PA 10-168—sHB 5383

Planning and Development Committee

Finance, Revenue and Bonding Committee

AN ACT CONCERNING REGIONAL ECONOMIC DEVELOPMENT

SUMMARY: This act allows regional planning and economic development organizations to propose regional economic development districts (REDDs) that the governor designates, prepare strategies to develop them, and apply for state and federal economic development funds. The act 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 Office of Policy and Management (OPM) secretary. After these agencies approve a strategy, the district may submit it to the U. S. Department of Commerce for approval and apply for and receive federal funds.

EFFECTIVE DATE: July 1, 2010

REGIONAL ECONOMIC DEVELOPMENT DISTRICTS (REDDs)

The act allows several types of organizations, by themselves or together with similar organizations, to establish REDDs, with the approval of the DECD commissioner and OPM secretary, and establish boards of directors to govern them. They are:

1. regional economic development commissions or corporations,

2. organizations with a federally approved comprehensive economic development strategy,

3. certain nonprofit corporations, and

4. regional planning organizations.

The act permits only eight REDDs to be established in the state. A proposed district's boundaries must encompass OPM-designated planning regions or, to the extent practicable, conform to county boundaries. Each district must include an area that meets economic distress criteria established in federal regulation (13 CFR 301. 3(a)(1)).

COMPREHENSIVE ECONOMIC DEVELOPMENT STRATEGY (CEDS)

The act requires any REDD board of directors to 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 opportunity and housing availability,

2. fosters effective transportation access,

3. improves workforce development,

4. enhances and protects the environment,

5. balances resources by soundly managing development, and

6. encourages responsible growth and development.

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

The strategy must:

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 background 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.

REVIEW AND APPROVAL PROCESS

The board must formally approve the CEDS and submit it to regional and state agencies for review and approval. It must first submit the CEDS to the regional planning organizations that include a geographic area served by the REDD unless the organization is not 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 was due July 1, 2009. The secretary prepares the State Plan of Conservation and Development (Plan of C&D), the next revision of which is due in 2012 (see BACKGROUND).

The board must conform the strategy to the commissioner's 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 deemed approved.

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

CONSOLIDATION AND FEDERAL APPROVAL

REDDs must submit their approved CEDSs to the DECD commissioner and OPM secretary for review for the purpose of consolidating strategies into no more than eight regions in the state. Once the state officials make recommendations and they and the REDD boards concur, the commissioner and secretary may submit the strategy to the U. S. Department of Commerce (DOC) for approval under federal law.

An approved REDD can request:

1. the DECD commissioner to recommend to the governor that she designate the district as an economic development district and

2. federal designation from the DOC as an economic development district, making it eligible for federal economic development grants.

GRANTS AND BOND FUNDS

The act explicitly authorizes the DECD commissioner to provide REDDs with priority regional grants, within available appropriations, for municipal development and Economic Development and Manufacturing Assistance Act projects. It also makes projects connected with the CEDS eligible for DECD bond funds.

BACKGROUND

Designating Districts under Federal Law

Federal law allows entities to designate districts, establish organizations to plan and implement regional strategies, and qualify for economic development funds through the DOC's Economic Development Administration's Investment Assistance Program. It specifies the criteria DOC must use to approve a proposed district. Based on the criteria in regulations, DOC approves the district if it:

1. contains at least one economically distressed area that meets specified unemployment and income thresholds,

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.

Related Act

PA 10-138 postpones the next revision of the State Plan of Conservation and Development from 2011 to 2012.

OLR Tracking: MJ: KM: VR: ts