HOUSE BILL 135

57th legislature - STATE OF NEW MEXICO - first session, 2025

INTRODUCED BY

Kristina Ortez

 

 

 

 

 

AN ACT

RELATING TO ECONOMIC DEVELOPMENT; AMENDING THE LOCAL ECONOMIC DEVELOPMENT ACT; REQUIRING A QUALIFYING ENTITY TO CONDUCT A HOUSING STUDY PRIOR TO SUBMITTING AN APPLICATION FOR PUBLIC SUPPORT; ADDING DEFINITIONS; AMENDING APPLICATION AND EVALUATION REQUIREMENTS.

 

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

     SECTION 1. Section 5-10-3 NMSA 1978 (being Laws 1993, Chapter 297, Section 3, as amended by Laws 2021, Chapter 3, Section 1 and by Laws 2021, Chapter 135, Section 1) is amended to read:

     "5-10-3. DEFINITIONS.--As used in the Local Economic Development Act:

          A. "arts and cultural district" means a developed district of public and private uses that is created pursuant to the Arts and Cultural District Act;

          B. "broadband telecommunications network facilities" means the electronics, equipment, transmission facilities, fiber-optic cables and any other item directly related to a system capable of transmission of internet protocol or other formatted data at current federal communications commission baseline speed standard, all of which will be owned and used by a provider of internet access services;

          C. "cultural facility" means a facility that is owned by the state, a county, a municipality or a qualifying entity that serves the public through preserving, educating and promoting the arts and culture of a particular locale, including theaters, museums, libraries, galleries, cultural compounds, educational organizations, performing arts venues and organizations, fine arts organizations, studios and media laboratories and live-work housing facilities;

          D. "department" means the economic development department;

          E. "economic development project" or "project" means the project of a qualifying entity for which public support may be provided pursuant to the Local Economic Development Act;

          F. "governing body" means the city council, city commission or board of trustees of a municipality or the board of county commissioners of a county;

          G. "housing study" means a multivariable estimate of housing demand created by new employment, including new full-time economic base jobs, expected to occur as a result of implementation of an economic development project;

          [G.] H. "local government" means a municipality or county;

          [H.] I. "municipality" means an incorporated city, town or village;

          [I.] J. "new full-time economic base job" means a job:

                (1) that is primarily performed in New Mexico;

                (2) that is held by an employee who is hired to work an average of at least thirty-two hours per week for at least forty-eight weeks per year;

                (3) that is:

                     (a) involved, directly or in a supervisory capacity, with the production of: 1) a service; provided that the majority of the revenue generated from the service is from sources outside the state; or 2) tangible or intangible personal property for sale; or

                     (b) held by an employee who is employed at a regional, national or international headquarters operation or at an operation that primarily provides services for other operations of the qualifying entity that are located outside the state; and

                (4) that is not directly involved with natural resources extraction or processing, on-site services where the customer is present for the delivery of the service, retail, construction or agriculture except for value-added processing performed on agricultural products that would then be sold for wholesale or retail consumption;

          [J.] K. "person" means an individual, corporation, association, partnership or other legal entity;

          [K.] L. "public support" means the provision of assistance by the state to a local or regional government or the provision of direct or indirect assistance to a qualifying entity by a local or regional government for an economic development project. "Public support":

                (1) includes the provision of:

                     (a) land, buildings or other infrastructure, by purchase, lease, grant, construction, reconstruction, improvement or other acquisition or conveyance;

                     (b) the placement of new broadband telecommunications network facilities; provided that the facilities shall not serve a public facility or location that already meets federal communications commission baseline speed standards;

                     (c) rights-of-way infrastructure, including trenching and conduit, for the placement of new broadband telecommunications network facilities;

                     (d) public works improvements essential to the location or expansion of a qualifying entity;

                     (e) payments for professional services contracts necessary for local or regional governments to implement a plan or provide public support for a project;

                     (f) direct loans or grants for land, buildings or infrastructure;

                     (g) technical assistance to cultural facilities;

                     (h) loan guarantees securing the cost of land, buildings or infrastructure in an amount not to exceed the revenue that may be derived from an increment of the: 1) municipal gross receipts tax imposed at a rate not to exceed one-fourth percent and dedicated by the ordinance imposing the increment for projects; or 2) county gross receipts tax imposed at a rate not to exceed one-eighth percent and dedicated by the ordinance imposing the increment for projects;

                     (i) grants for public works infrastructure improvements essential to the location or expansion of a qualifying entity and grants or subsidies to cultural facilities;

                     (j) land for a publicly held industrial park or a publicly owned cultural facility, by purchase; and

                     (k) the construction of a building for use by a qualifying entity; but

                (2) does not include the purchase, lease, grant or other acquisition or conveyance of water rights;

          [L.] M. "qualifying entity" means a corporation, limited liability company, partnership, joint venture, syndicate, association or other person that is one or a combination of two or more of the following:

                (1) an industry for the manufacturing, processing or assembling of agricultural or manufactured products;

                (2) a commercial enterprise for storing, warehousing, distributing or selling products of agriculture, mining or industry, but, other than as provided in Paragraph (5), (6) or (9) of this subsection, not including any enterprise for sale of goods or commodities at retail or for distribution to the public of electricity, gas, water or telephone or other services commonly classified as public utilities;

                (3) a business, including a restaurant or lodging establishment, in which all or part of the activities of the business involves the supplying of services to the general public or to governmental agencies or to a specific industry or customer, but, other than as provided in Paragraph (5) or (9) of this subsection, not including businesses primarily engaged in the sale of goods or commodities at retail;

                (4) an Indian nation, tribe or pueblo or a federally chartered tribal corporation;

                (5) a telecommunications sales enterprise that makes the majority of its sales to persons outside New Mexico;

                (6) a facility for the direct sales by growers of agricultural products, commonly known as farmers' markets;

                (7) a business that is the developer of a metropolitan redevelopment project;

                (8) a cultural facility; and

                (9) a retail business;

          [M.] N. "regional government" means any combination of municipalities and counties that enter into a joint powers agreement to provide public support for economic development projects pursuant to a plan adopted by all parties to the joint powers agreement; and

          [N.] O. "retail business" means a business that is primarily engaged in the sale of goods or commodities at retail and that is located:

                (1) in a municipality with a population, according to the most recent federal decennial census, of:

                     (a) fifteen thousand or less; or

                     (b) more than fifteen thousand if the economic development project is not funded or financed with state government revenues; or

                (2) in an unincorporated area of a county."

     SECTION 2. Section 5-10-6 NMSA 1978 (being Laws 1993, Chapter 297, Section 6, as amended) is amended to read:

     "5-10-6. ECONOMIC DEVELOPMENT PLAN--CONTENTS--PUBLICATION.--

          A. Every local or regional government seeking to pursue economic development projects shall adopt an economic development plan or a comprehensive plan that includes an economic development component, and an economic development plan or comprehensive plan may include an analysis of the role of arts and cultural activities in economic development. The plan may be specific to a single economic development goal or strategy or may include several goals or strategies, including any goals or strategies relating to economic development through arts and cultural activities. Any plan or plan amendment shall be adopted by ordinance of the governing body of the local government or each local government of a regional government proposing the plan or plan amendment.

          B. The economic development plan or ordinance adopting the plan shall include a requirement that a qualifying entity shall conduct a housing study of the counties and municipalities to be affected by the implementation of the proposed economic development project prior to submitting an application for public support of the qualifying entity's economic development project; provided that the qualifying entity conducting the housing study shall not solely rely on a cost burden analysis.

          [B.] C. The economic development plan or the ordinance adopting the plan may:

                (1) describe the local or regional government's economic development and community goals, including any economic development goals with an arts and cultural component, and assign priority to and strategies for achieving those goals;

                (2) describe the types of qualifying entities and economic activities that will qualify for public support;

                (3) describe the criteria to be used to determine eligibility for public support and a qualifying entity to participate in an economic development project;

                (4) describe the manner in which a qualifying entity may submit an application for public support pursuant to Section 5-10-8 NMSA 1978, including the type of information required from the qualifying entity sufficient to ensure its solvency and ability to perform its contractual obligations, its commitment to remain in the community and its commitment to the stated economic development goals of the local or regional government;

                (5) describe the process the local or regional government will use to verify the information submitted on an application for public support pursuant to Section 5-10-8 NMSA 1978;

                (6) if an economic development project is determined to be unsuccessful or if a qualifying entity seeks to leave the area, describe the methods the local or regional government will use to terminate the local or regional government's public support and recoup its investment;

                (7) identify revenue sources, including those of the local or regional government, that will be used to provide public support for economic development projects;

                (8) identify other resources the local or regional government is prepared to offer qualifying entities, including specific land or buildings it is willing to lease, sell or grant a qualifying entity; community infrastructure it is willing to build, extend or expand, including roads, water, sewers or other utilities; and professional services contracts by local or regional governments necessary to provide these resources;

                (9) detail the minimum benefit the local or regional government requires from a qualifying entity, including the number and types of jobs to be created; the proposed payroll; repayment of loans, if any; purchase by the qualifying entity of local or regional government-provided land, buildings or infrastructure; the public to private investment ratio; and direct local tax base expansion;

                (10) describe the safeguards of public resources that will be ensured, including specific ways the local or regional government can recover any costs, land, buildings or other thing of value if a qualifying entity ceases operation, relocates or otherwise defaults or reneges on its contractual or implied obligations to the local or regional government; and

                (11) if a regional government, describe the joint powers agreement, including whether it can be terminated and, if so, how the contractual or other obligations, risks and any property will be assigned or divided among the local governments who are party to the agreement.

          [C.] D. The economic development plan shall be printed and made available to the residents within the local or regional government area."

     SECTION 3. Section 5-10-8 NMSA 1978 (being Laws 1993, Chapter 297, Section 8, as amended) is amended to read:

     "5-10-8. APPLICATIONS FOR PUBLIC SUPPORT.--

          A. After the adoption of an economic development plan by a local or regional government, a qualifying entity shall submit to the local or regional government an application for public support of a qualifying entity's economic development project.

          B. A qualifying entity shall conduct a housing study of the counties and municipalities to be affected by the implementation of the proposed economic development project prior to submitting an application for public support of the qualifying entity's economic development project; provided that the qualifying entity conducting the housing study shall not solely rely on a cost burden analysis.

          [B.] C. The application shall:

                (1) be on a form and require such information as the local or regional government deems necessary; and

                (2) include the findings of the housing study conducted pursuant to Subsection B of this section."

     SECTION 4. Section 5-10-9 NMSA 1978 (being Laws 1993, Chapter 297, Section 9, as amended) is amended to read:

     "5-10-9. PROJECT EVALUATION--DEPARTMENT.--

          A. The local or regional government shall review each application for public support submitted pursuant to Section 5-10-8 NMSA 1978, and any public support shall be approved by ordinance.

          B. The local or regional government's evaluation of an application shall be based on the provisions of the economic development plan, the financial and management stability of the qualifying entity, the demonstrated commitment of the qualifying entity to the community, the findings of the housing study, a cost-benefit analysis of the project and any other information the local or regional government believes is necessary for a full review of the economic development project application.

          C. The local or regional government may negotiate with a qualifying entity on the type or amount of public support to be provided or on the scope of the economic development project."

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