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

SPONSOR Williams

ORIGINAL DATE

LAST UPDATED

2/12/07

2/22/07 HB 988/aHVEC

SHORT TITLE Special Zoning District Terms & Commissions

SB

ANALYST Propst

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Finance and Administration (DFA)

Taxation and Revenue Department (TRD)

New Mexico Association of Counties

SUMMARY

Synopsis of HVEC Amendment

DFA notes that the amendments clarify the type of taxing powers and election methods for their

imposition and makes the imposition of the tax constitutional and legal.

In order to meet constitutional muster and avoid taxation limits and non representation, the

amendment clarifies the type of taxing powers and election methods for their imposition.

The amendment also clarifies the issue of imposition of mill levy beyond maximum allowed

under law for operating. By allowing elections of affected parties to tax themselves, DFA reports

that the bill now meets constitutional muster.

Before the HVEC amendment, HB 988 would have allowed the special district commissioners to

impose up to 1 mill ($1 per $1,000 of taxable value) for operating purposes without the approval

of district voters. This would have illegally allocated taxes under the 20 mill constitutional limit

and would have had the potential to exceed the 20 mill limit in some counties.

House Bill 988/aHVEC – Page

2

The Department of Taxation and Revenue notes that prior to amendment, the proposed measure

would have probably violated the New Mexico constitution and related statutes. Article 8,

Section 2 of the constitution states that property tax rates in excess of 20 mills may not be

imposed unless approved by voters. Section 7-37-7 NMSA 1978 allocates the 20-mill total that

may be imposed without voter approval as follows: 11.85 mills to counties, 7.65 mills to

municipalities and .5 mills to school districts. Hence special zoning district commissioners may

not approve property tax levies without voter approval. The Voters and Election Committee

amendment requires commissions to seek voter approval of proposed (maximum 1-mill)

property tax levies in special or general elections. The amendment also requires special zoning

districts to compensate counties for the cost of the associated elections.

The New Mexico Association of Counties takes the position that this bill will create a morass of

conflicting zoning and taxing problems within a county by granting an excessive amount of

authority to special zoning commissions. These commissions would be given excessive and far

reaching authority to impose zoning regulations and restrictions on top of and in addition to

those already imposed by county commissions or extraterritorial zoning authorities. This creates

an unwieldy and probably unworkable situation in terms of enforcing zoning regulations. In

addition, the authority of the special zoning commission to impose taxes requires additional work

and effort for county assessors and treasurers in assessing and collecting property taxes within

the district. The county has absolutely no authority or control over these special zoning

commissions, yet has to perform a variety of services on behalf of the zoning commission.

Synopsis of Original Bill

House Bill 988 broadens the powers of special zoning districts and authorizes revenue powers to

pay for their operations.

SIGNIFICANT ISSUES

HB 988 broadens the powers of special zoning districts by allowing the division of territory

under its jurisdiction into sub-districts, regulation of building construction and use, hiring a code

enforcement officers, requesting help from the county sheriff to take action against code

violators, and levying an ad valorum property tax to cover operating costs. HB 988 also staggers

terms of zoning district commissioners.

DFA notes that while special zoning districts enable zoning for citizens in an area that want and

need zoning, they must be carefully balanced to maintain a connection to the county's

comprehensive plan and ensure accountability to elected county commissioners. And with the

ability to develop new regulations on building construction and use, builders may face a

bewildering array of differing zoning and building codes.

TECHNICAL ISSUES

DFA reports that the Special Zoning Enabling Act has been rarely used in New Mexico, in part

due to a court case ruling them unconstitutional without a size limit. Subsequent legislation fixed

that. Currently there is a special zoning district in Paradise Hills on the west side in Bernalillo

County. There are two special zoning districts in northern Socorro County, where people wanted

zoning, initially to prevent power plants from coming into the area. As Socorro County does not

have zoning, they organized, voted, and created two special zoning districts. They had to create

House Bill 988/aHVEC – Page

3

two to cover most of the area as these districts are limited in both the size of the area covered and

by population.

WEP/csd