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F I S C A L I M P A C T R E P O R T

SPONSOR Grubesic

DATE

TYPED 3/17/05 HB

SHORT TITLE

Local Government and Property Owner Agree-

ments

SB 830/aSCORC/aSJC/aSFl#1

ANALYST Hadwiger

APPROPRIATION

(in $000s)

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to HB654.

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Finance and Administration (DFA)

Department of Environment (NMED)

SUMMARY

Synopsis of SFl #1 Amendment

The Senate Floor #1 Amendment would eliminate a provision in the original bill that would have

allowed municipalities to enter into a development agreement with a property owner outside its

planning and platting jurisdiction if it is part of a proposed annexation or utility service agree-

ment.

Synopsis of SJC Amendment

The Senate Judiciary Committee amendment strikes the SCORC amendment. The SJC amend-

ment clarifies that a county as used in the bill means an H class county or a county with a popu-

lation greater than 25,000; and a municipality as used in the bill means a home rule municipality,

a charter municipality or a municipality with a population greater than 20,000. The SJC amend-

ment adds language that a development agreement shall not commit the municipality or county

to obligations in contravention of Section 6-6-11 NMSA 1978 (Bateman Act) and duties of a

Senate Bill 830/aSCORC/aSJC/aSFl#1 -- Page 2

municipality or county pursuant to such agreement are subject to sufficient appropriations. Addi-

tional language provides for agreements to be consistent with the comprehensive plan and any

related sub-area plans when the development agreement is entered into; requires terms of an

agreement to be specified; provides for periodic reviews and termination in the event of a mate-

rial breach and provides for a progress review not more than fifteen years after the agreement is

executed. Further, for up to twenty years after an agreement, the use of land subject to the devel-

opment agreement shall be subject to the zoning ordinances and rules in place when the devel-

opment agreement is executed.

Synopsis of SCORC Amendment

The SCORC amendment to Senate Bill 830 would require that a development agreement be con-

sistent with the comprehensive plan and related sub-area plans of the municipality or county in

effect when the development agreement is entered into.

Synopsis of Original Bill

Senate Bill 830 would allow a governing body or a designee of a municipality or county, after a

public hearing, to adopt an ordinance entering into a development agreement with a property

owner within its jurisdiction or extraterritorial authority. The development agreement could ob-

ligate either party to provide services, infrastructure or facilities. SB830 establishes other stan-

dards governing the development agreements.

Significant Issues

DFA noted that, currently, developers in New Mexico who are given approval based on a current

local comprehensive plan, building codes and zoning still risk having changes required of them

at the time of applying for building permits. Most states have updated their statutes to address

this situation, short of vesting rights at the time of initial application. SB830 provides develop-

ment agreements to be finalized based on approval of the local government. It sets development

standards that must be met during the life of the agreement, such standards may include use con-

siderations, densities, building sizes, impact fees and any other financial contributions by the

property owner, design standards, affordable housing stipulations, and a build-out period before

certain standards are applied. During the term of the development agreement, SB830 prohibits

the agreement to be affected by changes to zoning or a new zoning ordinance. Only a serious

public health and safety threat or a change in standards not in conflict with the agreement are al-

lowed. The agreement is binding on the parties and their successors, such as new owners of

property or new elected officials. DFA also indicated that there are large parcels of land (thou-

sands of acres) in the City of Albuquerque's updated master land use plan that are being consid-

ered for development, including Mesa del Sol, where development might be facilitated by en-

actment of this bill.

The Department of Environment (NMED) indicated that SB830 would authorize local govern-

ments to exercise greater control of land use and development that could result in greater protec-

tion of water quality and drinking-water source areas. Ground-water contamination from liquid

waste systems, for example, could be reduced.

Senate Bill 830/aSCORC/aSJC/aSFl#1 -- Page 3

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Relates to HB654.

TECHNICAL ISSUES

NMED stressed it is important that any development agreements be at least as protective as state

environmental laws and regulations.

OTHER SUBSTANTIVE ISSUES

According to DFA, the advantages of a development agreement for the developer are:

1. It is assured that the project may proceed as approved over the term of the agreement;

2. Land use rules, regulations, and policies pursuant to terms of the agreement are frozen on the

effective date of the agreement;

3. Protection if the community's attitude changes toward the project or when there are new plan-

ning commissioners, county commissioners or councilors;

4. Assistance in securing financing and marketing a project.

The advantages for the local government are:

1. It can impose more regulations than permitted by law;

2. Exactions, impact fees, and mitigation measures can be imposed;

3. Land use conditions not set forth in local laws can be recognized;

4. There is no need for legislative authorization for the exaction; and

6. It is not required to approve the agreement, even after lengthy negotiations.

DH/yr:rs:lg