Forming Tax Increment Districts
Tax Increment Development Districts (TIDD) are mechanisms to support economic development and job creation by providing gross receipts tax financing and property tax financing for public infrastructure.
The steps and deadlines to create a TIDD are:
1. Notice of Public Hearing
The governing body of the municipality or county proposing to create a TIDD must hold a public hearing on the proposed TIDD formation. It sends written notice to the Department about the public hearing on the proposed formation of the TIDD no later than 10 days before the hearing.
The notice, according to Section 5-15-6 NMSA 1978, must contain the following:
- Date, time and place of the hearing;
- Information about alternative methods to submit objects or comments;
- Statement of the intention to form a TIDD;
- Map showing the boundaries of the proposed district;
- Statement that the TIDD plan is on file with the clerk of the governing body and may be reviewed upon request;
- Summary of the resolution as set forth in Section 5-15-6(D) NMSA 1978, and
- Copy of the resolution.
2. Notification Deadline for Adopting a Resolution to Form a District
The governing body that adopts a resolution to form a TIDD notifies the Department within 10 days after adopting the resolution to form a district Section 5-15 4 NMSA 1978 and sends a copy of the resolution to the Department.
3. Notification to Department of Forming a District
Although no statutory deadline is involved, the governing body must notify the Department as soon as the formation process is complete. It also must send a copy of the resolution ordering the formation of the district.
4. Notification of Approval of Tax Increment Development Plan
The governing body must “timely notify” the Department when an approved tax increment development plan provides for the allocation of gross receipts tax increments.
5. Notification Deadlines for Approval of Dedication or Increase to Dedication
The State Board of Finance and the local government taxing entity must notify the Department at least 120 days before the effective date of dedication or increase of dedication. The deadline is August 31 for January 1, and February 28 for July 1 (Section 5-15-27 NMSA 1978).
6. Notification of Bond Issues
Although not mandated by statute, the TIDD should send the Department a copy of the governing body’s resolution to authorize bond issues against local gross receipts tax increments once the district board has approved the resolution. It should also send a copy of the Legislature’s approval of bond issues against a state gross receipts tax increment.
7. When Outstanding Bonds Have Been Paid Off
Section 5-15-15 NMSA 1978 requires the governing body to “timely notify” the Department when any outstanding bonds of the district have been paid off.
8. District Contact and Distribution Information
For the Department to distribute increment revenue to a TIDD, two pieces of information are required from the TIDD:
- Name, address and telephone number of a TIDD contact person who can address increment revenue distribution issues, and
- The TIDD’s Federal Identification Number (FEIN).
This information should reach the Department by November 1 for a January 1 effective date, and by May 1 for a July 1 effective date.