Lea County offers attractive incentive packages that may include industrial revenue bonds and assistance with permitting and infrastructure that can be used in conjunction with state job training reimbursements and tax credits and abatement. Please contact us for more information about incentives that may apply to your project.
Industrial Revenue Bonds
Industrial revenue bonds may be issued to finance privately-operated and developed projects by a municipality, county, or the New Mexico Finance Authority. The private party initiates the process by requesting that the government unit issue the bonds (a political process done in accordance with local and state laws). IRBs can be issued for projects over $3 million dollars.
IRBs offer property and gross receipts tax relief to a company. The project financed is actually owned in trust by the governmental issuer of the IRB and leased to the private operator under a finance lease (which allows the private operator to take the depreciation on the project for tax purposes in addition to a deduction for interest paid on the IRBs). Tangible personal property (other than building materials and related construction services) purchased with IRB proceeds is deductible for gross receipts tax purposes because it is being sold to a government purchaser. IRBs of $10 million or less issued to finance manufacturing facilities may also be eligible for exclusion of interest from gross income for federal income tax purposes (effectively lowering the interest rate on the IRBs).
Through the Statewide Economic Development Finance Act, the Economic Development Department can recommend projects to the New Mexico Finance Authority for issuance of taxable and tax-exempt IRBs. (Note: IRBs are called IDBs in other jurisdictions).
Local Economic Development Act (LEDA) Fund
The City of Lovington has economic development monies that may be awarded, via an application procedure, to qualified projects. The funds are generated through gross receipts collected within the city limits. There is an application that must be filled out by the company seeking this incentive.
The Local Economic Development Act (LEDA), 5-10-1 NMSA 1978, allows communities to provide assistance to qualified economic development projects while maintaining safeguards against the unauthorized use of public resources.
Economic development projects must create new job opportunities. After a local governmental entity creates and adopts an economic development plan, a qualifying business is required to submit a project application, including all information the local government deems necessary. Projects are approved by ordinance, and the local government may negotiate with a qualifying business on the type and amount of assistance to be provided.
Up to 10 percent of annual general fund expenditures may fund economic development projects. New revenue may also be generated through the imposition of a local option gross receipts tax (LOGRT), specifically designed for economic development projects.
LEDA further allows municipalities and counties to enter into joint-power agreements to plan and support regional economic development projects, including investments in arts and cultural districts.