Industrial Revenue Bond (IRB)
IRBs enable local governments to provide a mechanism for low-cost financing and other incentives (property tax exemption and gross receipts tax exemption for equipment purchased for facility) for private parties to create facilities that enhance employment in the locality with capital investment in excess of $3 million.
The form of the transaction puts the legal title to the project in the name of the issuing entity (City). The issuing entity then typically leases the project to the grantee of the IRB, and its lease payments or purchase price payments are then used to pay off the interest and principal on the bonds for a period of time up to a maximum of 30 years. IRBs are usually self-financed by the grantee, and unlike other types of bonds, the issuing entity (City) does not carry the debt for an IRB.
An application fee applies (one-tenth of one percent of the amount financed), clawback provisions are required to guard the City against nonperformance by the grantee, and Governing Body approval is required for enactment.
Local Economic Development Act (LEDA)
Per the New Mexico constitution, local or regional governments - to create new job opportunities - can provide land, buildings or infrastructure for facilities to support new or expanding businesses.
The city of Rio Rancho adopted by ordinance an economic development plan outlining its economic development goals and strategies.
A qualifying business may submit a project application for consideration that is in compliance with the city's plan. Once the city has done its due diligence in reviewing the application, the project agreement can be sent to the Governing Body for consideration.
The participation agreement sets out the contributions to be made by each party, the security provided to the local government by the qualifying entity, a schedule for project development and completion, and provisions for performance review and actions for unsatisfactory performance.
Requires Governing Body approval to be enacted.
Local Economic Development Funds: City and County
Additional State-level incentives may be available for projects in Rio Rancho. For more information, please visit Sandoval Economic Alliance’s website at http://sea-nm.com/incentives/.
Please be advised that applications, fees, extensive review, and other requirements apply to each of these programs. For more information or questions, please contact the City Manager's office by telephone at (505) 891-5002.