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Economic development discussion gets new life

Most of the temporary fencing that had been put up around the Roundhouse as a security measure was removed Monday. But the Capitol will still be closed to lobbyists and the public during a special session scheduled to start at noon Tuesday. (Eddie Moore/Albuquerque Journal)

Copyright © 2021 Albuquerque Journal

SANTA FE – Much of the focus for a special session scheduled to begin at noon Tuesday has been on a proposal to legalize, tax and regulate cannabis for adult use.

But Gov. Michelle Lujan Grisham has added a second issue to the special session mix – a bill to expand a state economic development program that is already in line for a big funding infusion.

In announcing the special session agenda last week, Lujan Grisham called the program a “winner” for New Mexico and said it would create higher-paying jobs and a more diverse state economy.

“One thing we have learned about job creation in our state’s recent history is that we can’t keep doing exactly the same things from the same old playbook,” Lujan Grisham said.

Specifically, the economic development proposal would authorize some tax revenue generated by large-scale construction projects to be recaptured by a state “closing fund” used to offset the costs of business expansions and relocations.

Such an arrangement would also require approval by local governments that participate in the Local Economic Development Act, which functions as the state’s closing fund.

Economic Development Department spokesman Bruce Krasnow said Monday that the proposal – which would apply only when infrastructure and construction costs exceed $350 million – is targeted at manufacturing companies, but not at any specific project currently in the state’s pipeline.

“Nothing is on the table now, but we are seeing more and more inquiries from large job-creating companies interested in relocating or expanding operations in New Mexico, and this will give us another tool to compete with bigger, wealthier states for these jobs,” Krasnow told the Journal.

A similar tax arrangement was offered in 2017 to entice Facebook to build a massive data center in Los Lunas, although that incentive package involved tax reimbursements and industrial revenue bonds, among other provisions.

During this year’s 60-day session, the economic development proposal was initially included in a small-business grant measure but was stripped out by a Senate committee to simplify the bill.

It was later amended into a separate bill that stalled on the House floor when the session ended March 20.

Meanwhile, lawmakers also appropriated $100 million from a federal pandemic relief package for the state’s closing fund in a $7.4 billion budget bill that is awaiting Lujan Grisham’s signature.

But Krasnow said Monday that it’s unclear whether that will ultimately be determined to be an allowable use of the federal funds.

New Mexico special sessions can last up to 30 days per the state Constitution, but this week’s special session is expected to be wrapped up in just a few days, according to legislative leaders.

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