SENATE BILL 236

56th legislature - STATE OF NEW MEXICO - second session, 2024

INTRODUCED BY

Carrie Hamblen and Cristina Paraj n

 

 

 

 

 

AN ACT

RELATING TO THE METROPOLITAN REDEVELOPMENT CODE; AMENDING PROCEDURES FOR DETERMINING GROSS RECEIPTS TAX INCREMENTS USED TO FUND METROPOLITAN REDEVELOPMENT PROJECTS; DELAYING THE EFFECTIVE DATE OF LAWS 2023, CHAPTER 112.

 

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

     SECTION 1. That version of Section 3-60A-21 NMSA 1978 (being Laws 1979, Chapter 391, Section 21, as amended) that is to become effective January 1, 2025 is amended to read:

     "3-60A-21. PROPERTY AND GROSS RECEIPTS TAX INCREMENTS--PROCEDURES.--

          A. The procedures to be used in determining a property tax increment are:

                (1) the local government shall, after approval of a metropolitan redevelopment plan, notify the county assessor of the taxable parcels of property within the metropolitan redevelopment area;

                (2) upon receipt of the notification, the county assessor shall identify the parcels of property within the metropolitan redevelopment area within their respective jurisdictions and certify to the county treasurer the net taxable value of the property at the time of notification as the base value for the distribution of property tax revenues authorized by the Property Tax Code. If because of acquisition by the local government the property becomes tax exempt, the county assessor shall note that fact on their respective records and so notify the county treasurer, but the county assessor and the county treasurer shall preserve a record of the net taxable value at the time of inclusion of the property within the metropolitan redevelopment area as the base value for the purpose of distribution of property tax revenues when the parcel again becomes taxable. The county assessor is not required by this section to preserve the new taxable value at the time of inclusion of the property within the metropolitan redevelopment area as the base value for the purposes of valuation of the property;

                (3) if because of acquisition by the local government the property becomes tax exempt, when the parcel again becomes taxable, the local government shall notify the county assessor of the parcels of property that because of their rehabilitation or other improvement are to be revalued for property tax purposes. A new taxable value of this property shall then be determined by the county assessor. If no acquisition by the local government occurs, improvement or rehabilitation of property subject to valuation by the assessor shall be reported to the assessor as required by the Property Tax Code, and the new taxable value shall be determined as of January 1 of the tax year following the year in which the improvement or rehabilitation is completed; and

                (4) current tax rates shall then be applied to the new taxable value of property included in the metropolitan redevelopment area. The amount by which the revenue received exceeds that which would have been received by application of the same rates to the base value before inclusion in the metropolitan redevelopment area shall be multiplied by the percentage of the increment dedicated by the local government pursuant to Section 3-60A-23 NMSA 1978, credited to the local government and deposited in the metropolitan redevelopment fund. This transfer shall take place only after the county treasurer has been notified to apply the procedures pursuant to this subsection to property included in a metropolitan redevelopment area. Unless the entire metropolitan redevelopment area is specifically included by the local government for purposes of tax increment financing, the payment by the county treasurer to the local government shall be limited to those properties specifically included. The remaining revenue shall be distributed to participating units of government as authorized by the Property Tax Code.

          B. The procedures to be used in determining a gross receipts tax increment are:

                [(1) after approval of a metropolitan redevelopment area, a dedication is made pursuant to Section 3-60A-23 NMSA 1978 and at least one hundred twenty days before the effective date of the dedication, the local government shall notify the taxation and revenue department of the geographical area within the metropolitan redevelopment area and the percentages of a gross receipts tax increment;

                (2) within ninety days of receipt of the notification, the taxation and revenue department shall certify to the local government the base year gross receipts tax revenue amounts, which shall be calculated as]

                (1) the local government shall notify the taxation and revenue department of the geographic boundaries of the metropolitan redevelopment area;

                (2) by the January 1 or July 1 following at least ninety days after receipt of the notice of the geographic boundaries, the taxation and revenue department shall designate a reporting location code for the metropolitan redevelopment area pursuant to Section 7-1-14 NMSA 1978;

                (3) using data from the twelve months of reporting periods following designation of the reporting location code, the taxation and revenue department shall calculate the gross receipts tax revenue for the base year as follows:

                     (a) the amount of the local government's local option gross receipts tax revenue attributable to the gross receipts [of persons engaging in business in] sourced to the metropolitan redevelopment area pursuant to Section 7-1-14 NMSA 1978 in the previous [fiscal year, less any local option gross receipts tax revenue attributable to construction activities located within the metropolitan redevelopment area] twelve months; and

                     (b) the amount of state gross receipts tax revenue attributable to [the] gross receipts [of persons engaging in business in] sourced to the metropolitan redevelopment area pursuant to Section 7-1-14 NMSA 1978 in the previous [fiscal year] twelve months, less any [state gross receipts tax revenue attributable to construction activities located within the metropolitan redevelopment area and, if the local government is a municipality, any] amount distributed to the municipality pursuant to Section 7-1-6.4 NMSA 1978 attributable to [the] gross receipts [of persons engaging in business in] sourced to the metropolitan redevelopment area; and

                [(3) within six months of the end of each fiscal year following]

                (4) following making the calculation of the gross receipts tax revenue for the base year:

                     (a) the taxation and revenue department shall compare the amounts of gross receipts tax revenues of the base year with the amounts of gross receipts tax revenues of that following [fiscal year] twelve months, using the same calculation methods as provided in Paragraph [(2)] (3) of this subsection [except the amounts of gross receipts tax revenues of the following fiscal year shall include revenue attributable to construction activities located within the metropolitan redevelopment area]; and

                     (b) if there is an increase between the gross receipts tax revenue of the base year and the gross receipts tax revenue of that following [fiscal year] twelve months, the taxation and revenue department shall distribute, pursuant to Section 7-1-6.71 NMSA 1978, the sum of: 1) the product of the total rate of the local government's local option gross receipts tax multiplied by the increased amount of the local government's local option gross receipts tax revenue, further multiplied by the percentage of the gross receipts tax increment dedicated by the local government pursuant to Section 3-60A-23 NMSA 1978; plus 2) the product of the state gross receipts tax rate multiplied by the increased amount of the state gross receipts tax revenue, further multiplied by the percentage of the gross receipts tax increment dedicated by the state board of finance pursuant to Section 3-60A-23 NMSA 1978.

          C. The procedures specified in this section shall be followed annually for a maximum period of twenty years following the date of notification provided by this section.

          D. As used in this section:

                (1) "local option gross receipts tax revenue" means revenue transferred to the local government pursuant to Section 7-1-6.12 or 7-1-6.13 NMSA 1978, as appropriate; and

                (2) "state gross receipts tax revenue" means revenue received from the gross receipts tax imposed pursuant to Section 7-9-4 NMSA 1978."

     SECTION 2. Section 7-1-6.71 NMSA 1978 (being Laws 2023, Chapter 112, Section 11) is amended to read:

     "7-1-6.71. DISTRIBUTION--METROPOLITAN REDEVELOPMENT FUND.--A distribution for a metropolitan redevelopment project pursuant to the Metropolitan Redevelopment Code shall be made to the metropolitan redevelopment fund in accordance with [a notice filed by a municipality or county pursuant to] the provisions of Subparagraph (b) of Paragraph (4) of Subsection B of Section 3-60A-21 NMSA 1978 with respect to a dedication of a gross receipts tax increment."

     SECTION 3. Laws 2023, Chapter 112, Section 15 is amended to read: 

     "SECTION 15. EFFECTIVE DATE.--The effective date of the provisions of this act is [July 1, 2024] January 1, 2025."

     SECTION 4. EFFECTIVE DATE.--The effective date of the provisions of Sections 1 and 2 of this act is January 1, 2025.

- 8 -