Current through Register Vol. 35, No. 18, September 24, 2024
A.
Contents of application. A district requesting a dedication of a portion of the
state's increment or the revision of its base year shall submit an application
that includes:
(1) a conceptual site plan for
the project;
(2) the tax increment
development plan approved by the governing body that includes:
(a) a map depicting the geographical
boundaries of the area proposed for inclusion within the district; this map
should indicate any existing infrastructure and residential, commercial and
industrial structures and development;
(b) the estimated time necessary to complete
the project;
(c) a description and
the estimated cost of all public improvements proposed for the
project;
(d) whether it is proposed
to use gross receipts 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 project and the portion of that gross receipts
tax increment to be allocated during the time necessary to complete the payment
of the project;
(f) the estimated
annual property tax increment to be generated by the project and the portion of
that property tax increment to be allocated during the time necessary to
complete the payment of the project;
(g) the general proposed land uses for the
project;
(h) the number of jobs
expected to be created by the project classified at the three digit level of
the most recent North American industry classification system (NAICS), and
separated into full-time and part time jobs;
(i) the amount and characteristics of
workforce housing expected to be created by the project;
(j) the location and characteristics of
public school facilities expected to be created, improved, rehabilitated or
constructed by the 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 project; and
(l) the amount and type of private investment
in each project;
(3)
information on the availability of other public and private funds for the
project, including:
(a) whether it is proposed
to finance any portion of the infrastructure using the provisions of Section
5-15-13 NMSA 1978, which permits the property owners within a district to
impose a property tax rate of up to five dollars ($5.00) per one thousand
dollars ($1,000) of net taxable value for a period of up to four years;
and
(b) whether it is proposed to
establish an improvement district and finance any portion of the infrastructure
using the provisions of Sections 3-33-1 through -43 NMSA 1978, as they may be
amended, and whether the bonds sold through this mechanism conform to the limit
of twenty-five percent of total property value established in Section 3-33-14
NMSA 1978;
(4) an
economic development plan, including an industrial cluster analysis if
appropriate, for attracting businesses to the district;
(5) market feasibility study that includes:
(a) the number of residential (single family
and multi-family) units and the square footage of commercial, retail and
industrial space to be built by calendar year;
(b) the average price per square foot or by
unit by type;
(c) the market supply
(or availability) and the value of each property type in the area and
surrounding areas with reference to any other planned development in the
surrounding areas; and
(d) market
demand (or absorption rates) for each property type in the area and surrounding
areas with reference to any other planned development in the surrounding
areas;
(6) economic
analysis to include:
(a) employment and salary
projections by industry as classified at the three digit level of the most
recent North American industry classification system (NAICS) in the district by
calendar year, whether the jobs are temporary (i.e., construction) or permanent
employment, and whether the jobs are full-time or part-time;
(b) population projections by calendar
year;
(c) housing unit projections
and type by calendar year;
(d)
economic output from direct and indirect impacts within the district with
temporary construction activity listed separately; separate listing of economic
base employment within the district, indirect and induced employment within the
district and in surrounding areas is optional, but encouraged;
(e) the anticipated net revenue impact on the
state general fund shall be calculated as follows:
(i) the sum of all general fund revenues
generated by economic activity within the district by type of revenue (e.g.
gross receipts tax from retail sales, gross receipts tax from services provided
to New Mexico businesses, personal income tax, etc.) less:
1) the sum of all general fund costs to the
state associated with the provision of services to individuals and businesses
(e.g. public schools);
2) the
estimated amount of tax incentives provided to promote economic development
within the district under current law;
3) the amount of the state's increment
requested by the district; and
4)
the total amount of capital outlay appropriated for use in the district under
current law;
(ii) the
net revenue impact on the state general fund must be expressed in constant
dollar terms; and
(iii) the net
present value of general fund revenues less general fund costs over the life of
the bonds shall be submitted; a discount rate equal to five percent shall be
used in this calculation;
(7) letter from governing body verifying its
ability to pay for operations and maintenance of public infrastructure created
by the district and provide basic services such as law enforcement and public
health and safety within the district;
(8) a detailed timeline of project
completion, including public infrastructure expenditures;
(9) a financing plan to include:
(a) information supporting why tax increment
financing is needed;
(b) debt
structure and terms, including maturity and estimated interest rates;
(c) pro-forma for all bonds to be issued for
the project (including property tax increment bonds, if proposed);
and
(d) projected coverage ratios
for all bonds;
(10)
developer information to include:
(a)
organizational chart;
(b)
experience in developing similar projects and utilizing tax increment
financing;
(c) audited financial
statements for the past three years; and
(d) identify past and pending administrative
actions and litigation in which the developer is involved that could impact the
current financial viability of the developer; briefly describe the nature of
the proceedings and current status or final result;
(11) any other information regarding the
economic benefits to the project's community and to the state or which the
district believes will aid the board in considering the request for the
dedication;
(12) enacted resolution
of governing body approving the plan;
(13) enacted resolution of governing body
forming the district;
(14) enacted
resolution of each governing body dedicating a portion of its share of the
applicable tax increments;
(15)
approved master development agreement with governing body;
(16) form of board resolution approving the
dedication of a portion of the state's increment; and
(17) in addition to the submission
requirements above, for requests for the approval of a revised base year:
(a) a detailed project history including a
summary of past appearances before the board, legislative efforts related to
the project, and activity to date in the district;
(b) a written summary of the reasons why
rebasing is requested and stating the revised base year requested;
and
(c) a certification of the
district that the district's base year has never been revised and that no gross
receipts tax increment bonds attributable to the district have been
issued;
(d) tabular or verbal
comparison of the information provided pursuant to Paragraphs (2) through (6),
(8) and (9) of this Subsection at the time a revised base year is requested
versus at the time the dedication of a portion of the state's increment was
initially approved, with explanations of any substantive changes;
(e) a copy of the resolution adopted by the
district declaring the district's intent to revise its base year;
(f) a copy of all comments on the intent to
revise the base year received from the taxation and revenue department, the
developer and the local governments that have dedicated a tax increment to the
district; and
(g) any other related
documentation.
B. Timeline and submittal requirements. Any
application for dedication of a portion of the state's increment or approval of
a revised base year shall be considered by the board at its regular meeting in
December or July of each year. Except as provided in this paragraph for
applications for the approval of a revised base year, complete applications
must be submitted no later than the preceding January 1 for consideration at
the board's July meeting, or by July 1 for consideration at the board's
December meeting. For applications for a revised base year, the submission
requirements of Subparagraphs (e), (f) and (g) of Paragraph (17) of Subsection
A of 2.61.3.9 NMAC must be received no more than 45 days after a district's
adoption of a resolution declaring the intent to revise its base year. All
required materials must be submitted electronically and tables must be
submitted as Microsoft Excel files with access to all data, including
assumptions and formulae. If a district has not been formed by the submittal
deadline, please submit all of the documents listed in Paragraphs (1) through
(12) and (16) of Subsection A of 2.61.3.9 NMAC in the initial application, and
provide Paragraphs (13), (14) and (15) of Subsection A within five calendar
days of adoption or 21 calendar days prior to the meeting at which the board is
to consider the application, whichever occurs first. If a governing body has
not adopted a resolution pledging a portion of its gross receipts tax increment
or its property tax increment or both by this deadline, that resolution shall
be provided immediately upon its adoption and, if the adoption does not occur
prior to the meeting at which the board is to consider the application, the
board may take any action it deems appropriate, such as imposing a condition
requiring such dedication or deferring action until a dedication is made. In
addition, the board may require informational presentations at a meeting prior
to the meeting at which the application is to be considered. Upon request, the
board, in its discretion, may waive provision of any information otherwise
required by this rule provided that the requesting party can demonstrate that
other documents that are provided are equivalent to or satisfy the rationale
for submitting the information and that the state's interest will continue to
be sufficiently protected.
(1) In addition to
submitting an application to the board, additional copies of an application
must be submitted to the department of finance and administration economic
analysis unit, the New Mexico finance authority, the taxation and revenue
department office of the secretary, and legislative finance committee staff at
their respective offices. The board may require the submission of supplemental
information during its review process. All information submitted pursuant to
this rule will be publicly available.
(2) Prior to initiating the preparation of an
application, a developer is encouraged to schedule a "pre-application"
conference to discuss the project and proposed methodology with board staff and
the economic analysis unit of the department of finance and
administration.
(3) The board, in
its discretion, may waive certain requirements included in the rule when the
application demonstrates why it is in the best interest of the state to do
so.
C. Staff
methodology. The board will evaluate the project as a whole and evaluate each
district on a stand alone basis. The board will utilize the services of the
department of finance and administration economic analysis unit and may seek
the assistance of an independent economic consultant to evaluate each request.
The district is encouraged to submit any additional data that may be helpful
for use in this review. The department of finance and administration economic
analysis unit or any independent economic consultant will use the following
methodology in evaluating each request:
(1)
validation of any economic impact models using standard economic impact
tools;
(2) determination of the
viability of the project under the following scenarios:
(a) requested tax increment is
approved;
(b) requested tax
increment is not approved;
(c) some
portion of the requested tax increment is approved or increment for less than
all districts if multi-district project;
(d) under different assumptions about the
relocation of existing businesses within New Mexico, and economic factors such
as inflation and economic growth.
(3) evaluation of the project recognizing
other economic development efforts by other economic development entities
including other districts;
(4)
assessment of impact on surrounding communities and non-participating
governments;
(5) determination of
the ratio of public to private capital contributions and the ratio of state
contributions compared to local contributions;
(6) validation of the finance plan; the board
will seek input from New Mexico finance authority staff regarding interest
rates, coverage ratios and other bond financing features to ensure that they
are reasonable and appropriate; and
(7) in the case of applications for approval
of a revised base year, review of public comments received from the taxation
and revenue department, the department of finance and administration, the
developer and the local governments that have dedicated a tax increment to the
district following the district's adoption of a resolution indicating the
district's intent to revise its base year.
D. Board approval, effective date and
duration.
(1) The board's approval of the
dedication of a portion of the state's increment or of a revised base year
shall be effective January 1 or July 1 following board action. The board may
condition its dedication on the approval by the legislature of the issuance of
bonds. In that case, the dedication shall be effective on the January 1 or July
1 following legislative and, if required, department of finance and
administration approval of the bonds, whichever date next succeeds the last
approval to be obtained.
(2)
Dedications which require legislative approval of bonds and bonds requiring
department of finance and administration approval must be approved within four
years of the board's approval of the dedication unless the district requests
and receives approval of an extension of time from the board prior to the
expiration of the four year period. For dedications approved by the board prior
to July 15, 2010, an extension may be requested from the board on or before its
December 2014 meeting. Any request for extension of dedication shall specify
the requested extension period, include a description of efforts to receive
legislative, and, if required, department of finance and administration
approval of the bonds, and provide updated economic and financial information
about the district and the project that is sufficient to allow the board to
make a finding that approval of the extension of dedication is in the best
interest of the state.
(3) Any
substantive change to the tax increment development plan after a dedication has
been made must be reported to the board pursuant to Subsection E of
2.61.3.10
NMAC and will require board approval, without which the board's approval of the
dedication shall expire.
(4) A
dedication shall expire upon full payment or early defeasance of the bonds in
full.
