HOUSE JOINT MEMORIAL 11

47th legislature - STATE OF NEW MEXICO - first session, 2005

INTRODUCED BY

Mimi Stewart

A JOINT MEMORIAL

REQUESTING THAT THE TAXATION AND REVENUE AND ECONOMIC DEVELOPMENT DEPARTMENTS CONVENE A TASK FORCE TO STUDY THE EFFECTIVENESS OF THE STATE'S ECONOMIC DEVELOPMENT INCENTIVES IN ACHIEVING THEIR OBJECTIVES AND OUTCOMES.

     WHEREAS, the legislature finds that it is difficult to evaluate whether the state's forty-seven state-enacted economic development incentives have been successful due to the lack of readily accessible information regarding public investments, expenditures and outcomes; and

     WHEREAS, other states have economic development budgets that include a reporting requirement on what the economic development incentives have accomplished, and New Mexico should also develop reliable methods of measuring the effectiveness of its incentives; and

     WHEREAS, it is the intent of the legislature to stimulate economic development and raise the standard of living of New Mexico families by reporting and analyzing state and local economic development expenditures and incentives;

     NOW, THEREFORE, BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO that the taxation and revenue department in collaboration with the economic development department be requested to convene a task force to study methods of analyzing, evaluating, measuring and estimating the effectiveness of economic development incentives in meeting their stated objectives and intended outcomes; and

     BE IT FURTHER RESOLVED that the task force include representatives of the taxation and revenue department, the economic development department, the department of finance and administration, the labor department, the investment office, the legislative finance committee, the New Mexico municipal league, the New Mexico association of counties and a private sector economic development expert; and

     BE IT FURTHER RESOLVED that the task force produce a report that includes a survey of similar programs in other states and detailed recommendations as to:

          A. the definition of the term "tax incentive" and the shared characteristics of tax policies and programs subject to reporting requirements;

          B. the design of reporting mechanisms to collect information and data from businesses that take advantage of state or local tax incentives;

          C. information and data that should be obtained from businesses, using the reporting mechanisms, including industry type; capital investment; number of full-time and part-time jobs created; average wage of jobs created; the availability and cost of health insurance, paid leave and retirement benefits to employees in the newly created jobs; and the participation rate in benefit programs by employees in the newly created jobs;

          D. methods through which information and data should be collected;

          E. methods for protecting the confidentiality and proprietary nature of data and information collected;

          F. methods for validating data and penalties for misreporting or failure to report required information and data;

          G. methods for analyzing the information and data, including models and economic multipliers, to estimate economic impacts of economic development policies and incentives;

          H. timing, frequency and dissemination of reports developed using collected information and data;

          I. methods for sharing information and data collection, analysis and dissemination responsibilities among state agencies; and

          J. design of legislation and estimated appropriation required to fully implement the recommendations of the task force; and

     BE IT FURTHER RESOLVED that the task force report its findings to the governor, legislative finance committee, revenue stabilization and tax policy committee and any additional appropriate legislative committee charged with studying economic development before November 30, 2005; and

     BE IT FURTHER RESOLVED that copies of this memorial be transmitted to the secretaries of economic development and taxation and revenue.

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