AN ACT CONCERNING REGIONAL ECONOMIC DEVELOPMENT.

This bill allows regional planning and economic development organizations to propose regional economic development districts (REDDs), prepare strategies to develop them, and apply for state and federal economic development funds. The bill specifies criteria for drawing district boundaries and procedures for preparing, reviewing, and approving strategies.

The procedures require proposed districts and strategies to be approved by the Department of Economic and Community Development (DECD) commissioner and the Office of Policy and Management (OPM) secretary. After these agencies approve a strategy, the district may submit it to the U. S. Commerce Department (DOC) for approval and to apply for and receive federal funds.

USDOC provides matching funds for developing infrastructure, preparing strategic plans, and training workers in economically distressed regions. Projects in a federally approved REDD qualify for these funds regardless of whether the region is distressed. The REDD qualifies for extra dollars if they complete a federally funded project that achieves its goals.

DECD and regional planning organizations (RPOs) whose jurisdictions include a district must consider its strategy when preparing or revising their respective development plans. DECD prepares a five-year statewide strategic plan and RPOs prepare a 10-year regional conservation and development plan. OPM prepares the five-year state Plan of Conservation and Development (Plan of C&D). When preparing this plan, the bill requires the secretary to consider DECD's plan.

The bill allows several types of organizations, by themselves or together with similar organizations, to designate REDDS and establish boards to govern them. The organizations that can establish REDDs are regional economic development commissions and corporations, nonprofit corporations, RPOs, and other organizations with a federally approved comprehensive economic development strategy (CEDS).

(Although the bill provides no criteria for organizing a district and establishing its board, these entities must meet federal designation criteria before DOC can approve their CEDSs (see BACKGROUND). )

A proposed district's boundaries must, to the extent practicable, be contiguous with the boundaries of the 10 state-designated labor market areas or encompass a region with an approved CEDS.

A district's board must prepare and approve a CEDS that addresses the region's economic development problems. The strategy must do this in a manner that:

1. promotes economic development and opportunities,

2. fosters effective transportation access,

3. improves workforce development,

4. enhances and protects the environment, and

5. balances resources by soundly managing development.

(Federal law also requires CEDS to address promoting the use of technology in economic development (42 USC § 3162 (a) (3) (A). )

1. analyze the district's economic and community development problems and opportunities and incorporate information or suggestions from other publicly sponsored or supported plans;

2. provide historical and current information about the district's economic development situation, including its economy, geography, population, labor force, resources, and environment;

3. describe how the community participated in developing the strategy;

4. set goals and objectives for taking advantage of the district's opportunities and solving its economic development problems;

5. provide an action plan to achieve these goals and objectives; and

6. specify the performance measures the board will use to determine if the goals are being met.

The board must formally approve the CEDS and submit it to regional and state agencies and the DOC secretary for review or approval.

It must first submit the CEDS to the regional planning organizations that do not belong to the district but serve a part of it. These organizations have up to 90 days to study the strategy and report their findings and recommendations to the board.

The board must then submit the CEDS to the DECD commissioner and the OPM secretary, who have up to 60 days after receiving it to approve it or recommend changes making it consistent with their respective five-year plans. By law, the commissioner prepares the state economic development strategic plan, the first iteration of which is due July 1, 2009. The secretary prepares the State Plan of Conservation and Development (Plan of C&D), the next revision of which is in 2010.

The board must bring the strategy into line with the commissioner and secretary's recommendations and resubmit it to them for review. These officials have up to 60 days to act on the initial or subsequent submission. If they do not, the strategy is tacitly approved.

After the commissioner and the secretary approve the strategy, the board may submit it to DOC for approval under federal law. But the board does not have to take this step if DOC already approved the strategy.

The board must submit annual reports to the commissioner and the secretary on the plan's implementation. It must revise the strategy every five years and submit it to the state officials for review and approval under the same procedures they used to review and approve the initial strategy.

The bill requires the commissioner and the secretary to consider CEDSs when preparing or updating their respective development plans. The commissioner must prepare a five-year strategic plan that must, among other things, review and analyze the factors, issues, and forces affecting or impeding economic growth in the state and its regions. In doing so, she must:

1. address the same issues and provide the same type of information and analyses as the CEDSs;

2. consider local and district economic strategies and insure, to the extent practicable, that the state plan is consistent with the strategies; and

3. identify and justify any inconsistencies between the two sets of plans.

The bill requires the OPM secretary to consider the state strategic plan each time he revises the five-year Plan of C&D.

Federal law allows entities to designate districts, establish organizations to plan and implement regional strategies, and qualify for economic development dollars. It specifies the criteria DOC must use to approve a proposed district. Based on the criteria, DOC must approve the district if it:

1. contains at least one economically distressed area,

2. encompasses a sufficiently large area and has enough people and resources to foster economic development of more than one economically distressed area,

3. has a DOC-approved CEDS that was also approved by a majority of the counties in the proposed district, and

4. obtains the current approval of the state or states in which it is located.

The organization responsible for managing the district must also meet federal criteria. The organization can be a:

1. public organization exercising local government powers under an interlocal agreement;

2. public, multi-jurisdictional planning organization established under state law; or

3. nonprofit organization.

The district's governing body must broadly represent the region's economic interests. It must include at least one person representing the private sector and one or more people representing executive directors of chambers of commerce, colleges and universities, and workforce development and labor groups. These members must comprise at least 35% of the board. At least a majority of the members must be elected officials or government employees (13 CFR § 304. 2).

Organization sponsoring projects in federally approved REDDs qualify for additional planning and development funds. An organization qualifies for a planning performance grant if it participated in the district's activities and the project complemented the district's CEDS. The performance grant may be for up to 5% of the initial project grant (42 USC § 3154b).

Projects that do not otherwise qualify for federal grants do so if they are located in a REDD. As a rule, a project qualifies if it is located in an economically distressed area with a CEDS. Projects in nondistressed areas qualify only if the area is part of a REDD (13 CFR § 301. 3).

Yea

Nay

(03/10/2009)