LOCAL ECONOMIC DEVELOPMENT ACT PLANNING

The Local Economic Development Act (the "Act") was passed to implement the 1994 constitutional amendment to Article 9, Section 14 of the constitution of the state of New Mexico. The Act allows municipalities and counties to use public funds and public resources to promote economic development under guidelines designed to protect public resources. This modifies the so-called "Anti-Donation Clause," which prohibited local government from providing funds or the equivalent to private enterprise, even when the result of that investment would be jobs and tax revenue.

Under the Act, eligible entities use public funds in an amount not to exceed five percent of the annual general fund expenditures of the local government in that fiscal year. This limit does not extend to the value of any land or building contributed to any project, or to revenue generated through the imposition of the municipal infrastructure gross receipts tax pursuant to the Municipal Local Option Gross Receipts Taxes Act [Chapter 7, Article 19D NMSA 1978] for furthering or implementing economic development plans and projects as defined in the Local Economic Development Act; provided that no more than the greater of fifty thousand dollars ($50,000) or ten percent of the revenue collected shall be used for promotion and administration of or professional services contracts related to the implementation of any such economic development plan adopted by the governing body.

Communities are required to have a valid economic development plan in place that meets the specifications of the Act. Presently, the City of Santa Fe, Santa Fe County, Española, and Rio Arriba County have adopted ordinances and plans. NCNMEDD encourages communities in the District to develop and adopt a Local Economic Development Act Plan and Ordinance. Check this website for the text of the Act. For more information, contact Arturo Archuleta at 827-7313 or rlf@nm.net.