House Bill text for HB0392

HOUSE BILL 392

49th legislature - STATE OF NEW MEXICO - first session, 2009

INTRODUCED BY

Elias Barela

AN ACT

RELATING TO TAX INCREMENT DEVELOPMENT DISTRICTS; DEFINING AND ESTABLISHING PROCEDURES FOR GREENFIELD TAX INCREMENT DEVELOPMENT DISTRICTS; PROVIDING FOR EXPANDED NOTICE ABOUT AND OVERSIGHT OF TAX INCREMENT DEVELOPMENT DISTRICTS; CREATING A TASK FORCE; MAKING AN APPROPRIATION; DECLARING AN EMERGENCY.

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

Section 1. Section 5-15-1 NMSA 1978 (being Laws 2006, Chapter 75, Section 1) is amended to read:

"5-15-1. SHORT TITLE.--[Sections 1 through 27 of this act] Chapter 5, Article 15 NMSA 1978 may be cited as the "Tax Increment for Development Act"."

Section 2. Section 5-15-3 NMSA 1978 (being Laws 2006, Chapter 75, Section 3) is amended to read:

"5-15-3. DEFINITIONS.--As used in the Tax Increment for Development Act:

A. "base gross receipts taxes" means:

(1) the total amount of gross receipts taxes collected within a tax increment development district, as estimated by the governing body that adopted a resolution to form that district, in consultation with the taxation and revenue department, 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 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 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. "greenfield tax increment development district" means a tax increment development district that is described in a tax increment development plan that involves land, the majority of which has not been previously developed and is not currently served by municipal or county public infrastructure and for which the tax increment development plan primarily relies on the development of new residential and commercial structures rather than the redevelopment of existing residential and commercial structures;

[H.] I. "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.] J. "gross receipts tax increment bonds" means bonds issued by a district in accordance with the Tax Increment for Development Act, the pledged revenue for which is a gross receipts tax increment;

[J.] K. "local government" means a municipality or county;

[K.] L. "municipal option gross receipts taxes" means those gross receipts taxes imposed by municipalities pursuant to the Municipal Local Option Gross Receipts Taxes Act and designated by the governing body of the municipality to be available as part of the gross receipts tax increment;

[L.] M. "municipality" means an incorporated city, town or village;

[M.] N. "owner" means a person owning real property within the boundaries of a district;

[N.] O. "person" means an individual, corporation, association, partnership, limited liability company or other legal entity;

[O.] P. "project" means a tax increment development project;

[P.] Q. "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.] R. "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.] S. "public improvements" means on-site improvements and off-site improvements that directly or indirectly benefit a tax increment development district or facilitate development within a tax increment development area and that are dedicated to the governing body in which the district lies. "Public improvements" include:

(1) sanitary sewage systems, including collection, transport, treatment, dispersal, effluent use and discharge;

(2) drainage and flood control systems, including collection, transport, storage, treatment, dispersal, effluent use and discharge;

(3) water systems for domestic, commercial, office, hotel or motel, industrial, irrigation, municipal or fire protection purposes, including production, collection, storage, treatment, transport, delivery, connection and dispersal;

(4) highways, streets, roadways, bridges, crossing structures and parking facilities, including all areas for vehicular use for travel, ingress, egress and parking;

(5) trails and areas for pedestrian, equestrian, bicycle or other non-motor vehicle use for travel, ingress, egress and parking;

(6) pedestrian and transit facilities, parks, recreational facilities and open space areas for the use of members of the public for entertainment, assembly and recreation;

(7) landscaping, including earthworks, structures, plants, trees and related water delivery systems;

(8) public buildings, public safety facilities and fire protection and police facilities;

(9) electrical generation, transmission and distribution facilities;

(10) natural gas distribution facilities;

(11) lighting systems;

(12) cable or other telecommunications lines and related equipment;

(13) traffic control systems and devices, including signals, controls, markings and signage;

(14) school sites and facilities with the consent of the governing board of the public school district for which the facility is to be acquired, constructed or renovated;

(15) library and other public educational or cultural facilities;

(16) equipment, vehicles, furnishings and other personal property related to the items listed in this subsection;

(17) inspection, construction management, planning and program management and other professional services costs incidental to the project;

(18) workforce housing; and

(19) any other improvement that the governing body determines to be for the use or benefit of the public;

[S.] T. "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.] U. "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.] V. "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.] W. "tax increment development area" means the land included within the boundaries of a tax increment development district;

[W.] X. "tax increment development district" means a district formed for the purposes of carrying out tax increment development projects;

[X.] Y. "tax increment development plan" means a plan for the undertaking of a tax increment development project;

[Y.] Z. "tax increment development project" means activities undertaken within a tax increment development area to enhance the sustainability of the local, regional or statewide economy; to support the creation of jobs, schools and workforce housing; and to generate tax revenue for the provision of public improvements and may include:

(1) acquisition of land within a designated tax increment development area or a portion of that tax increment development area;

(2) demolition and removal of buildings and improvements and installation, construction or reconstruction of streets, utilities, parks, playgrounds and improvements necessary to carry out the objectives of the Tax Increment for Development Act;

(3) installation, construction or reconstruction of streets, water utilities, sewer utilities, parks, playgrounds and other public improvements necessary to carry out the objectives of the Tax Increment for Development Act;

(4) disposition of property acquired or held by a tax increment development district as part of the undertaking of a tax increment development project at the fair market value of such property for uses in accordance with the Tax Increment Development Act;

(5) payments for professional services contracts necessary to implement a tax increment development plan or project;

(6) borrowing to purchase land, buildings or infrastructure in an amount not to exceed the revenue stream that may be derived from the gross receipts tax increment or the property tax increment estimated to be received by a tax increment development district; and

(7) grants for public improvements essential to the location or expansion of a business;

[Z.] AA. "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.] BB. "workforce housing" means decent, safe and sanitary dwellings, apartments, single-family dwellings or other living accommodations that are affordable for persons or families earning less than eighty percent of the median income within the county in which the tax increment development project is located; provided that an owner-occupied housing unit is affordable to a household if the expected sales price is reasonably anticipated to result in monthly housing costs that do not exceed thirty-three percent of the household's gross monthly income; provided that:

(1) determination of mortgage amounts and payments are to be based on down payment rates and interest rates generally available to lower- and moderate-income households; and

(2) a renter-occupied housing unit is affordable to a household if the unit's monthly housing costs, including rent and basic utility and energy costs, do not exceed thirty-three percent of the household's gross monthly income."

Section 3. Section 5-15-4 NMSA 1978 (being Laws 2006, Chapter 75, Section 4) is amended to read:

"5-15-4. 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 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;

(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 from the proceeds from the sale of bonds issued by the tax increment development district 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.

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.

F. A governing body of the municipality or county within which tax increment development projects are proposed that adopts a resolution to form a district shall notify the secretary of taxation and revenue, the secretary of finance and administration and the director of the legislative finance committee of the governing body's action within ten days following the date on which the resolution was adopted. A copy of the adopted resolution shall be included in the notice sent pursuant to this subsection."

Section 4. Section 5-15-6 NMSA 1978 (being Laws 2006, Chapter 75, Section 6) is amended to read:

"5-15-6. 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 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, no later than ten days prior to the hearing to:

(a) all owners of real property within the proposed tax increment development area [no later than ten days prior to the hearing]; and

(b) the secretary of taxation and revenue, the secretary of finance and administration and the director of the legislative finance committee.

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 body and may be reviewed upon request; and

(6) a summary of the resolution as set forth in Subsection D of this section.

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 as soon as practicable after learning of the transfer."

Section 5. Section 5-15-9 NMSA 1978 (being Laws 2006, Chapter 75, Section 9) is amended to read:

"5-15-9. 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 development area lies;

(4) the taxation and revenue department; [and]

(5) the local government division of the department of finance and administration; and

(6) the director of the legislative finance committee.

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 6. Section 5-15-10 NMSA 1978 (being Laws 2006, Chapter 75, Section 10) is amended to read:

"5-15-10. 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 four members appointed by that governing body; provided, however, that the fifth member of the five-member board is the secretary of finance and administration or the secretary's designee with full voting privileges.

C. [Three] Two 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 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 7. Section 5-15-15 NMSA 1978 (being Laws 2006, Chapter 75, Section 15) is amended to read:

"5-15-15. TAX INCREMENT FINANCING--GROSS RECEIPTS TAX INCREMENT.--

A. Notwithstanding any law to the contrary, but in accordance with the provisions of the Tax Increment for Development Act, a tax increment development plan, as originally approved or as later modified, may contain a provision that a portion of certain gross receipts tax increments collected within the tax increment development area after the effective date of approval of the tax increment development plan may be dedicated for the purpose of securing gross receipts tax increment bonds pursuant to the Tax Increment for Development Act.

B. As to a district formed by a municipality, a portion of any of the following gross receipts tax increments may be paid by the state directly into a special fund of the district to pay the principal of, the interest on and any premium due in connection with the bonds of, loans or advances to, or any indebtedness incurred by, whether funded, refunded, assumed or otherwise, the authority for financing or refinancing, in whole or in part, a tax increment development project within the tax increment development area:

(1) municipal gross receipts tax authorized pursuant to the Municipal Local Option Gross Receipts Taxes Act;

(2) municipal environmental services gross receipts tax authorized pursuant to the Municipal Local Option Gross Receipts Taxes Act;

(3) municipal infrastructure gross receipts tax authorized pursuant to the Municipal Local Option Gross Receipts Taxes Act;

(4) municipal capital outlay gross receipts tax authorized pursuant to the Municipal Local Option Gross Receipts Taxes Act;

(5) municipal regional transit gross receipts tax authorized pursuant to the Municipal Local Option Gross Receipts Taxes Act;

(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;

(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 amount distributed to counties pursuant to Section 7-1-6.47 NMSA 1978; and

(7) the state gross receipts tax.

D. The gross receipts tax increment generated by the imposition of municipal or county local option gross receipts taxes specified by statute for particular purposes may nonetheless be dedicated for the purposes of the Tax Increment for Development Act if intent to do so is set forth in the tax increment development plan approved by the governing body, if the purpose for which the increment is intended to be used is consistent with the purposes set forth in the statute authorizing the municipal or county local option gross receipts tax.

E. An imposition of a gross receipts tax increment attributable to the imposition of a gross receipts tax by a taxing entity may be dedicated for the purpose of securing gross receipts tax increment bonds with the agreement of the taxing entity, evidenced by a resolution adopted by a majority vote of that taxing entity. A taxing entity shall not agree to dedicate for the purposes of securing gross receipts tax increment bonds more than seventy-five percent of its gross receipts tax increment attributable to the imposition of gross receipts taxes by the taxing entity. A resolution of the taxing entity to dedicate a gross receipts tax increment or to increase the dedication of a gross receipts tax increment shall become effective only on January 1 or July 1 of the calendar year.

F. An imposition of a gross receipts tax increment attributable to the imposition of the state gross receipts tax within a district less the distributions made pursuant to Section 7-1-6.4 NMSA 1978 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]:

(1) approve dedication of no more than fifty percent of the gross receipts tax increment attributable to the imposition of the state gross receipts tax within the district or, if the proposal is for a greenfield tax increment development district, approve no more than twenty percent of the gross receipts tax increment attributable to the imposition of the state gross receipts tax within the district unless the tax increment development plan has committed to implementing the actions set forth in Section 5-15-15.1 NMSA 1978; provided that the state board of finance:

(a) shall approve a tax increment for the state gross receipts tax for any tax increment development district that allows the state to retain adequate gross receipts revenue to provide fully for the estimated costs of state services and programs that the state is required to provide to the tax increment development district; and

(b) may require the petitioners who submit a petition to the governing body requesting that a tax increment development district be created to fund an independent review of the application and that the petitioners may claim reimbursement for the actual costs of the independent review from the proceeds from the sale of bonds issued by the tax increment development district if the district is formed and if gross receipts tax increment bonds or property tax increment bonds are issued pursuant to the Tax Increment for Development Act; and

(2) adopt a resolution that becomes effective only on January 1 or July 1 of the calendar year and that shall [find that] state the following findings:

[(1)] (a) the state board of finance has reviewed the request for the use of the state gross receipts tax;

[(2)] (b) 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)] (c) 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 director of the legislative finance committee, the taxation and revenue department and the local government division of the department of finance and administration when:

(1) a tax increment development plan has been approved that contains a provision for the allocation of a gross receipts tax increment;

(2) any outstanding bonds of the district have been paid off; and

(3) the purposes of the district have otherwise been achieved."

Section 8. A new section of the Tax Increment for Development Act, Section 5-15-15.1 NMSA 1978, is enacted to read:

"5-15-15.1. [NEW MATERIAL] GREENFIELD TAX INCREMENT DEVELOPMENT DISTRICTS--POTENTIAL TO INCREASE INCREMENT ABOVE TWENTY PERCENT.--

A. A tax increment development plan for a greenfield tax increment development district may include the specific actions set forth in this section to increase the increment of state gross receipts tax above twenty percent that the district may dedicate to payment for securing gross receipts tax increment bonds with the agreement of the state board of finance. The maximum tax increment that may be approved by the state board of finance with inclusion of all of the actions set forth in this subsection is fifty percent of the state gross receipts tax generated from within the tax increment development district. Each of the following actions specified to be implemented in the tax increment development plan for a greenfield tax increment development district may provide for an additional ten percent increment of state gross receipts tax generated from within the tax increment development district, subject to approval of the state board of finance. The actions that may be specified are the following:

(1) dedicating land improved with infrastructure for public school facilities and contributing a one-time payment per dwelling unit for capital improvements to the public school facilities. The amount of the one-time payment shall be negotiated by the affected school district and the tax increment development district board;

(2) building a transit-oriented development that includes a park-once strategy, integrates all modes of transit and, if appropriate to the region within which the tax increment development district is located, provides a framework for a future mass transit system; and

(3) building a minimum of twenty percent of all dwelling units within the tax increment development district to be workforce housing that is either sold to or rented by the occupant in which:

(a) at least fifteen percent of all dwelling units shall be affordable workforce housing; and

(b) at least five percent of all dwelling units shall be mid-range workforce housing.

B. As used in this section:

(1) "affordable workforce housing" means dwelling units that are offered for sale or lease at a price that is affordable by and that are, in fact, sold or leased to households, the annualized income of which is eighty percent of the area median income;

(2) "area median income" means the most current area median income as adjusted for household size and determined by the United States department of housing and urban development for the municipality, county or other measurement area used by that agency that includes the proposed tax increment development area;

(3) "dwelling unit" means a single unit or a portion of a building designated as a residence providing complete, independent living facilities for one or more persons, including permanent provisions for living, sleeping, eating, cooking and sanitation;

(4) "mid-range workforce housing" means dwelling units that are offered for sale or lease, and that are, in fact, sold or leased to households, the annualized income of which is between eighty and one hundred thirty percent of the area median income; and

(5) "park-once strategy" means a land use strategy involving locating retail uses, higher-density housing, transit and public facilities in walkable, mixed-use centers that are easy to reach by car, transit and bicycle and are easy to walk around in once there."

Section 9. Section 5-15-16 NMSA 1978 (being Laws 2006, Chapter 75, Section 16) is amended to read:

"5-15-16. 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; provided that revenue in excess of that needed to service bonds issued pursuant to the tax increment development plan and to provide a sufficient level of reserves, as determined by the district board of the district in consultation with the New Mexico finance authority, shall be returned to the taxing authority pursuant to procedures established by the taxing authority. The district 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 Public Securities Short-Term Interest Rate Act; and

(6) may be sold at public or negotiated 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 10. Section 5-15-21 NMSA 1978 (being Laws 2006, Chapter 75, Section 21) is amended to read:

"5-15-21. 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 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 and the maximum amount of bonds to be issued shall be specifically authorized by law."

Section 11. Section 5-15-24 NMSA 1978 (being Laws 2006, Chapter 75, Section 24) is amended to read:

"5-15-24. TAX INCREMENT ACCOUNTING PROCEDURES.--

A. A 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.

B. A district board shall account separately for all expenditures made from revenue from gross receipts tax increments or from the proceeds of the gross receipts tax increment bonds and property tax increment bonds issued for the tax increment development district.

C. A district board shall work with the department of finance and administration, the legislative finance committee and the appropriate taxing authority financial officer to establish annually the total value of the state and local economic incentives provided to entities within the tax increment development district, including industrial revenue bonds, all relevant tax exemptions, credits or deductions, job training incentives and capital outlay appropriations.

D. By October 1 of each year, annual reports of the accounting by the district board made pursuant to this section shall be submitted by the district board to the legislative finance committee, the department of finance and administration and the chief financial officer of each county and municipality in which the district is located."

Section 12. [NEW MATERIAL] TAX INCREMENT FINANCING TASK FORCE CREATED--MEMBERSHIP--DUTIES.--

A. The "tax increment financing task force" is created. The task force shall function from the date of its appointment until June 30, 2010.

B. The task force is composed of the following members:

(1) the secretary of finance and administration or the secretary's designee;

(2) the secretary of taxation and revenue or the secretary's designee;

(3) the chief executive officer of the New Mexico finance authority or the chief executive officer's designee;

(4) the executive director of the New Mexico association of counties or the director's designee;

(5) the executive director of the New Mexico municipal league or the director's designee;

(6) a member to be appointed by the executive director of the American federation of state, county and municipal employees New Mexico council 18;

(7) a member to be appointed by the New Mexico chapter of the American planning association;

(8) a member to be appointed by the chair of the legislative finance committee;

(9) one member, to be appointed by the governor, to represent a neighborhood association within or adjacent to an existing or proposed tax increment development district;

(10) one member, to be appointed by the New Mexico legislative council, to represent a neighborhood association within or adjacent to an existing or proposed tax increment development district;

(11) one at-large public member to be appointed by the governor; and

(12) one at-large public member to be appointed by the New Mexico legislative council.

C. Vacancies on the task force shall be filled by appointment by the original appointing authority.

D. Members of the task force are entitled to per diem and mileage as provided in the Per Diem and Mileage Act and shall receive no other compensation, perquisite or allowance.

E. Staff for the task force shall be provided by the legislative council service, the legislative finance committee, the department of finance and administration and the taxation and revenue department.

F. The task force shall evaluate the implementation and effect of the Tax Increment for Development Act to date and the consequences of the creation of additional greenfield tax increment development districts, including at a minimum, examination of the following issues:

(1) the long-term fiscal impact on the general fund;

(2) the long-term fiscal impact on municipal and county funding for recurring programs;

(3) the amount of state and local gross receipts taxes and property taxes committed to existing tax increment development districts;

(4) the experience of other states with tax increment financing, especially the inclusion of state-level taxes in tax increment financing;

(5) what the consequences have been of permitting tax increment development districts to enter into contracts for public improvements without regard to the provisions of the Procurement Code or local procurement regulations;

(6) the availability of other economic development incentives in existing tax increment development districts;

(7) what the consequences would be if tax increment revenues prove insufficient to cover debt service on tax increment development district bonds;

(8) whether approval by the local governing body that approved the district's tax increment development plan should be added as an explicit requirement for changes to tax increment development district boundaries and tax increment development district board membership; and

(9) other possible alternatives for providing financing for public infrastructure for new developments.

G. The task force shall report its findings and recommendations for legislation to the governor and the legislature by June 1, 2010.

Section 13. APPROPRIATION.--One hundred thousand dollars ($100,000) is appropriated from the general fund to the legislative council service for expenditure in fiscal years 2009 and 2010 to pay costs associated with the tax increment financing task force. Any unexpended or unencumbered balance remaining at the end of fiscal year 2010 shall revert to the general fund.

Section 14. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.

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