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AN ACT

RELATING TO TAXATION; ENACTING THE TAX INCREMENT FOR

DEVELOPMENT ACT; AMENDING AND ENACTING SECTIONS OF THE NMSA

1978; DECLARING AN EMERGENCY.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. SHORT TITLE.--Sections 1 through 27 of this

act may be cited as the "Tax Increment for Development Act".

Section 2. FINDINGS AND PURPOSE.--

A. The purpose of the Tax Increment for

Development Act is to create a mechanism for providing gross

receipts tax financing and property tax financing for public

infrastructure for the purpose of supporting economic

development and job creation.

B. The legislature finds and declares that the

powers conferred by the Tax Increment for Development Act are

for public uses and purposes for which public money may be

expended and the public power exercised, and that it is

necessary and in the public interest for the provisions

enacted in the Tax Increment for Development Act to be

declared as a matter of legislative determination.

Section 3. DEFINITIONS.--As used in the Tax Increment

for Development Act:

A. "base gross receipts taxes" means:

(1) the total amount of gross receipts taxes

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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

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. "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

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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. "county option gross receipts taxes" means

gross receipts taxes imposed by counties pursuant to the

County Local Option Gross Receipts Taxes Act and designated by

the governing body of the county to be available as part of

the gross receipts tax increment;

D. "district" means a tax increment development

district;

E. "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. "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

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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. "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. "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

for the duration of the existence of a tax increment

development district and distributed to the district in the

same manner as distributions are made under the provisions of

the Tax Administration Act;

I. "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;

J. "local government" means a municipality or

county;

K. "municipal option gross receipts taxes" means

those gross receipts taxes imposed by municipalities pursuant

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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. "municipality" means an incorporated city, town

or village;

M. "owner" means a person owning real property

within the boundaries of a district;

N. "person" means an individual, corporation,

association, partnership, limited liability company or other

legal entity;

O. "project" means a tax increment development

project;

P. "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. "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. "public improvements" means on-site

improvements and off-site improvements that directly or

indirectly benefit a tax increment development district or

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facilitate development within a tax increment development area

and that are dedicated to the governing body in which the

district lies. "Public improvements" include:

(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;

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(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

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(19) any other improvement that the

governing body determines to be for the use or benefit of the

public;

S. "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. "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. "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. "tax increment development area" means the land

included within the boundaries of a tax increment development

district;

W. "tax increment development district" means a

district formed for the purposes of carrying out tax increment

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development projects;

X. "tax increment development plan" means a plan

for the undertaking of a tax increment development project;

Y. "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

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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;

Z. "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. "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

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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 4. RESOLUTION FOR FORMATION OF A DISTRICT.--

A. A tax increment development plan may be

approved 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 adopt a

resolution declaring its intent to form a tax increment

development district. 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

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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.

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;

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(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

(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 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.

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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.

Section 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 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

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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

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 6. NOTICE OF PUBLIC HEARING.--

A. Upon adoption of a resolution indicating an

intent to form a tax increment development district, a

governing body shall set a date no sooner than thirty days and

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no later than sixty days after the adoption of the resolution

for a public hearing regarding the formation of the district.

B. Notice of the hearing shall be provided by the

governing body by:

(1) publication once each week for two

consecutive weeks in a newspaper of general circulation in the

municipality or county in which the proposed district is

located;

(2) posting in a prominent location on

property located within the proposed tax increment development

area for fourteen days prior to the hearing; and

(3) written notice via registered or

certified United States mail, postage prepaid, to all owners

of real property within the proposed tax increment development

area no later than ten days prior to the hearing.

C. The notice of the hearing shall contain:

(1) the date, time and place of the hearing;

(2) information regarding alternative

methods for submission of objects or comments;

(3) a statement that the formation of a

district is proposed;

(4) a map showing the boundaries of the

proposed district; and

(5) a statement that a tax increment

development plan is on file with the clerk of the governing

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body and may be reviewed upon request.

D. A summary of the resolution declaring the

governing body's intent to form a tax increment development

district shall be attached to a notice issued pursuant to this

section. The clerk of the governing body shall mail a copy of

the notice to each owner of real property within the proposed

tax increment development area and to all other persons

claiming an interest in the property who have filed a written

request for a copy of the notice within the six months

preceding or at any time following the adoption of the

resolution. The clerk of the governing body shall publish a

copy of the notice and resolution summary at least twice in a

newspaper of general circulation in the municipality or county

in which the proposed tax increment development district is

located. The clerk of the governing body shall obtain an

affidavit from that newspaper after each publication is made.

The clerk of the governing body shall cause the affidavits to

be placed in the official records of the municipality or

county. The affidavits are conclusive evidence of the mailing

and publishing of notice. Notice shall not be held invalid

for failure of delivery to the addressee.

E. A clerk of a governing body who is informed of

a transfer of ownership of real property within a proposed

district and who obtains the name and address of the current

property owner shall mail a copy of the notice and resolution

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as soon as practicable after learning of the transfer.

Section 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 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 adopt a resolution

ordering that the tax increment development district be formed

and shall set the matter for an election or declare that an

election is waived, as provided in the Tax Increment for

Development Act.

Section 8. ELECTION.--

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A. The election procedures set forth in this

section shall be used for:

(1) formation of a new tax increment

development district;

(2) election of a district board member;

(3) adoption of a property tax levy by a tax

increment development district;

(4) use of property tax increment financing

by a tax increment development district; or

(5) issuing of property tax increment bonds

to be repaid by funds raised by property tax increments.

B. An election may be waived and a tax increment

development district shall be formed upon the governing body's

adoption of a resolution to form a tax increment development

district if a petition is presented to a governing body in

accordance with the Tax Increment for Development Act and if

the petition contains the signatures of all owners of the real

property within the proposed tax increment development area

and states that the owners waive the right to an election.

C. An election pursuant to the Tax Increment for

Development Act shall be a nonpartisan election called by

posting notices in three public places within the boundaries

of the district not less than twenty days before the election.

Notice shall also be published in a newspaper of general

circulation once each week for two consecutive weeks before

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the election in the municipality or county in which the

proposed district is located.

D. The notice shall state:

(1) the place of holding the election and

provisions for voting by mail, if any;

(2) the hours during the day during which

the polls will be open;

(3) if the election is a formation election,

the boundaries of the proposed tax increment development

district;

(4) if the election is a bond election, the

purpose for which the bonds are to be issued and the amount of

the issue;

(5) if the election is a property tax levy

election, the maximum tax rate per one thousand dollars

($1,000) of assessed valuation to be imposed, the purposes for

which the revenues raised will be used and the existing

maximum tax rate, if any;

(6) that an approved tax increment

development plan is on file with the clerk of the governing

body;

(7) the purposes for which property taxes

will be imposed and for which the revenues raised will be

used, including a description of the public improvements to be

financed with tax revenues, bond proceeds or other revenues of

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the tax increment development district; and

(8) that the imposition of property taxes

will result in a lien for the payment on property within the

district.

E. The district board, or, in the case of a

formation election, the governing body, shall determine the

date of the election and the polling places for the election

and may consolidate county precincts. The district board or

the governing body may establish provisions for voting by

mail.

F. Voter lists shall be used to determine the

resident qualified electors. If a district or proposed

district includes land lying partly in and partly out of any

county election precinct, the voter lists may contain the

names of all registered voters in the precinct, and the

precinct boards at these precincts shall require that a

prospective elector execute an affidavit stating that the

elector is also a resident qualified elector.

G. For an election held pursuant to the Tax

Increment for Development Act, a prospective elector who is

not a resident qualified elector shall execute an affidavit

stating that the elector is the owner of land in the proposed

or existing district and stating the area of land in acres

owned by the prospective elector. If the prospective elector

is not an individual, the affidavit shall provide that the

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individual casting the vote is the designated representative

of the corporation, association, partnership, limited

liability company or other legal entity entitled to vote in

the election. Precinct board members may administer oaths or

accept affirmations for those purposes.

H. Except as otherwise provided by this section,

the election shall comply with the general election laws of

the state. The ballot material provided to each voter shall

include:

(1) for a formation election, an impartial

description of the tax increment development plan and a brief

description of arguments for and against the formation of the

tax increment development district, if any;

(2) for an election concerning the

imposition of property taxes, an impartial description of the

taxes to be imposed, the method of apportionment, collection

and enforcement and other details sufficient to enable each

resident qualified elector to determine the amount of tax it

will be obligated to pay; a brief description of arguments for

and against the imposition of taxes that are the subject of

the election, if any; and a statement that the imposition of

property taxes is for the provision of certain, but not

necessarily all, public improvements that may be needed or

desirable within the tax increment development district, and

that other taxes, levies or assessments by other governmental

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entities may be presented for approval by owners and resident

qualified electors;

(3) for an election concerning the use of

property tax increment financing, an impartial description of

the estimated increment to be generated over the life of the

project and the nature and extent of the public improvements

to be constructed and maintained using such financing;

(4) for a formation election, the question

to be voted upon as "district, yes" and "district, no";

(5) for a property tax imposition election,

the question to be voted upon as "property tax, yes" and

"property tax, no";

(6) for an election to change an existing

maximum tax or eliminate an existing tax, the question to be

voted upon as "tax change, yes" and "tax change, no" and shall

specify the type of tax to which the proposed change pertains;

and

(7) for an election concerning the use of

property tax increment bonds, the ballot shall pose the

question to be voted upon as "bonds, yes" and "bonds, no".

I. The governing body or, if after district

formation, the district board, may provide for the returns of

the election to be made in person or by mail.

J. Within thirty days after an election, the

governing body, or if after district formation, the district

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board, shall meet and canvass the returns, determining the

number of votes properly cast by owners and resident qualified

electors. A majority of the votes cast at the election shall

be required. The canvass may be continued for an additional

period not to exceed thirty days at the election of the

governing body or district board for the purpose of completing

the canvass. Failure of a majority to vote in favor of the

matter submitted shall not prejudice the submission of the

same or similar matters at a later election; provided that an

election on the same question shall not be held within one

year of the failure of a majority to vote in favor of that

question.

K. If a person transfers real property located in

a district and the name of the successor owner becomes known

and is verified by recorded deed or other similar evidence of

transfer of ownership, the successor owner is deemed to be the

owner of the real property for the purposes of the Tax

Increment for Development Act.

L. If there are no persons registered to vote

within a district or proposed district within fifty days

immediately preceding a scheduled election date, an election

required to be held pursuant to the Tax Increment for

Development Act shall be held by vote of the owners of

property within the district or proposed district. Each owner

shall have the number of votes or portion of votes equal to

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the number of acres or portion of acres rounded upward to the

nearest one-fifth of an acre owned in the district by that

owner.

M. In an election held pursuant to the Tax

Increment for Development Act, an owner who is also a resident

qualified elector shall have the number of votes or portion of

votes equal to the number of acres or portion of acres rounded

upward to the nearest one-fifth of an acre owned in the

district by that owner and shall not be entitled to an

additional vote as a result of residing within the district.

Section 9. FORMATION OF A DISTRICT.--

A. If the formation of the tax increment

development district is approved by a majority of the voters

casting votes at the election, or if an election is held by

vote of the owners of property within the district or proposed

district, the governing body shall deliver a copy of the

resolution ordering formation of the tax increment development

district to each of the following persons or entities:

(1) the county assessor and the clerk of the

county in which the district is located;

(2) the school district within which any

portion of the property located within a tax increment

development area lies;

(3) any other taxing entities within which

any portion of the property located within a tax increment

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development area lies;

(4) the taxation and revenue department; and

(5) the local government division of the

department of finance and administration.

B. A notice of the formation showing the number

and date of the resolution and giving a description of the

land included in the district shall be recorded with the clerk

of the county in which the district is located.

C. A tax increment development district shall be a

political subdivision of the state, separate and apart from a

municipality or county.

Section 10. GOVERNANCE OF THE DISTRICT.--

A. Following formation of a tax increment

development district, a district board shall administer in a

reasonable manner the implementation of the tax increment

development plan as approved by the governing body.

B. The district shall be governed by the governing

body that adopted a resolution to form the district or by a

five-member board composed of members appointed by that

governing body.

C. Three of the appointed directors shall serve an

initial term of six years. Two of the appointed directors

shall serve an initial term of four years. The resolution

forming the district shall state which directors shall serve

four-year terms and which shall serve six-year terms. If a

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vacancy occurs on the district board because of the death,

resignation or inability of the director to discharge the

duties of the director, the governing body shall appoint a

director to fill the vacancy, and the director shall hold

office for the remainder of the unexpired term until a

successor is appointed or elected.

D. A director may be a director of more than one

district.

E. In the case of an appointed board of directors

that is not the governing body, at the end of the appointed

directors' initial terms, the board shall hold an election of

new directors by majority vote of owners and qualified

resident electors in accordance with the Tax Increment for

Development Act. Each owner shall have the number of votes or

portion of votes equal to the number of acres or portion of

acres rounded upward to the nearest one-fifth of an acre owned

in the district by that owner.

Section 11. RECORDS--OPEN MEETINGS.--

A. A district shall keep the following records,

which shall be open to the public:

(1) minutes of all meetings of the district

board;

(2) all resolutions;

(3) accounts showing all money received and

disbursed;

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(4) the annual budget; and

(5) all other records required to be

maintained by law.

B. A district board shall appoint a clerk and

treasurer for the district.

C. All meetings of a district shall be open

meetings held in accordance with the Open Meetings Act.

Section 12. DISTRICT POWERS--LIMITATIONS.--

A. In addition to other express or implied

authority granted by law, a district shall have the power to:

(1) enter into contracts or expend money for

any public purpose with respect to the district;

(2) enter into agreements with a

municipality, county or other local government entity in

connection with real property located within the district;

(3) enter into an intergovernmental

agreement in accordance with the Joint Powers Agreements Act

for the planning, design, inspection, ownership, control,

maintenance, operation or repair of public infrastructure or

the provision of enhanced services by the municipality or

county in which the district lies or for any other purpose

authorized by the Tax Increment for Development Act;

(4) sell, lease or otherwise dispose of

district property if the sale, lease or conveyance is not a

violation of the terms of any contract or bond covenant of the

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district;

(5) reimburse a municipality or county in

which the tax increment development district is located for

providing services within the tax increment development area;

(6) operate, maintain and repair public

infrastructure until dedicated to the governing body;

(7) employ staff, counsel, advisors and

consultants;

(8) reimburse a municipality or county in

which the district is located for staff and consultant

services and support facilities supplied by the municipality

or county;

(9) accept gifts or grants and incur and

repay loans for a public purpose;

(10) enter into an agreement with an owner

concerning the advance of money by an owner for a public

purpose or the granting of real property by the owner for a

public purpose;

(11) levy property taxes in accordance with

election requirements of the Tax Increment for Development Act

for a public purpose on real property located in the district;

(12) pay the financial, legal and

administrative costs of the district;

(13) enter into contracts, agreements and

trust indentures to obtain credit enhancement or liquidity

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support for its bonds and process the issuance, registration,

transfer and payment of its bonds and the disbursement and

investment of proceeds of the bonds in accordance with the

provisions for investment of funds by municipal treasurers;

(14) borrow money within the limits of the

Tax Increment for Development Act to fund the construction,

operation and maintenance of public improvements until

dedicated to the governing body or for any other lawful public

purposes related to the purposes of the Tax Increment for

Development Act; and

(15) use public easements and rights of way

in or across public property, roadways, highways, streets or

other thoroughfares and other public easements and rights of

way of the district, municipality or county.

B. Notwithstanding the provisions of the

Procurement Code or local procurement requirements that may

otherwise be applicable to the municipality or county in which

the district is located, the district board may enter into

contracts to carry out any of the tax increment development

district's authorized powers, including the planning, design,

engineering, financing, construction and acquisition of public

improvements for the district, with a contractor, an owner or

other person or entity, on such terms and with such persons as

the district board determines to be appropriate.

C. A district shall not have the power of eminent

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domain for any purpose.

D. A casino shall not be located in a district,

and a district shall not use the proceeds of property tax

increment bonds or gross receipts tax increment bonds to

finance public improvements for a casino.

Section 13. AUTHORITY TO IMPOSE PROPERTY TAX LEVY.--A

district has the power to establish a property tax levy upon

real property located within the tax increment development

area, with the following limitations:

A. the maximum property tax levy a district may

impose is five dollars ($5.00) on each one thousand dollars

($1,000) of net taxable value, as that term is defined in the

Property Tax Code, which may be used for operation,

maintenance and capital improvements, in furtherance of the

purposes of the Tax Increment for Development Act;

B. a district may impose a property tax levy only

after authorization by a majority of votes cast by the owners

of real property and qualified resident electors of a district

in an election held in accordance with the Tax Increment for

Development Act; and

C. a property tax levy imposed by a district shall

not be effective for more than four years.

Section 14. PROPERTY TAX LEVY RESCISSION ELECTION.--

A. A property tax levy imposed by a district may

be rescinded within the four-year period during which a

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property tax levy imposed by a district is effective if:

(1) thirty-three and one-third percent of

the number of persons who voted in the election for the

imposition of that property tax levy sign a petition to

rescind the property tax levy; and

(2) each person who signs the petition is a

resident qualified elector of the district or an owner of real

property within the tax increment development area.

B. The petition shall be filed with the district

board for verification of the signatures, as to both number

and qualifications of the persons signing. If the district

board verifies that the petition contains the requisite number

of signatures by persons qualified to sign the petition

pursuant to Subsection A of this section, the question of

rescission of the property tax levy imposed by the district

shall be placed on the ballot for:

(1) a special election held in accordance

with the special election procedures of the Election Code that

is called and held within ninety days; or

(2) the next occurring general election if

that election is to be held within less than ninety days.

C. A petition for rescission of a property tax

levy imposed by a district may be submitted only once each

year during the four-year period during which a property tax

levy by a district is effective.

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Section 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

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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;

(6) an amount distributed to municipalities

pursuant to Sections 7-1-6.4 and 7-1-6.46 NMSA 1978; and

(7) 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) county gross receipts tax authorized

pursuant to the County Local Option Gross Receipts Taxes Act;

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(2) county environmental services gross

receipts tax authorized pursuant to the County Local Option

Gross Receipts Taxes Act;

(3) county infrastructure gross receipts tax

authorized pursuant to the County Local Option Gross Receipts

Taxes Act;

(4) county capital outlay gross receipts tax

authorized pursuant to the County Local Option Gross Receipts

Taxes Act;

(5) county regional transit gross receipts

tax authorized pursuant to the County Local Option Gross

Receipts Taxes Act; and

(6) 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

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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

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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

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otherwise been achieved.

Section 16. BONDING AUTHORITY--GROSS RECEIPTS TAX

INCREMENT.--

A. A district may issue gross receipts tax

increment revenue bonds, the pledged revenue for which is a

gross receipts tax increment, for any one or more of the

purposes authorized by the Tax Increment for Development Act.

B. A district may pledge irrevocably any or all of

a gross receipts tax increment received by the district to the

payment of the interest on and principal of the gross receipts

tax increment bonds for any of the purposes authorized in the

Tax Increment for Development Act. A law that imposes or

authorizes the imposition of a municipal or county gross

receipts tax or that affects the municipal or county gross

receipts tax shall not be repealed, amended or otherwise

directly or indirectly modified in any manner to adversely

impair any outstanding gross receipts increment bonds that may

be secured by a pledge of any municipal or county gross

receipts tax increment, unless those outstanding bonds have

been discharged in full or provision has been fully made for

those bonds.

C. Revenues in excess of the annual principal and

interest due on gross receipts tax increment bonds secured by

a pledge of gross receipts tax increment revenue may be

accumulated in a debt service reserve account. The district

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may appoint a commercial bank trust department to act as

paying agent or trustee of the gross receipts tax increment

revenue and to administer the payment of principal of and

interest on the bonds.

D. Except as otherwise provided in the Tax

Increment for Development Act, gross receipts tax increment

bonds:

(1) may have interest, principal value or

any part thereof payable at intervals or at maturity as may be

determined by the governing body;

(2) may be subject to a prior redemption at

the district's option at a time and upon terms and conditions,

with or without the payment of a premium, as determined by the

district board;

(3) may mature at any time not exceeding

twenty-five years after the date of issuance;

(4) may be serial in form and maturity, may

consist of one bond payable at one time or in installments or

may be in another form determined by the district board;

(5) shall be sold for cash at, above or

below par and at a price that results in a net effective

interest rate that does not exceed the maximum permitted by

the Public Securities Act and the Short-Term Interest Rate

Act; and

(6) may be sold at public or negotiated

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sale.

E. At a regular or special meeting, the district

board may adopt a resolution that:

(1) declares the necessity for issuing gross

receipts tax increment bonds;

(2) authorizes the issuance of gross

receipts tax increment bonds by an affirmative vote of a

majority of all the members of the district board; and

(3) designates the sources of gross receipts

taxes or portions thereof to be pledged to the repayment of

the gross receipts tax increment bonds.

Section 17. PROPERTY TAX INCREMENT BONDS.--

A. Notwithstanding any law to the contrary, but in

accordance with 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 property

taxes levied after the effective date of the approval of the

tax increment development plan upon taxable property within a

tax increment development area each year, by or for the

benefit of any public body, may be dedicated for securing

property tax increment bonds pursuant to the Tax Increment for

Development Act, according to the following procedures:

(1) the base property taxes shall be paid

into the funds of each public body as are all other taxes

collected by or for the public body;

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(2) the portion of the property taxes in

excess of the base property tax amount shall be allocated to,

and, when collected, paid into a special fund of the district

to pay the principal of, the interest on and any premiums due

in connection with the bonds of, loans or advances to, or

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. Unless and until the

total assessed value of the taxable property in a tax

increment development area exceeds the base assessed value of

the taxable property in the tax increment development area,

all of the taxes levied upon the taxable property in the tax

increment development area shall be paid into the funds of the

respective public bodies; and

(3) when the bonds, loans, advances and

indebtedness, if any, including interest thereon and any

premiums due in connection with the bonds, loans, advances and

indebtedness have been paid, all taxes upon taxable property

in a tax increment development area shall be paid into the

funds of the respective public bodies.

B. The portion of property taxes in excess of the

amount of base property taxes may be irrevocably pledged by

the district for the payment of the principal of, the interest

on and any premiums due in connection with the bonds, loans,

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advances and indebtedness.

C. Upon general reassessment of taxable property

valuations in a county, including all or part of a tax

increment development area in which a property tax increment

has been pledged for property tax increment bonds, the

portions of valuations for assessment shall be proportionately

adjusted in accordance with that reassessment or change.

D. A tax increment development plan, as originally

approved or as later modified, may contain a provision that

the taxes levied upon taxable property within the tax

increment development area may continue to be allocated after

the effective date of the adoption of the property tax

increment provision if the existing bonds are in default or

about to go into default; except that those taxes shall not be

allocated after all bonds of the district issued pursuant to

the plan, including loans, advances and indebtedness, if any,

and interest thereon, and any premiums due in connection with

the loans, advances and indebtedness have been paid.

E. The property tax increment generated by the

imposition of property taxes 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 and if the property tax

was not approved in an election.

F. The municipality in which a tax increment

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development district has been established shall timely notify

the assessor of the county in which the district has been

established when:

(1) a tax increment development plan has

been approved;

(2) any outstanding obligation incurred by

the district has been paid off; and

(3) the purposes of the district have

otherwise been achieved.

G. As used in this section, "taxes" includes all

levies authorized to be made on an ad valorem basis upon real

and personal property.

H. The increment attributable to a levy by a

taxing entity shall not be dedicated for the purpose of

securing property tax increment bonds without the agreement of

the taxing entity. The agreement shall be evidenced by a

resolution adopted by a majority vote of that taxing entity.

A taxing entity shall not agree to dedicate for the purpose of

securing property tax increment bonds more than seventy-five

percent of the property tax increment attributable to a

property tax levy by that taxing entity.

Section 18. BONDING AUTHORITY--PROPERTY TAX

INCREMENT.--

A. Subject to the limitations and in accordance

with Article 9 of the constitution of New Mexico and Sections

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6-15-1 and 6-15-2 NMSA 1978, a district board may issue and

dispose of property tax increment bonds for the purpose of

securing funds for undertaking tax increment development

projects within the purposes of the Tax Increment for

Development Act.

B. Before property tax increment bonds are issued,

the district board shall submit to a vote of the registered

qualified electors within the tax increment development area

and the nonresident electors owning property within the tax

increment development area the question of issuing the

property tax increment bonds.

C. The district board shall give notice of the

time and place of holding the election and the purpose for

which the property tax increment bonds are to be issued.

Notice of a property tax increment bond election shall be

given as required by the Tax Increment for Development Act.

D. The question shall state the purpose for which

the property tax increment bonds are to be issued and the

amount of the issue. If property tax increment bonds are to

be issued for more than one purpose, a separate question shall

be submitted to the voters for each purpose to be voted upon.

The ballots shall contain words indicating the purpose of the

bond issued and a place for a vote in favor of or in

opposition to each property tax increment bond issue. The

ballots shall be deposited in a separate ballot box, unless

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voting machines are used.

E. Except as otherwise provided in the Tax

Increment for Development Act, property tax increment bonds:

(1) may have interest, principal value or

any part thereof payable at intervals or at maturity, as

determined by the governing body;

(2) may be subject to a prior redemption at

the district's option at a time or upon terms and conditions

with or without payment of premium or premiums, as determined

by the district board;

(3) may mature at any time not exceeding

twenty-five years after the date of issuance;

(4) may be serial in form and maturity or

may consist of one bond payable at one time or in installments

or may be in another form, as determined by the district

board;

(5) shall be sold for cash at, above or

below par and at a price that results in a net effective

interest rate that does not exceed the maximum permitted by

the Public Securities Act and the Short-Term Interest Rate

Act; and

(6) may be sold at public or negotiated

sale.

F. Except as otherwise provided by law, the

district board shall determine the denominations, places of

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payment, terms and conditions and the form of property tax

increment bonds.

G. The secretary and treasurer of the district

board shall sign property tax increment bonds.

H. The property tax increment bonds may be

executed in the manner provided by the Uniform Facsimile

Signature of Public Officials Act.

Section 19. REFUNDING BONDS.--

A. A district board that has issued bonds in

accordance with the Tax Increment for Development Act may

issue refunding bonds for the purpose of refinancing, paying

and discharging all or any part of outstanding bonds for the:

(1) acceleration, deceleration or other

modification of the payment of the outstanding bonds,

including, without limitation, any capitalization of any

interest thereon in arrears or about to become due for any

period not exceeding two years from the date of the refunding

bonds;

(2) purpose of reducing interest costs or

effecting other economies; or

(3) purpose of modifying or eliminating

restrictive contractual limitations:

(a) pertaining to the issuance of

additional bonds; or

(b) concerning the outstanding bonds or

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facilities relating to the outstanding bonds.

B. A district board may pledge irrevocably for the

payment of interest, principal and premium, if any, on

refunding bonds the appropriate pledged revenues, which may be

pledged to an original issue of bonds.

C. Refunding bonds may be issued separately or in

combination in one series or more.

D. Refunding bonds shall be authorized by

resolution. Bonds that are refunded shall be paid at maturity

or on any permitted prior redemption date in the amounts, at

the time and places and, if called prior to maturity, in

accordance with any applicable notice provisions, all as

provided in the proceedings authorizing the issuance of the

refunded bonds or otherwise appertaining thereto, except for

any such bond that is voluntarily surrendered for exchange or

payment by the holder or owner.

E. The principal amount of the refunding bonds may

exceed the principal amount of the refunded bonds and may also

be less than or the same as the principal amount of the bonds

being refunded if provision is duly and sufficiently made for

the payment of the refunded bonds.

F. The proceeds of refunding bonds, including

accrued interest and premiums appertaining to the sale of

refunding bonds, shall be immediately applied to the

retirement of the bonds being refunded or placed in escrow in

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a commercial bank or trust company that possesses and

exercises trust powers and that is a member of the federal

deposit insurance corporation. The proceeds shall be applied

to the principal of, interest on and any prior redemption

premium due in connection with the bonds being refunded;

provided that the refunding bond proceeds, including accrued

interest and premiums appertaining to a sale of refunding

bonds, may be applied to the establishment and maintenance of

a reserve fund and to the payment of expenses incidental to

the refunding and the issuance of the refunding bonds, the

interest on those bonds and the principal of those bonds, or

both interest and principal as the district board determines.

This section does not require the establishment of an escrow

if the refunded bonds and the amounts necessary to retire the

refunded bonds within that time are deposited with the paying

agent for the refunded bonds. Any such escrow shall not

necessarily be limited to proceeds of refunding bonds but may

include other money available for its purpose. Proceeds in

escrow pending such use may be invested or reinvested in

bills, certificates of indebtedness, notes or bonds that are

direct obligations of, or the principal and interest of which

obligations are unconditionally guaranteed by, the United

States or in certificates of deposit of banks that are members

of the federal deposit insurance corporation; provided that

the par value of the certificates of deposit is collateralized

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by a pledge of obligations or by a pledge of payment that is

unconditionally guaranteed by the United States; and further

provided that the par value of those obligations is at least

seventy-five percent of the par value of the certificates of

deposit. Such proceeds and investments in escrow, together

with any interest or other income to be derived from any such

investment, shall be in an amount at all times sufficient as

to principal, interest, any prior redemption premium due and

any charges of the escrow agent payable therefrom to pay the

bonds being refunded as they become due at their respective

maturities or at any designated prior redemption date or dates

in connection with which the municipality shall exercise a

prior redemption option. A purchaser of a refunding bond

issued is not responsible for the application of the proceeds

by the district or any of its officers, agents or employees.

G. Refunding bonds may bear additional terms and

provisions as determined by the district subject to the

limitations in this section relating to original bond issues.

Refunding bonds are not subject to the provisions of any other

statute.

H. District refunding bonds:

(1) may have interest, principal value or

any part thereof payable at intervals or at maturity, as

determined by the district board;

(2) may be subject to prior redemption at

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the district's option at a time or times and upon terms and

conditions with or without payment of premium or premiums, as

determined by the district board;

(3) may be serial in form and maturity or

may consist of a single bond payable in one or more

installments or may be in another form, as determined by the

district board; and

(4) shall be exchanged for the bonds and any

matured unpaid interest being refunded at not less than par or

sold at public or negotiated sale at, above or below par and

at a price that results in a net effective interest rate that

does not exceed the maximum permitted by the Public Securities

Act.

I. At a regular or special meeting, a district

board may adopt a resolution by majority vote to authorize the

issuance of the refunding bonds.

Section 20. GENERAL BONDING AUTHORITY OF A TAX

INCREMENT DEVELOPMENT DISTRICT--OTHER LIMITATIONS.--

A. Except as otherwise provided in this section, a

district board shall not issue bonds against either gross

receipts tax increments or property tax increments without the

express written authorization of the department of finance and

administration, as evidenced by a letter signed by the

secretary of finance and administration. A district formed

and approved by a class A county or by a municipality within a

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class A county if the municipality has a population of more

than sixty-five thousand persons, according to the most recent

federal decennial census, is not required to obtain express

written authorization of the department of finance and

administration for the issuance of gross receipts tax

increment bonds or property tax increment bonds.

B. Prior to the issuance of indebtedness evidenced

by the gross receipts tax increment bonds or property tax

increment bonds issued by a district pursuant to the Tax

Increment for Development Act, the property owners within the

district shall contribute a minimum of twenty percent of the

initial public infrastructure costs, which may be reimbursed

with proceeds of gross receipts tax increment or property tax

increment bonds; unless the project to be financed with gross

receipts tax increment bonds or property tax increment bonds

is a metropolitan redevelopment project pursuant to the

Metropolitan Redevelopment Code.

C. The amount of indebtedness evidenced by the

gross receipts tax increment bonds or property tax increment

bonds issued pursuant to the Tax Increment for Development Act

shall not exceed the estimated cost of the public improvements

plus all costs connected with the public infrastructure

purposes and the issuance and sale of bonds, including,

without limitation, formation costs, credit enhancement and

liquidity support fees and costs.

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D. The indebtedness evidenced by the gross

receipts tax increment bonds or property tax increment bonds

shall not affect the general obligation bonding capacity of

the municipality or county in which the tax increment

development district is located.

E. The indebtedness evidenced by the gross

receipts tax increment bonds or property tax increment bonds

shall be payable only from the special funds into which are

deposited the gross receipts tax increments and property tax

increments as set forth in the Tax Increment for Development

Act.

F. Bonds issued by a tax increment development

district shall not be a general obligation of the state, the

county or the municipality in which the tax increment

development district is located and shall not pledge the full

faith and credit of the state, the county or the municipality

in which the tax increment development district is located.

Section 21. APPROVAL REQUIRED FOR ISSUANCE OF BONDS

AGAINST STATE GROSS RECEIPTS TAX INCREMENTS.--In addition to

all other requirements of the Tax Increment for Development

Act, prior to a district board issuing bonds against a gross

receipts tax increment attributable to the imposition of the

state gross receipts tax within a district:

A. the New Mexico finance authority shall review

the proposed issuance of the bonds and determine that the

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proceeds of the bonds will be used for a tax increment

development project in accordance with the district's tax

increment development plan and present the proposed issuance

of the bonds to the legislature for approval; and

B. the issuance of the bonds shall be specifically

authorized by law.

Section 22. EXEMPTION FROM TAXATION.--The bonds

authorized by the Tax Increment for Development Act and the

income from the bonds or any other instrument executed as

security for the bonds shall be exempt from all taxation by

the state or any political subdivision of the state.

Section 23. PROTECTION FROM IMPAIRMENT.--If the

provisions set forth in the Tax Increment for Development Act

impair the ability of a municipality, county or other public

body to meet its principal or interest payment obligations for

revenue bonds or general obligation bonds outstanding prior to

the effective date of the Tax Increment for Development Act

that are secured by the pledge of all or part of the

municipality, county or other public body's revenue gross

receipts tax or property tax, then the amount otherwise

payable to the district pursuant to the Tax Increment for

Development Act shall be paid instead to the municipality,

county or public body in an amount sufficient to meet any

required payment.

Section 24. TAX INCREMENT ACCOUNTING PROCEDURES.--A

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district board shall separately account for all revenues and

indebtedness based on gross receipts tax increments and

property tax increments. The district board shall

individually account for all gross receipts tax increments.

Section 25. MODIFICATION OF TAX INCREMENT DEVELOPMENT

AREA BOUNDARIES OR TAX INCREMENT DEVELOPMENT PLAN.--

A. After an election to form a district, an area

may be eliminated from the tax increment development area only

following a hearing conducted upon notice given to the owners

of land in the tax increment development area in the manner

prescribed for the formation hearing, adoption of a resolution

of intention to do so by the district board and voter approval

by the owners and resident qualified electors as provided in

the Tax Increment for Development Act. Real property within

the tax increment development area that is subject to the lien

of property taxes, special levies or other charges imposed

pursuant to the Tax Increment for Development Act shall not be

eliminated from the district while there are bonds outstanding

that are payable by those taxes, special levies or charges.

B. At any time after adoption of a resolution

creating a district, an area may be added to the district upon

the approval of the owners of real property in the proposed

additional area and the resident qualified electors residing

therein, as well as the owners of real property in the

district and resident qualified electors, in the same manner

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as required for the formation of a district.

C. The district board, following a hearing

conducted upon notice given to the owners of real property

located in the district in the manner prescribed for the

formation hearing, may, subject to the approval of the

governing body that approved the district's tax increment

development plan, amend the tax increment development plan in

any manner that it determines will not substantially reduce

the benefits to be received by any land in the district from

the public infrastructure on completion of the work to be

performed under the general plan. An election shall not be

required solely for the purposes of this subsection.

Section 26. TERMINATION OF TAX INCREMENT DEVELOPMENT

DISTRICT.--

A. A district shall be terminated by a resolution

of the district board that all of the following conditions

exist:

(1) all improvements owned by the district

have been, or provision has been made for all improvements to

be, conveyed to the municipality or county in which the

district is located;

(2) either the district does not have any

outstanding bond obligations or the municipality or county has

assumed all of the outstanding bond obligations of the

district; and

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(3) all obligations of the district pursuant

to any agreement with the municipality or county have been

satisfied.

B. Property in the district that is subject to the

lien of district taxes shall remain subject to the lien for

the payment of bonds, notwithstanding termination of the

district. The district shall not be terminated if any bonds

of the district remain outstanding unless an amount of money

sufficient, together with investment income thereon, to make

all payments due on the bonds either at maturity or prior

redemption has been deposited with a trustee or escrow agent

and pledged to the payment and redemption of the bonds. The

district may continue to operate after termination only as

needed to collect money and make payments on any outstanding

bonds.

Section 27. DEDICATION OF GROSS RECEIPTS TAX

INCREMENT--NOTICE TO TAXATION AND REVENUE DEPARTMENT.--If the

state board of finance or a taxing entity approves a

dedication or increase in the dedication of a portion of a

gross receipts tax increment to a district, the state board of

finance or the taxing entity shall notify the taxation and

revenue department of that approval at least one hundred

twenty days before the effective date of the dedication or

increase in the dedication.

Section 28. BOND TERM EXPIRATION.--The terms of bonds

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issued pursuant to the Tax Increment for Development Act for a

district, including refunding bonds, shall expire not more

than twenty-five years after the date that the first bonds are

issued for that district.

Section 29. A new section of the Tax Administration Act

is enacted to read:

"DISTRIBUTIONS--TAX INCREMENT DEVELOPMENT DISTRICTS.--A

distribution to a tax increment development district shall be

made by the department, in accordance with a notice that is

filed pursuant to the Tax Increment for Development Act with

respect to a taxing entity's dedication of a portion of a

gross receipts tax increment to the tax increment development

district."

Section 30. Section 7-1-6.4 NMSA 1978 (being Laws 1983,

Chapter 211, Section 9, as amended) is amended to read:

"7-1-6.4. DISTRIBUTION--MUNICIPALITY FROM GROSS

RECEIPTS TAX.--

A. Except as provided in Subsection B of this

section, a distribution pursuant to Section 7-1-6.1 NMSA 1978

shall be made to each municipality in an amount, subject to

any increase or decrease made pursuant to Section 7-1-6.15

NMSA 1978, equal to the product of the quotient of one and two

hundred twenty-five thousandths percent divided by the tax

rate imposed by Section 7-9-4 NMSA 1978 multiplied by the net

receipts for the month attributable to the gross receipts tax

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from business locations:

(1) within that municipality;

(2) on land owned by the state, commonly

known as the "state fairgrounds", within the exterior

boundaries of that municipality;

(3) outside the boundaries of any

municipality on land owned by that municipality; and

(4) on an Indian reservation or pueblo grant

in an area that is contiguous to that municipality and in

which the municipality performs services pursuant to a

contract between the municipality and the Indian tribe or

Indian pueblo if:

(a) the contract describes an area in

which the municipality is required to perform services and

requires the municipality to perform services that are

substantially the same as the services the municipality

performs for itself; and

(b) the governing body of the

municipality has submitted a copy of the contract to the

secretary.

B. If the reduction made by Laws 1991, Chapter 9,

Section 9 to the distribution under this section impairs the

ability of a municipality to meet its principal or interest

payment obligations for revenue bonds outstanding prior to

July 1, 1991 that are secured by the pledge of all or part of

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the municipality's revenue from the distribution made under

this section, then the amount distributed pursuant to this

section to that municipality shall be increased by an amount

sufficient to meet any required payment, provided that the

distribution amount does not exceed the amount that would have

been due that municipality under this section as it was in

effect on June 30, 1992.

C. A distribution pursuant to this section may be

adjusted for a distribution made to a tax increment

development district with respect to a portion of a gross

receipts tax increment dedicated by a municipality pursuant to

the Tax Increment for Development Act."

Section 31. Section 7-1-6.12 NMSA 1978 (being Laws

1983, Chapter 211, Section 17, as amended) is amended to read:

"7-1-6.12. TRANSFER--REVENUES FROM MUNICIPAL LOCAL

OPTION GROSS RECEIPTS TAXES.--

A. A transfer pursuant to Section 7-1-6.1 NMSA

1978 shall be made to each municipality for which the

department is collecting a local option gross receipts tax

imposed by that municipality in an amount, subject to any

increase or decrease made pursuant to Section 7-1-6.15 NMSA

1978, equal to the net receipts attributable to the local

option gross receipts tax imposed by that municipality, less

any deduction for administrative cost determined and made by

the department pursuant to the provisions of the act

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authorizing imposition by that municipality of the local

option gross receipts tax and any additional administrative

fee withheld pursuant to Subsection C of Section 7-1-6.41 NMSA

1978.

B. A transfer pursuant to this section may be

adjusted for a distribution made to a tax increment

development district with respect to a portion of a gross

receipts tax increment dedicated by a municipality pursuant to

the Tax Increment for Development Act."

Section 32. Section 7-1-6.13 NMSA 1978 (being Laws

1983, Chapter 211, Section 18, as amended) is amended to read:

"7-1-6.13. TRANSFER--REVENUES FROM COUNTY LOCAL OPTION

GROSS RECEIPTS TAXES.--

A. A transfer pursuant to Section 7-1-6.1 NMSA

1978 shall be made to each county for which the department is

collecting a local option gross receipts tax imposed by that

county in an amount, subject to any increase or decrease made

pursuant to Section 7-1-6.15 NMSA 1978, equal to the net

receipts attributable to the local option gross receipts tax

imposed by that county, less any deduction for administrative

cost determined and made by the department pursuant to the

provisions of the act authorizing imposition by that county of

the local option gross receipts tax and any additional

administrative fee withheld pursuant to Subsection C of

Section 7-1-6.41 NMSA 1978.

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B. A transfer pursuant to this section may be

adjusted for a distribution made to a tax increment

development district with respect a portion of a gross

receipts tax increment dedicated by a county pursuant to the

Tax Increment for Development Act."

Section 33. Section 7-1-6.46 NMSA 1978 (being Laws

2004, Chapter 116, Section 1) is amended to read:

"7-1-6.46. DISTRIBUTION TO MUNICIPALITIES--OFFSET FOR

FOOD DEDUCTION AND HEALTH CARE PRACTITIONER SERVICES

DEDUCTION.--

A. A distribution pursuant to Section 7-1-6.1 NMSA

1978 shall be made to a municipality in an amount, subject to

any increase or decrease made pursuant to Section 7-1-6.15

NMSA 1978, equal to the sum of:

(1) the total deductions claimed pursuant to

Section 7-9-92 NMSA 1978 for the month by taxpayers from

business locations attributable to the municipality multiplied

by the sum of the combined rate of all municipal local option

gross receipts taxes in effect in the municipality for the

month plus one and two hundred twenty-five thousandths

percent; and

(2) the total deductions claimed pursuant to

Section 7-9-93 NMSA 1978 for the month by taxpayers from

business locations attributable to the municipality multiplied

by the sum of the combined rate of all municipal local option

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gross receipts taxes in effect in the municipality for the

month plus one and two hundred twenty-five thousandths

percent.

B. The distribution pursuant to Subsection A of

this section is in lieu of revenue that would have been

received by the municipality but for the deductions provided

by Sections 7-9-92 and 7-9-93 NMSA 1978. The distribution

shall be considered gross receipts tax revenue and shall be

used by the municipality in the same manner as gross receipts

tax revenue, including payment of gross receipts tax revenue

bonds.

C. For the purposes of this section, "business

locations attributable to the municipality" means business

locations:

(1) within the municipality;

(2) on land owned by the state, commonly

known as the "state fairgrounds", within the exterior

boundaries of the municipality;

(3) outside the boundaries of the

municipality on land owned by the municipality; and

(4) on an Indian reservation or pueblo grant

in an area that is contiguous to the municipality and in which

the municipality performs services pursuant to a contract

between the municipality and the Indian tribe or Indian pueblo

if:

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(a) the contract describes an area in

which the municipality is required to perform services and

requires the municipality to perform services that are

substantially the same as the services the municipality

performs for itself; and

(b) the governing body of the

municipality has submitted a copy of the contract to the

secretary.

D. A distribution pursuant to this section may be

adjusted for a distribution made to a tax increment

development district with respect to a portion of a gross

receipts tax increment dedicated by a municipality pursuant to

the Tax Increment for Development Act."

Section 34. Section 7-1-6.47 NMSA 1978 (being Laws

2004, Chapter 116, Section 2) is amended to read:

"7-1-6.47. DISTRIBUTION TO COUNTIES--OFFSET FOR FOOD

DEDUCTION AND HEALTH CARE PRACTITIONER SERVICES DEDUCTION.--

A. A distribution pursuant to Section 7-1-6.1 NMSA

1978 shall be made to a county in an amount, subject to any

increase or decrease made pursuant to Section 7-1-6.15 NMSA

1978, equal to the sum of:

(1) the total deductions claimed pursuant to

Section 7-9-92 NMSA 1978 for the month by taxpayers from

business locations within a municipality in the county

multiplied by the combined rate of all county local option

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gross receipts taxes in effect for the month that are imposed

throughout the county;

(2) the total deductions claimed pursuant to

Section 7-9-92 NMSA 1978 for the month by taxpayers from

business locations in the county but not within a municipality

multiplied by the combined rate of all county local option

gross receipts taxes in effect for the month that are imposed

in the county area not within a municipality;

(3) the total deductions claimed pursuant to

Section 7-9-93 NMSA 1978 for the month by taxpayers from

business locations within a municipality in the county

multiplied by the combined rate of all county local option

gross receipts taxes in effect for the month that are imposed

throughout the county; and

(4) the total deductions claimed pursuant to

Section 7-9-93 NMSA 1978 for the month by taxpayers from

business locations in the county but not within a municipality

multiplied by the combined rate of all county local option

gross receipts taxes in effect for the month that are imposed

in the county area not within a municipality.

B. The distribution pursuant to Subsection A of

this section is in lieu of revenue that would have been

received by the county but for the deductions provided by

Sections 7-9-92 and 7-9-93 NMSA 1978. The distribution shall

be considered gross receipts tax revenue and shall be used by

the county in the same manner as gross receipts tax revenue,

including payment of gross receipts tax revenue bonds.

C. A distribution pursuant to this section may be

adjusted for a distribution made to a tax increment

development district with respect a portion of a gross

receipts tax increment dedicated by a county pursuant to the

Tax Increment for Development Act."

Section 35. EFFECTIVE DATE.--The effective date of the

provisions of Sections 15 and 16 of this act is January 1,

2007.

Section 36. EMERGENCY.--It is necessary for the public

peace, health and safety that this act take effect

immediately. HTRC/HB 462

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