SENATE BILL 201
49th legislature - STATE OF NEW MEXICO - first session, 2009
INTRODUCED BY
Bernadette M. Sanchez
FOR THE REVENUE STABILIZATION AND TAX POLICY COMMITTEE
AN ACT
RELATING TO MUNICIPALITIES AND COUNTIES; AMENDING THE TAX INCREMENT FOR DEVELOPMENT ACT; UPDATING THE LIST OF GROSS RECEIPTS TAXES THAT CAN BE DEDICATED TO A DISTRICT; PROVIDING FOR DISTRIBUTION FROM A GROSS RECEIPTS TAX INCREMENT DEBT SERVICE RESERVE ACCOUNT; AMENDING AND ENACTING SECTIONS OF THE NMSA 1978.
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 5-15-3 NMSA 1978 (being Laws 2006, Chapter 75, Section 3) is amended to read:
"5-15-3. DEFINITIONS.--As used in the Tax Increment for Development Act:
A. "adjusted taxable gross receipts" means taxable gross receipts plus the amount of deductions allowed under Sections 7-9-92 and 7-9-93 NMSA 1978;
[A.] B. "base adjusted taxable gross receipts" means
[(1)] the total amount of adjusted taxable 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] for reporting periods covering business activity in the calendar year preceding the formation of the tax increment development district [or] and, when an area is added to an existing district, the amount of adjusted taxable gross receipts [taxes collected] reported in the added area in the calendar year preceding the 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] provided that in the first year that a gross receipts tax increment is dedicated, the amount of base adjusted taxable gross receipts shall be estimated by multiplying the amount of adjusted taxable gross receipts reported in that first year by a factor reflecting an estimated growth rate from the base year, where the estimate is made by the governing body that adopted a resolution to form that district in consultation with the taxation and revenue department;
[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] and, 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 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 Local Hospital Gross Receipts Tax Act, the County Local Option Gross Receipts Taxes Act [and] or the County Correctional Facility Gross Receipts Tax Act 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 a town or village or the board of county commissioners of a county;
[H.] I. "gross receipts tax increment" means the total of monthly gross receipts [taxes collected within] tax increments for a tax increment development district [in excess of the base gross receipts taxes collected] for the duration of the existence of [a tax increment development] the district and distributed to the district in the same manner as distributions are made under the provisions of the Tax Administration Act; [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. "gross receipts tax increment distribution year" means September 1 through August 31 of the following year if the resolution dedicating a gross receipts tax increment was effective on July 1, and March 1 through the last day of February of the following year if the resolution dedicating a gross receipts tax increment was effective on January 1;
L. "gross receipts tax increment factor" means:
(1) if the base adjusted taxable gross receipts are greater than zero, the quotient of dividing the cumulative amount of adjusted taxable gross receipts in the current gross receipts tax increment distribution year by the cumulative amount of adjusted taxable gross receipts in the corresponding business activity months of the base gross receipts tax increment distribution year, if that quotient is greater than one, and otherwise one; or
(2) if base adjusted taxable gross receipts is zero, two;
[J.] M. "local government" means a municipality or county;
N. "monthly gross receipts tax increment" means the greater of:
(1) the result of the following computation: subtracting one from the gross receipts tax increment factor and multiplying the result by the cumulative amount of gross receipts tax reported on returns in the current gross receipts tax increment distribution year; and subtracting from that result the cumulative amount of monthly gross receipts tax increment distributed to the district for prior months in the current gross receipts tax increment distribution year; and subtracting from that result any amount by which the gross receipts tax increment at the end of the prior gross receipts tax increment distribution year exceeds the sum of the amounts determined for the last month of all preceding gross receipts tax distribution years by subtracting one from the gross receipts tax increment factor for the month and multiplying the result by the cumulative amount of gross receipts tax reported on returns in that gross receipts tax increment distribution year; or
(2) zero;
[K.] O. "municipal option gross receipts taxes" means those gross receipts taxes imposed by municipalities pursuant to the Municipal Local Option Gross Receipts Taxes Act and designated by the governing body of the municipality to be available as part of the gross receipts tax increment;
[L.] P. "municipality" means an incorporated city, town or village;
[M.] Q. "owner" means a person owning real property within the boundaries of a district;
[N.] R. "person" means an individual, corporation, association, partnership, limited liability company or other legal entity;
[O.] S. "project" means a tax increment development project;
[P.] T. "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;
[Q.] U. "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;
[R.] V. "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" [include] 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, 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 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 housing; and
(19) any other improvement that the governing body determines to be for the use or benefit of the public;
[S.] W. "resident qualified elector" means a person who resides within the boundaries of a tax increment development district or proposed tax increment development district and who is qualified to vote in the general elections held in the state pursuant to Section 1-1-4 NMSA 1978;
[T.] X. "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.] Y. "sustainable development" means land 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.] Z. "tax increment development area" means the land included within the boundaries of a tax increment development district;
[W.] AA. "tax increment development district" means a district formed for the purposes of carrying out tax increment development projects;
[X.] BB. "tax increment development plan" means a plan for the undertaking of a tax increment development project;
[Y.] CC. "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 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 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;
DD. "taxable gross receipts" means "gross receipts" as that term is defined for purposes of the Gross Receipts and Compensating Tax Act, excluding any exemptions and less any deductions allowed for purposes of the Gross Receipts and Compensating Tax Act, that are reported within a tax increment development district on returns for which the corresponding gross receipts tax has been paid;
[Z.] EE. "taxing entity" means the governing body of a political subdivision of the state, the gross receipts tax increment or property tax increment of which may be used for a tax increment development project; and
[AA.] FF. "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 are 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 3. 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] quality of life gross receipts tax authorized pursuant to the Municipal Local Option Gross Receipts Taxes Act;
(6) municipal regional spaceport gross receipts tax authorized pursuant to the Municipal Local Option Gross Receipts Taxes Act;
(7) municipal higher education facilities gross receipts tax authorized pursuant to the Municipal Local Option Gross Receipts Taxes Act;
[(6)] (8) an amount distributed to municipalities pursuant to Sections 7-1-6.4 and 7-1-6.46 NMSA 1978; and
[(7)] (9) 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) local hospital gross receipts tax authorized pursuant to the Local Hospital Gross Receipts Tax Act;
[(1)] (2) county gross receipts tax authorized pursuant to the County Local Option Gross Receipts Taxes Act;
(3) special county hospital gross receipts tax authorized pursuant to the County Local Option Gross Receipts Taxes Act;
(4) county fire protection excise tax authorized pursuant to the County Local Option Gross Receipts Taxes Act;
[(2)] (5) county environmental services gross receipts tax authorized pursuant to the County Local Option Gross Receipts Taxes Act;
(6) county health care gross receipts tax authorized pursuant to the County Local Option Gross Receipts Taxes Act;
[(3)] (7) county infrastructure gross receipts tax authorized pursuant to the County Local Option Gross Receipts Taxes Act;
(8) county education gross receipts tax authorized pursuant to the County Local Option Gross Receipts Taxes Act;
[(4)] (9) county capital outlay gross receipts tax authorized pursuant to the County Local Option Gross Receipts Taxes Act;
(10) county area emergency communications and emergency medical and behavioral health services tax or countywide emergency communications and emergency medical and behavioral health services tax authorized pursuant to the County Local Option Gross Receipts Taxes Act; [(5)] (11) county regional transit gross receipts tax authorized pursuant to the County Local Option Gross Receipts Taxes Act; [and]
(12) quality of life gross receipts tax authorized pursuant to the County Local Option Gross Receipts Taxes Act;
(13) county regional spaceport gross receipts tax authorized pursuant to the County Local Option Gross Receipts Taxes Act;
(14) water and sanitation gross receipts tax authorized pursuant to the County Local Option Gross Receipts Taxes Act;
(15) county correctional facility gross receipts tax authorized pursuant to the County Correctional Facility Gross Receipts Tax Act;
(16) an amount distributed to counties pursuant to Section 7-1-6.47 NMSA 1978; and
[(6)] (17) 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. 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. 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 4. A new section of the Tax Increment for Development Act, Section 5-15-16.1 NMSA 1978, is enacted to read:
"5-15-16.1. [NEW MATERIAL] DISPOSITION OF BALANCES IN THE DEBT SERVICE RESERVE ACCOUNT.--
A. During the period that gross receipts tax increment bonds are outstanding or have not yet been issued, any balances in a debt service reserve account in excess of amounts necessary to pay the principal and interest due on gross receipts tax increment bonds within the following twelve months shall be paid to the governments that have dedicated a gross receipts tax increment to the district in proportion to the amount of the gross receipts tax increment attributable to their dedication.
B. Any balances in a debt service reserve account after all obligations with respect to the gross receipts tax increment bonds for which the account was established have been satisfied shall be paid to the governments that have dedicated a gross receipts tax increment to the district in proportion to the amount of the gross receipts tax increment attributable to their dedication."
Section 5. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2009.
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