. These safeguards ensure project viability and confirm that anticipated revenues
would cover public investment costs. The bill bypasses these requirements, shifting decision-
making authority from the Legislature to the executive branch and limiting legislative input to
the State Fairgrounds District governing board.
Although SB481 does not conform to the New Mexico TIDD Act, the financing mechanism
proposed in the bill aligns with tax increment financing (TIF) principles. TIF is a public
financing tool used to subsidize redevelopment, infrastructure improvements, and private
investment in a designated area. While not a direct appropriation, TIF represents foregone tax
revenue by redirecting future tax increments from the state general fund to fund redevelopment
projects. However, TIDDs usually only on the incremental activity generated from new
development and not 100 percent of generated activity. This district diverts 100 percent of
current and 100 percent of incremental revenues, leaving no way for the state to benefit
financially from the investment, unlike other TIDDs.
Senate Bill 481 – Page 6
Finally, SB481 does not include the following findings required of TIDDs before approving the
formation of the 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 includes sustainable development
considerations.
4. The tax increment development plan conforms to general or long-term planning
of the governing body.
New Mexico's Framework and Historical Context. Unlike TIF in other states, New Mexico's
TIDD Act allows local TIDDs to use incremental local property taxes and state GRT for funding
without requiring a blight designation or brownfield status. The TIDD board, as a government
subdivision, manages these funds to comply with constitutional constraints on public spending.
SB481 differs significantly from traditional TIDDs because the State Fairgrounds District
involves fee-simple state-owned land, rather than state trust land. This distinction means that the
district board could recommend and implement the sale of state-owned land to private
developers, subject to approval by the Board of Finance and the Legislature under existing laws.
Because SB481 does not require local participation in GRT revenues or property taxes,
redevelopment efforts would be 100 percent state-funded despite a lack of demonstrated long-
term benefit to the state.
ADMINISTRATIVE IMPLICATIONS
The Taxation and Revenue Department (TRD) would update forms, instructions, and
publications and make information system changes. This implementation would require a new
gaming excise tax code to facilitate distribution to the State Fairgrounds District Fund. The State
Fairgrounds reporting location for GRT purposes is currently assumed to reflect the correct
boundaries for the new political subdivision and would continue to be used for the GRT
distribution to the fund.
TRD’s Administrative Services Division (ASD) would update the general ledger and revenue
reporting for the new GRT and gaming excise tax distributions. It is anticipated this work would
take approximately 200 hours split between 2 FTE of a pay band 70 and a pay band 80 at a cost
of approximately $12.7 thousand. Collaboration and input from the Department of Finance and
Administration (DFA) is required as this would decrease general fund revenue distributions.
This bill would have a high impact on TRD’s Information Technology Division (ITD), Senate Bill 481 – Page 7
approximately 1,000 hours or about six months and $230 thousand in contractual costs
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
SB481 conflicts with Senate Bill 482, which proposes a joint state and county TIDD on an area
somewhat less than half the full 203 acres of the State Fairgrounds. The county is planning to
take a final vote on the TIDD formation on March 11. Both bills designate the same revenues for
multiple bond issuances.
TECHNICAL ISSUES
The effective date should conform to the usual GRT notification and implementation dates
(January 1 or July 1).
The current fairgrounds are outside the incorporation boundaries of a municipality, but the bill
makes reference to the district being within a municipality.
On page 6, Lines 24 and 25, and page 7, lines 1 and 2, the language “prior to the board issuing
bonds, the New Mexico finance authority, state board of finance and state bond counsel shall
approve the proposed issuance of the bonds…” implies that none of the three entities named can
deny the issuance of the bonds.
The secretary of DFA is required to serve as treasurer and clerk for the board but must also be
responsible for approving budgets and budget adjustments of political subdivisions of the state.
The dual role for the secretary of the Department of Finance and Administration would create a
potential conflict of interest.
From the Taxation and Revenue Department (TRD):
Page 3, lines 7-9, create the district as a new political subdivision, “separate and apart
from a municipality or county.” Currently, the state fairgrounds are part of the
unincorporated area of Bernalillo County, and receipts sourced to the state fairgrounds
are subject to local option gross receipts tax of the County (but not of the City of
Albuquerque). Once the district becomes a political subdivision of its own, Bernalillo
County will no longer have the power to tax gross receipts sourced to the district. If this
is not the intention of the bill, then clarifying language should be added stating that
receipts sourced to the district are still subject to local option gross receipts tax.
On page 2, lines 17-18 and on page 3, lines 9-10, the bill states: “district that consists of
all land owned by the state”. TRD suggests removing the word “all”, which would also
conform with other definitions of “state fairgrounds” in the Tax Code. See, e.g., Section
7-1-6.46(F)(1)(b) NMSA 1978, (“on land owned by the state, commonly known as the
‘state fairgrounds’, within the exterior boundaries of the municipality.”)
TRD suggests amending page 14, line 22 through page 15, line 1, to state “equal to the net
receipts attributable to the gross receipts tax from business locations within the state
fairgrounds district.” This suggested amendment resolves a potential conflict between
Sections 2(C) and (E), and Section 11. Subsection 2(C) defines the district as “all land Senate Bill 481 – Page 8
owned by the state … and lying within the exterior boundaries of the City of
Albuquerque”, whereas Subsection 2(E) defines a “property owner” as “a person owning
real property within the boundaries of the district.” Section 3(B) gives the board the
power to sell the property of the district so, although the initial district is defined as being
made up only of state-owned real property, “property owners”, as owners of real property
within the district, could be created following formation of the district. But Section 11
only requires distribution of “the net receipts attributable to the gross receipts tax from
business locations on land owned by the state, commonly known as the state
fairgrounds…” This language would potentially exclude gross receipts tax from business
locations owned by property owners other than the state.
Page 3, lines 7-9, create the district as a new political subdivision, “separate and apart
from a municipality or county.” Currently, the state fairgrounds are part of the
unincorporated area of Bernalillo County, and receipts sourced to the state fairgrounds are
subject to local option gross receipts tax of the County (but not of the City of
Albuquerque). Once the district becomes a political subdivision of its own, Bernalillo
County will no longer have the power to tax gross receipts sourced to the district. If this is
not the intention of the bill, then clarifying language should be added stating that receipts
sourced to the district are still subject to local option gross receipts tax.
There is a potential conflict between House Bill 481 and House Bill 482, its companion
legislation, related to a potential overlap in revenue that may be pledged to secure up to
$1 billion in bonds. First, TRD’s interpretation is that the two bills each authorize up to $1
billion in bonds, $2 billion in total. If this is not the intent, it should be clarified.
Second, SB481 creates the state fairgrounds district as a new political subdivision inside
Bernalillo County and exclusive from the City of Albuquerque. The district itself is not a
TIDD, though the district’s Board could form a TIDD. SB481 requires the state
fairgrounds district to pledge ALL State GRT and gaming excise tax sourced to the state
fairgrounds district to repay up to $1 billion of bonds. Separately, SB482 contemplates
that a TIDD formed at the state fairgrounds could pledge the incremental State GRT in the
TIDD to repay up to $1 billion in bonds. Because SB481 requires the district to pledge all
the GRT revenues to payment of the district bonds, there would potentially be no
revenues to pay the SB482-authorized bonds, at least during the term of any SB481
bonds.
This bill does not have an effective date. It is always preferred that GRT bills have an
effective date of July 1. This allows for the changes to match up with the release of the
GRT Filer’s Kit by TRD. This allows for smoother implementation for both taxpayers and
TRD.
From the BOF:
Page 4, Line 16: Should be amended to include “or county” at the end of the text.
The provision currently states reimbursement to a municipality or county for staff and
consultant services and support facilities supplied by the municipality but excludes
reference to services and support facilities supplied by the county.
Senate Bill 481 – Page 9
OTHER SUBSTANT IVE ISSUES
In assessing all tax legislation, LFC staff considers whether the proposal is aligned with
committee-adopted tax policy principles. Those five principles:
Adequacy: Revenue should be adequate to fund needed government services.
Efficiency: Tax base should be as broad as possible and avoid excess reliance on one tax.
Equity: Different taxpayers should be treated fairly.
Simplicity: Collection should be simple and easily understood.
Accountability: Preferences should be easy to monitor and evaluate.
In addition, staff reviews whether the bill meets principles specific to tax expenditures. Those
policies and how this bill addresses those issues:
Tax Expenditure Policy Principle Met? Comments
Vetted: The proposed new or expanded tax expenditure was vetted
through interim legislative committees, such as LFC and the Revenue
Stabilization and Tax Policy Committee, to review fiscal, legal, and
general policy parameters.
X
Not introduced or
heard by an interim
committee nor are
development plans
available for
anal
ysis
Targeted: The tax expenditure has a clearly stated purpose, long-term
goals, and measurable annual targets designed to mark progress toward
the goals.
Unclear purpose
and goal without a
master plan.
Clearly stated purpose X
Long-term goals X
Measurable targets X
Transparent: The tax expenditure requires at least annual reporting by
the recipients, the Taxation and Revenue Department, and other relevant
agencies
N
Accountable: The required reporting allows for analysis by members of
the public to determine progress toward annual targets and determination
of effectiveness and efficiency. The tax expenditure is set to expire unless
legislative action is taken to review the tax expenditure and extend the
expiration date.
Public analysis X
Expiration date X
Effective: The tax expenditure fulfills the stated purpose. If the tax
expenditure is designed to alter behavior – for example, economic
development incentives intended to increase economic growth – there are
indicators the recipients would not have performed the desired actions
“but for” the existence of the tax expenditure.
?
Unlikely to be in the
best interest of the
state as growth of
economic activity in
the district would
only benefit the
district at 100%
despite state
subsid
y.
Fulfills stated purpose X
Passes “but for” test ?
Efficient: The tax expenditure is the most cost-effective way to achieve
the desired results.
?
Key: Met Not Met ? Unclear
LG/iz/hj/hg/sgs
Senate Bill 481 – Page 10
Attachment: Map
Senate Bill 481 – Page 11
Attachment: TIDD Comparisons
Current Participation
TIDD
Formed Bond Cap
Total Transfers
to Date
Current Status
Albuquerque; Bernalillo
County; State Mesa Del Sol TID District
2007 $500,000,000
$39,961,429
Albuquerque; Bernalillo
County; State Mesa Del Sol TID District 2
2007
$0
Albuquerque; Bernalillo
County; State Mesa Del Sol Maxeon
2024
$0 New Authorization
Albuquerque; Bernalillo
County; State Winrock Town Center TID Dist 1
2009 $137,000,000
$31,539,310
Albuquerque; Bernalillo
County; State Winrock Town Center TID Dist 2
2009
$10,399,553
Albuquerque; State Quorum at ABQ Uptown TIDD
2009 $27,000,000
$843,457
Sold to Target; no
clawback
Albuquerque; Bernalillo County; State
Sun Cal 2009 $408,000,000 $0
TIDD denied; Sold at
bankruptcy sale for
$148,000,000 in 2010
Dona Ana County; Las Cruces City of Las Cruces TIDD
2010 $8,000,000
$42,647,297
10-Year bonds paid
out in 2020
Taos Ski Valley; State
Taos Ski Valley TIDD (Inside
TIDD)
2015 $44,000,000
$14,488,976
Albuquerque; Bernalillo
County; State South Campus
2023 $267,000,000
$723,505
No State Participation
Albuquerque; Bernalillo County Lower Petroglyphs TIDD
2018
$753,206
Bernalillo County Santolina -- All
2019
$3,947
Rio Rancho Stonegate TIDD
2015
$1,067,672
Rio Rancho Village at Rio Rancho
2010
$2,044,799
Rio Rancho Las Diamantes
2021
$1,614,536