SENATE MEMORIAL 80

54th legislature - STATE OF NEW MEXICO - first session, 2019

INTRODUCED BY

Pete Campos

A MEMORIAL

ENCOURAGING SUPPORT OF FRONTIER COMMUNITY INVESTMENT INCOME TAX CREDITS.

     WHEREAS, frontier communities are remote and sparsely populated rural areas, which are isolated from health care, schools and other needed services; and

     WHEREAS, often, basic services such as a grocery store, pharmacy or hardware store are not available in frontier communities; and

     WHEREAS, rural, economically distressed New Mexico municipalities and communities have few options and financial incentives for residents to invest in their communities and to receive benefits for doing so; and

     WHEREAS, a frontier community investment income tax credit would provide an incentive for local investment; and

     WHEREAS, using the criteria of a population of less than seven thousand five hundred residents with less than two hundred fifty million dollars ($250,000,000) in gross receipts income to define a frontier community, there are ten counties in New Mexico that would qualify for a frontier community investment income tax credit; and

     WHEREAS, the purposes of a frontier community investment income tax credit are to encourage residents of frontier communities to invest in their communities and to create new jobs and provide needed services for frontier communities; and

     WHEREAS, frontier community investment income tax credits:

          A. encourage local, private investment in the community;

          B. focus on services and communities overlooked by chain stores;

          C. introduce economic development in rural communities;

          D. are similar to New Mexico's angel investment credit for investing in early-stage companies in the southwest, but with a specific focus on rural development;

          E. provide benefits proportionally greater than equivalent investments in larger counties;

          F. allow an income tax credit in an amount up to twenty-five percent of up to one hundred thousand dollars ($100,000) of an investment by investors in rural enterprises;

          G. encourage employment by requiring businesses to create the equivalent of three full-time jobs within two years of start-up; and

          H. focus on investor-financed business entities, not individual proprietors; and

     WHEREAS, investments in small communities are generally considered to be a riskier proposition because of the lower income of residents and a limited customer base; and

     WHEREAS, a frontier community investment income tax credit would provide incentive for local investment by reducing some of the cost and risk of investing in rural, underserved communities;

     NOW, THEREFORE, BE IT RESOLVED BY THE SENATE OF THE STATE OF NEW MEXICO that the potential benefits of frontier community investment income tax credits be reviewed and considered; and

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

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