PAYMENT OF CERTAIN IRB SPECIAL ASSESSMENTS

HB 165
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AN ACT
RELATING TO LOCAL GOVERNMENT; CLARIFYING THAT SPECIAL
ASSESSMENTS UNDER THE IMPROVEMENT SPECIAL ASSESSMENT ACT
SHALL BE PAID BY PROPERTY OWNERS OR LESSEES WHO HOLD
INDUSTRIAL REVENUE BOND LEASES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 4-55D-2 NMSA 1978 (being Laws 2023,
Chapter 150, Section 2) is amended to read:
"4-55D-2. DEFINITIONS.--As used in the Improvement
Special Assessment Act:
A. "capital provider" means a private entity or
its designee, successor or assigns that finances or
refinances an eligible improvement pursuant to the
Improvement Special Assessment Act;
B. "county" means a county, including an H class
county;
C. "county ordinance" means an ordinance adopted
by a county pursuant to the Improvement Special Assessment
Act to establish a program within a designated region;
D. "department" means the economic development
department;
E. "eligible improvement" means a permanently
affixed energy efficiency improvement, renewable energy
improvement, water conservation improvement or resiliency
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improvement installed on eligible property as part of the
construction or renovation of the property;
F. "eligible property" means:
(1) any privately owned commercial,
industrial, agricultural or multifamily residential real
property with five or more dwelling units, including real
property owned by an entity formally recognized as tax exempt
pursuant to Internal Revenue Code of 1986, as amended; or
(2) property interests of a lessee under an
industrial revenue bond lease for commercial, industrial,
agricultural or multifamily residential real property with
five or more dwelling units;
G. "energy efficiency improvement" means measures,
equipment or devices that result in a decrease in consumption
of or demand for electricity or natural gas;
H. "industrial revenue bond lease" means the lease
of property by a county or municipality to a person in
connection with a project under the authority of the
Industrial Revenue Bond Act or the County Industrial Revenue
Bond Act;
I. "lessee" means a lessee under an industrial
revenue bond lease;
J. "local government" means a municipality, county
or other general function governmental unit established by
state law;
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K. "municipal" or "municipality" means any
incorporated city, town or village, whether incorporated
under general act, special act or special charter,
incorporated counties and H class counties;
L. "program" means a special assessment program
that utilizes and conforms to the program guidebook and
uniform special assessment documents established by the
department pursuant to the Improvement Special Assessment
Act;
M. "program administrator" means a person
designated by a county to administer a program; "program
administrator" may be the department, the county or a third
party; provided that the administration procedures used
conform to the requirements of the Improvement Special
Assessment Act;
N. "program guidebook" means a comprehensive
document created by the department pursuant to the
Improvement Special Assessment Act, including uniform
assessment documents, appropriate guidelines, specifications,
approval criteria and other standard forms consistent with
the administration of a program that are not detailed in the
Improvement Special Assessment Act;
O. "project application" means an application
submitted to a program administrator to demonstrate that a
proposed project qualifies for special assessment financing
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pursuant to a program;
P. "region" means a geographical area as
designated by a county pursuant to the Improvement Special
Assessment Act;
Q. "renewable energy improvement" means an energy
system that generates energy by use of low- or zero-emissions
generation technology with substantial long-term production,
including solar, wind and geothermal resources, fuel cell
equipment using an electrochemical process to generate
electricity and heat or biomass resources;
R. "resiliency improvement" means improvements
that increase the resilience of a property, including air
quality, flood mitigation, storm water management, energy
storage and microgrids, alternative vehicle charging
infrastructure, fire or wind resistance or inundation
adaptation;
S. "special assessment" means a voluntary
assessment imposed on a property pursuant to the Improvement
Special Assessment Act for the total amount of special
assessment financing together with interest, penalties, fees
and charges related thereto;
T. "special assessment agreement" means a
voluntary agreement of a property owner to allow a county to
place an assessment on the owner's property to repay special
assessment financing pursuant to the Improvement Special
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Assessment Act;
U. "special assessment assignable certificate"
means a document assigning a special assessment lien from the
county to a capital provider in an amount not to exceed the
amount of the special assessment financing for the term of
the special assessment lien;
V. "special assessment financing" means the total
amount of financing provided by a capital provider pursuant
to a special assessment financing agreement, including
accrual of interest and penalties, charges, fees and costs of
enforcement of a special assessment lien;
W. "special assessment financing agreement" means
a contract pursuant to which a property owner agrees to repay
a capital provider for special assessment financing and to
the terms of the special assessment financing, including the
treatment of prepayment and partial payment of a special
assessment, servicing arrangements, the payment of any
finance charges and fees and accrual of interest and
penalties;
X. "special assessment lien" means a lien recorded
in all counties in which the eligible property is located to
secure the special assessment, which assessment remains on
the property until paid in full;
Y. "uniform assessment documents" means the forms
of county ordinance, special assessment agreement, special
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assessment lien, special assessment assignable certificate
and other model documents prepared by the department pursuant
to the Improvement Special Assessment Act for use in the
program; provided, however, the department shall not mandate
a form of special financing agreement that shall be supplied
by a capital provider; and
Z. "water conservation improvement" means
measures, equipment or devices that decrease the consumption
of or demand for water, address safe drinking water or
eliminate lead from water used for drinking or cooking."
SECTION 2. Section 4-55D-5 NMSA 1978 (being Laws 2023,
Chapter 150, Section 5) is amended to read:
"4-55D-5. IMPOSITION OF SPECIAL ASSESSMENT--AMOUNT--
COLLECTION--SPECIAL ASSESSMENT LIEN CREATED.--
A. Upon entering into a special assessment
agreement, the county shall record a special assessment lien
on the subject property in the real property records of the
county in which the property is located.
B. The recording of the lien pursuant to
Subsection A of this section shall include:
(1) the legal description of the property;
(2) the county assessor's parcel number of
the property;
(3) the grantor's name, which shall be the
same as the property owner on the special assessment
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agreement;
(4) the grantee's name, which shall be the
county in which the property is located;
(5) the date on which the special assessment
lien was created;
(6) the principal amount of the special
assessment lien;
(7) the terms and length of the special
assessment lien; and
(8) a copy of the special assessment
agreement.
C. A special assessment lien shall be effective
during the period in which the special assessment is imposed
and shall have priority superior to all liens, claims and
titles except a lien for general ad valorem property taxes or
an improvement district lien that is coequal to property
taxes.
D. A special assessment lien runs with the land,
and that portion of the special assessment lien that has not
yet become due is not accelerated or eliminated by
foreclosure of the special assessment lien or any lien for
taxes or assessments imposed by the state, a local government
or taxing district against the property on which the special
assessment lien is imposed.
E. A special assessment shall be paid by a
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property owner unless the property is under an industrial
revenue bond lease, in which case the lessee shall pay the
special assessment, but under no circumstance shall a local
government pay a special assessment.
F. Upon entering into a special assessment
agreement, the county shall execute and record a special
assessment assignable certificate from the county to the
appropriate capital provider. The special assessment
assignable certificate shall convey the special assessment
lien including all of the characteristics described in
Subsection B of this section. The holder of the special
assessment assignable certificate shall be solely responsible
for the billing and collection of the related special
assessment and for the enforcement of the special assessment
lien.
G. When the underlying special assessment
financing has been satisfied, the special assessment shall be
removed from the property and the county shall record a
release of the special assessment lien."
SECTION 3. Section 4-55D-7 NMSA 1978 (being Laws 2023,
Chapter 150, Section 7) is amended to read:
"4-55D-7. SPECIAL ASSESSMENT FINANCING.--
A. Special assessment financing shall be provided
by capital providers and disbursed directly by capital
providers to fund eligible improvements subject to a special
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assessment financing agreement.
B. A county or municipality shall not be liable in
any way for the debt of the property owner or the debt of the
special assessment financing, shall not be a third-party
obligor and shall not pledge or lend its credit to the
property owner, the capital provider or the special
assessment financing."
SECTION 4. Section 4-55D-10 NMSA 1978 (being Laws 2023,
Chapter 150, Section 10) is amended to read:
"4-55D-10. IMMUNITY.--Nothing in the Improvement
Special Assessment Act shall be interpreted to pledge, offer
or encumber the full faith and credit of a county or
municipality."