46th legislature - STATE OF NEW MEXICO - first session, 2003

RELATING TO ECONOMIC DEVELOPMENT; ENACTING THE ECONOMIC DEVELOPMENT FISCAL ACCOUNTABILITY ACT; PROVIDING FOR REPORTING AND ANALYSIS OF STATE AND LOCAL ECONOMIC DEVELOPMENT INCENTIVES AND TAX EXPENDITURES; REQUIRING A BIENNIAL REPORT.

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

Section 1. SHORT TITLE.--This act may be cited as the "Economic Development Fiscal Accountability Act".

Section 2. FINDINGS AND INTENT.--

A. The legislature finds that, although the state and its local governments have granted numerous economic development incentives, wage levels and health care coverage of working families in New Mexico remain lower than national averages. The legislature further finds that when workers receive low wages and poor benefits, such jobs often impose hidden taxpayer costs upon its residents, in the form of medicaid, food stamps, low-income tax rebates and other forms of public assistance to the working poor and their families.

B. The legislature further finds that it is difficult to determine whether New Mexico's extensive economic development efforts have been successful, because of the lack of readily accessible information regarding expenditures and outcomes.

C. Therefore, it is the intent of the legislature to improve the effectiveness of economic development and to achieve the goal of raising living standards for working families by collecting, analyzing and making public information regarding all state and local economic development expenditures and incentives. With this information, the legislature will be able to assess the effectiveness and the outcomes of economic development expenditures and incentives and to use that information to assure a healthier economy for businesses and working families in New Mexico.

Section 3. DEFINITIONS.--As used in the Economic Development Fiscal Accountability Act:

A. "department" means the economic development department;

B. "economic development" means activities or efforts directed toward attracting new businesses and industries into the state, expanding existing businesses and industries, increasing the number of jobs or attracting certain types of employment or enhancing the state's ability to compete with other states in attracting and retaining businesses and industries in the state;

C. "economic development incentive" means any of the following provided or intended for economic development:

(1) an expenditure of or authority to expend public funds with a value of at least five thousand dollars ($5,000) for the benefit of one or more recipients, including state or local bonds, grants, loans, loan guarantees, participation interests in loans, guaranteed debt investment in projects, tax increment financing and other enterprise zone property and infrastructure benefits and direct or indirect assistance for economic development projects pursuant to the Local Economic Development Act; or

(2) a tax expenditure;

D. "recipient" means an individual, corporation, business entity or other person or an industrial or commercial facility, project or enterprise that is eligible to receive or has received money or other consideration, benefit or any thing of value from an economic development incentive; and

E. "tax expenditure" means a tax deduction, exemption, rebate, credit or exclusion or preferential tax rate or other special tax treatment that:

(1) decreases public revenues;

(2) applies to a narrow class of taxpaying entities that would otherwise be subject to a general tax provision and for which the special tax provision is a clear exception; and

(3) is intended to stimulate economic development in the state or any of its local communities.

Section 4. BIENNIAL UNIFIED ECONOMIC DEVELOPMENT EXPENDITURE REPORT.--

A. The department shall submit a biennial unified economic development expenditure report on or before October 1, 2004 and on or before October 1 every two years thereafter. The report shall be presented to the governor, the legislative finance committee, the revenue stabilization and tax policy committee and any other appropriate legislative committee charged with study of economic development matters.

B. The biennial unified economic development expenditure report shall present information for the two-year period on every state and local government economic development incentive, the recipients of the incentive and the intended objectives and outcomes of the incentive. The report may also include recommendations for legislation changing, adding or repealing economic development incentives.

C. The department, working with the taxation and revenue department, the department of finance and administration, the state investment officer and representatives of municipalities and counties, shall compile a list and description of every economic development incentive available in New Mexico and each incentive's intended objectives. This list may be compiled and made available as a publication separate from the biennial report.

D. The report shall include the following information for each economic development incentive for the two calendar years immediately prior to the date of the report:

(1) the total amount of expenditures or public revenues foregone or the current value or other approximate value of each economic development incentive received by recipients in each calendar year;

(2) the aggregate number of recipients benefiting from each economic development incentive, and, where practicable and permitted by law, the names and amounts or values of the incentive to each recipient;

(3) the location of recipients and incentive amounts and values aggregated by municipality and county; and

(4) the number of new jobs created or new employees hired by each recipient as a result of the economic development incentive, and for each new job or employee, the employee's wage or salary, gender and state of residence immediately prior to employment; and

(5) information on health care coverage or health insurance provided by each recipient to its employees.

E. In compiling the report, the department shall present and organize the information on the various economic development incentives and recipients in such a way as to provide a coherent and complete picture of the state's economic development incentive efforts. Every effort shall also be made to develop methods to analyze, evaluate and measure the effectiveness of the economic development incentives in meeting their stated objectives and intended outcomes.

Section 5. INFORMATION REPORTS--RECIPIENTS.--The department may require recipients of economic development incentives to file annual reports providing at least the minimum information required by the Economic Development Fiscal Accountability Act. Every recipient of an economic development incentive shall cooperate with and provide information and access to records as requested by the department or other state agency or local government administering or providing an economic development incentive subject to the reporting requirements of the Economic Development Fiscal Accountability Act.