Local Economic Development Act (LEDA)

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1 Local Economic Development Act (LEDA) Juan Torres Finance Development Director New Mexico Economic Development Department New Mexico Economic Development Department Office of Business Advocacy Film Office Border Authority Office of International Trade Office of Science and Technology 1

2 New Mexico Economic Development Department, ED Division Job Training Incentive Program ISO 9000 Business Retention and Expansion Program Finance Development Programs EDD LEDA Goals Job creation and increased wages Community impact and support Rural and underserved areas of our state Capital investment and leverage Environmentally sustainable outcomes Financial soundness and readiness to proceed 2

3 New Mexico Constitution Anti-Donation Clause: Does not allow the use of public funds for gain by Private Entities Was amended to allow the State Economic Development Department to invest directly in Economic Development Projects that provide for a significant public benefit Local Economic Development Act (LEDA) allows the state to provide funding to a community who has passed LEDA in support of an Economic Development project Qualified Entity Manufacturer Economic Base Service Industry Cultural Facilities Other 3

4 What is LEDA Capital Outlay funding? Funds are Appropriated by the New Mexico Legislature and signed into law by the Governor for the purpose of assisting Economic Development Projects. Funds are made available to a community for use by a Qualifying Entity (QE) as defined in statue, for usein an Economic Development Project that has a significant public benefit to the community Request for funding o Communities that have passed their Local Economic Development Act and are able to act as a fiscal agent on behalf of the project may formally request funding for LEDA CO Economic Development Projects by outlining the project scope of work and significant public benefit in a letter to the Secretary of Economic Development. o Fund use is limited to the areas of Land, Building and Infrastructure. 4

5 Funding Decisions NMEDD Secretary evaluates project funding requests on a number of criteria including: How the Project aligns with the community passed LEDA Total community benefit, including permanent high paying jobs in targeted industries, local economic conditions, overall community strategic goals. Established best practices guidelines. Financial viability of the project, readiness to proceed and financial need. Funding Decisions Additional consideration will be given to projects that: Are located in Rural and Frontier communities Communities that are in Economically Distressed areas Communities that have experienced a significant natural or manmade disaster Communities who have lost a major industry or employer. Final funding decisions will be made by the Secretary in consultation with the Governor. 5

6 Process Once a project has been selected for funding, a notice of Funding Allocation (NOFA) is sent to the community outlining the process. At this point the Qualifying Entity is required to submit a LEDA CO Application which includes a number of supporting documents, such as: financial statements, corporate information, information authorization release affidavit, proof of community passed LEDA Ordinance and community compliance with Executive Order on grant audit requirements. Funding Timeframe The length of time it takes to compile the requested documents will be determined by the project QE & Community. Funds transfer to a community require governing body approval of: Project Participation Agreement (PPA) between the QE & the Community; Intergovernmental Agreement (IGA) between the governing body/fiscal agent and the NMEDD; Security Document which secures the funds invested against non-performance and which may be clawed back in the event of such for the life of the project; A LEDA Ordinance which outlines the scope of work, including job creation information and capital investment made into the project. 6

7 Funds Disbursement Funding is on a reimbursement basis. Once the process is completed, funds are transferred to the community but may not be disbursed until the Qualified Entity submitted invoices are approved by NMEDD. Compliance QE are required to submit Department of Labor form ES 903A to report on job creation for the life of the project. The Fiscal Agent will submit semi-annual reports to NMEDD due by the end of month May and the end of the month of November outlining project performance and community impact. 7

8 Questions? Juan Torres Finance Development New Mexico Economic Development Department

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