Please Support TIDD Reform at the Legislature THIS WEEK!

House Bill 451 will be heard tomorrow (Wednesday) by the House Judiciary Committee at 1:30pm. Please call or email (or attend) to show your support…it is very important!

The members of the House Judiciary Committee are:

Rep. Al Park (D) Chair
Rep. Joseph Cervantes (D) Vice Chair
Rep. Elias Barela- SPONSOR (D) Member
Rep. Gail Chasey - Co-signer (D) Member
Rep. Daniel R. Foley (R) Member
Rep. Antonio "Moe" Maestas (D) Member
Rep. W. Ken Martinez (D) Member
Rep. William "Bill" R. Rehm (R) Member
Rep. Mimi Stewart (D) Member
Rep. Thomas E. Swisstack (D) Member
Rep. Gloria C. Vaughn (R) Member
Rep. Eric A. Youngberg (R) Member
Rep. Teresa A. Zanetti (R) Member

You can find their contact information here: http://legis.state.nm.us/lcs/legislatorsearch.asp.

We would like to thank New Mexico Voices for Children for their hard work on this issue, and for providing the following summary of the bill.

House Bill 451
Tax Increment Development Act Reforms
Sections 5-15-1 through 5-15-28 NMSA 1978

1. Reduce the risk to the state General Fund
a. Reduce the diversion of state gross receipts tax (GRT) from a maximum of 75 percent to 50 percent
b. For TIDDs in greenfields – which pose most risk because these are large, undeveloped areas of the state where growth
is going to happen – limit the state gross receipts tax increment to 20 percent unless the TIDD meets certain public
policy goals. These goals are workforce housing, transit-oriented development and adequate funding for public
schools. Each of these goals is worth an increment of 10 percent, for a maximum of 50 percent.
c. For purposes of the bill, a greenfield TIDD is defined as a tax increment development district 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 TIDD plan primarily relies on the development of new residential and commercial
structures rather than the redevelopment of existing residential and commercial structures.

2. Clarify that any excess GRT revenue received by the TIDD above the level required for the authorized bonds and bond
reserve fund should be returned to the taxing authority.
a. For example, one TIDD applicant estimates that TIDD revenues would be almost $1B but infrastructure costs would be
slightly over $600M. Revenues not required to support the bonds for the $600M in infrastructure costs should be
returned to the state and local governments.

3. Require transparency
a. Not only are TIDDs receiving diverted gross receipts taxes and property taxes but, since they are also supposed to be
economic development projects, entities within TIDDs have received and will receive other incentives and funding from
state and local government. For example, recently announced companies located to Mesa del Sol: solar firm - $130M in
incentives; investment firm - $47M in incentives.

b. TIDD Boards should be required to report on the following:
i. Revenues and expenses and total debt outstanding.
ii. Working with the appropriate state and local government agencies, report annually on the total value of the state and
local economic incentives provided to entities within the TIDD. These incentives include, but are not limited to,
industrial revenue bonds, all relevant tax exemptions and credits, job training incentives, and capital outlay
appropriations.

4. Require state oversight
a. Under current law, the only role the state has is to approve the state GRT increment for the TIDD. Once that is
approved, the state has no role for the entire 25-year length of the bond.
b. The state GRT makes up the majority of funding for most of the TIDDs approved or under consideration so far.
Therefore, the state needs an ongoing say in how these projects are managed.
c. The Secretary of the Department of Finance and Administration or designee would be a member of every TIDD Board.
d. The Board of Finance would be required to set the total amount of the state GRT increment so that the GRT revenues
generated within the TIDD and retained by the state are sufficient to fully cover the estimated cost of state services and
programs within the TIDD.

5. Create a Task Force to study the ongoing implementation of TIDDs
a. The Task Force would study:
b. Implementation of the Tax Increment Development Act (TIDA) so far.
c. The long-term fiscal impact on the state General Fund and on municipal and county budgets.
d. Amount of future state and local gross receipts taxes and property taxes committed to existing TIDDs.
e. The experience of other states with Tax Increment Financing, especially the use of state-level taxes in TIDDs.
f. The consequences of removing public infrastructure construction projects within TIDDs from the state and local
procurement codes.
g. Other economic development incentives provided in current TIDDs.
h. Possible consequences if TIDD revenues are not enough to cover bond repayments.
i. Procedures for expanding TIDDs and changing TIDD board membership.
j. Other options available to finance public infrastructure for new development.

Task Force members include: Department of Finance and Administration; Taxation and Revenue Department; Legislative Finance Committee; NM Finance Authority; NM Association of Counties; NM Municipal League; AFSCME; NM Chapter of the American Planning Association; two representatives of neighborhood associations either within or adjacent to an existing or proposed TIDD; two at-large public members (the last two groups would have one member each appointed by the Governor and the Legislature).