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State economic official explains how IRBs and gross-receipts sharing can bring large projects to Doña Ana County
Summary
A state economic development representative told commissioners Industrial Revenue Bonds and the Local Economic Development Act grocery gross-receipts sharing can produce net revenue gains for the county while inducing large private investment.
The Doña Ana County Board of County Commissioners received a detailed presentation April 22 from the state’s economic development representative on how Industrial Revenue Bonds (IRBs) and the Local Economic Development Act (LITA) grocery gross‑receipts tax share work, and how those tools can be used to recruit large industrial or manufacturing projects.
Mark Roper (state economic development) explained IRBs are conduit bonds issued by a local government that do not pledge government revenue or credit; instead, the company’s credit supports the bond. The principal local fiscal effects are temporary property-tax abatements and sales/compensating tax exemptions during the term of an IRB. Roper illustrated an example: a hypothetical project involving $400 million in buildings plus $200 million in equipment on roughly 200 acres. He showed how negotiated pilot payments (payments in lieu of taxes) during an abatement period typically still produce more annual revenue for the taxing entities than the unimproved property generated previously.
Roper also outlined a grocery gross-receipts sharing option added to LITA for very large projects (construction over $350 million). The statute permits the state and county to share a portion of the gross-receipts tax (GRT) general‑fund proceeds with the company; the state and county retain part of the increment. Using the same hypothetical project, Roper said the combined net new GRT and other receipts over 30 years could produce a material net fiscal gain compared with the status quo.
Commissioners asked clarifying questions about how IRB property‑value increments and later expansion of a facility would be handled. Roper explained that the negotiated IRB is sized to the planned investment and any expansions beyond that typically require further approvals and renegotiation. He emphasized that IRBs are intended to induce investments that otherwise would not occur in the jurisdiction.
Roper closed by emphasizing the tools are not giveaways, but investment inducements that can deliver incremental revenue, construction activity and jobs. Commissioners thanked him and asked for additional follow-up materials and modeling for specific local sites.
No formal action was taken; the presentation was informational and placed in the record.
