RULE 168.00.13-004 - Regional Economic Development Partnership Act

RULE 168.00.13-004. Regional Economic Development Partnership Act

I. Program Summary

Act 895 of 2011 (§ 15-4-3401 et seq.), as amended, authorized the creation of regional economic development partnerships and addressed the governance of these partnerships as well as funding opportunities and responsibilities. The 2011 act, and 2013 amendment, outlined the provisions needed to implement the legislation and provide the Arkansas Economic Development Commission with the ability to promulgate rules and regulations addressing all aspects of the approval and funding of a regional economic development partnership.

It is the purpose of this rulemaking to make as clear as possible the procedures and approvals required by this act.

II. Definitions

A. "Commission" means the state agency known as the Arkansas Economic Development Commission;

B. "Economic development region" means a group of municipalities or counties that includes at least two (2) counties and has formed a regional economic development partnership;

C. "In-kind contributions" means items given to a regional economic development partnership, including, without limitation, donated office space, equipment, staff, and other items specifically approved by the commission; and

D. "Regional economic development partnership" means an organization whose mission is to promote specific regions within the state in accordance with the intent described under § 15-4-3402.

III. Membership in a Regional Economic Development Partnership

A. A regional economic development partnership shall satisfy the following requirements:

1. The economic development region proposed includes the active participation of at least two (2) contiguous counties;

2. The economic development region is of adequate size in population to:

a. Effectively undertake economic development activities while remaining a distinct and viable region for attracting new investment; and

b. Generate adequate regional resources to provide matching funds;

3. The economic development region is economically integrated as determined by commuting patterns, economic base, major employers, membership in a defined metropolitan or micropolitan statistical area, or other indicators determined by the Arkansas Economic Development Commission;

4. Any county seeking to join a regional economic development partnership must adopt an ordinance seeking membership in the regional economic development partnership; and

5. The regional economic development partnership, by a majority vote of its board of directors, that are residents of Arkansas, may approve the membership of a requesting county after having received a copy of the approved ordinance seeking membership.

B. The Arkansas Economic Development Commission may allow an existing entity that applies to be a regional economic development partnership to maintain the entity's existing rules regarding membership, terms, and duties of the board of directors.

IV. Board of Directors

A regional economic development partnership formed on or after January 1, 2013, shall be governed by a board of directors that shall operate, manage and control the regional economic development partnership in all respects. The following shall apply to boards of directors of regional partnerships formed on or after January 1, 2013:

1. The Board of Directors shall contain at least one (1) representative from each county that is a member of the regional economic development partnership.

2. The governing body of each county that is a member of the regional economic development partnership shall appoint members of the board of directors.

3. Each member of the board shall serve for a term as provided under the bylaws of the regional economic development partnership.

4. A person appointed to the board of directors may be a representative of either a public or a private entity.

V. Application for Approval

A. An entity seeking approval from the Arkansas Economic Development Commission as a regional economic development partnership under § 15-4-3401 et seq. shall submit an application provided by AEDC.

B. The application shall contain at least a three-year strategic plan that is consistent with the Governor's Strategic Plan for Economic Development and includes the following:

1. The proposed activities of the partnership; and

2. A budget for the next calendar year clearly identifying the proposed expenditure for which the grant funds are requested.

C. Also, the application shall provide the following information:

1. Proof of organization (include copies of corporation filings with the Secretary of State);

2. A copy of the entity's:

a. Governing documents approved by the entity's governing board;

b. Bylaws; or

c. If incorporated, the Articles of Incorporation;

3. A map of the economic development region and the population served by the partnership, based on the latest decennial census;

4. The identity of each public organization and private organization, active in economic development, within the economic development region and the role each organization will undertake in the regional economic development partnership;

5. A list of the current members of the board of directors and the entity each member represents;

6. Evidence of:

a. The staff dedicated to the regional economic development partnership; or

b. The staff dedicated to program management of the regional economic development partnership.

i. Dedicated staff may be employed by an entity other than the regional economic development partnership; and

7. Be prepared to provide local match, in a ratio of 1:1 to access state funding for regional economic development. These agreements between the regional partnerships and the state will be for a term of one-year and may be renewed beyond the year in which funding was first provided under this act.

VI. Staff

A. Staff members and positions may be comprised in whole or in part by direct employees hired by the regional economic development partnership, persons employed by entities contracting with and performing services on behalf of the regional economic development partnership, volunteers or interns contributing in-kind staffing services to the regional economic development partnership, and persons employed and compensated by third-party entities to perform services on behalf, and at the request of, the regional economic development partnership.

B. The primary responsibility of the staff is to market, promote and develop the economic development region to attract site selectors and business prospects and to accomplish the goals and objectives of the strategic plan required by § 15-4-3405 (b)(1).

VII. Termination of Partnership

A. A board of directors of a regional economic development partnership may terminate the regional economic development partnership upon a majority vote of the board of directors.

B. At least a thirty (30) day notice of intent to terminate a regional economic development partnership must be sent to the Arkansas Economic Development Commission prior to the vote on termination.

C. Upon termination of a partnership, the board of directors shall remit any unspent state funds to the commission within sixty (60) days of the notice to terminate the regional economic development partnership.

VIII. Funding

A. State Funds

1. Each regional economic development partnership approved by the commission shall enter into an agreement with the Arkansas Economic Development Commission to receive state funds, if available.

2. The agreement shall be:

a. For a term not to exceed one (1) year; and

b. Identify the eligible expenses for which the regional economic development partnership intends to use state funds.

3.

a.

Subsequent one (1) year agreements may be entered into by the regional economic development partnership and AEDC, following the commission's review of the annual report of the regional economic development partnership.

b. If a regional economic development partnership was initially approved as a multi-year project, a one-year renewal may by granted by the commission without the regional economic development partnership submitting an annual application.

4. Each year the commission shall allocate funds specifically appropriated by the General Assembly or the commission for regional economic development.

a. The funds shall be distributed equally to the qualifying regional economic development partnerships that meet the matching fund requirements under § 15-4-3408.

b. Funds that are not disbursed under this section during a fiscal year may be distributed in a subsequent fiscal year.

5. If a regional economic development partnership includes a territory located in another state, regional funding provided under this subchapter shall only be provided to a county in Arkansas.

B. Matching Funds

1. A regional economic development partnership shall match the state funds allocated to the regional economic development partnership on the basis of at least one dollar ($1.00) local matching funds for every one dollar ($1.00) of state funds.

2. If a regional economic development partnership does not provide proof of sufficient matching funds before the release of state funds, the Arkansas Economic Development Commission shall reduce the award of state funds in the amount necessary to adhere to the required one-to-one ratio of local matching dollars to state dollars.

3. Local matching funds may be:

a. Provided by public sources, private sources, or a combination of public and private sources;

b. Received in the form of cash, in-kind contributions, or a combination of cash and in-kind contributions; and

c. In-kind contributions shall not be more than forty percent (40%) of the regional economic development partnership's total matching funds.

C. Eligible Uses of State Funds

State funds under § 15-4-3401 et seq., shall be used only for marketing, advertising, promoting, and other activities related to implementing the required strategic plan.

D. Ineligible Uses of State Funds

1. State funds under § 15-4-3401 et seq., shall not be used for administrative costs.

2. Ineligible uses of state funds include, without limitation, payment for the following expenses:

a. Administrative salaries, benefits, general administrative costs, and salaries and benefits related to economic development;

b. Overhead expenses, including, without limitation, postage, shipping, rent, subscriptions, equipment, furniture, fixtures, telephone and utilities;

c. Travel and conference expenses within the state;

d. Local promotions or sponsorships;

e. Stationery, paper, pens, and general office supplies;

f. Construction and infrastructure costs;

g. Membership dues;

h. Alcoholic beverages; and

i. Gratuity on meals, including meals related to activities classified as eligible expenses.

IX. AEDC Responsibilities

A. The commission shall review each application submitted under the provisions of § 15-4-3405 and shall certify that:

1. The applicant satisfies the general qualification requirements in § 15-4-3404; and

2. The application submitted under § 15-4-3401 et seq. includes the information required. B. The commission shall notify unsuccessful applicants in writing of the deficiencies of the application.

X. Annual Reports

A. A regional economic development partnership that receives state funding under § 15-4-3401 et seq., shall submit an annual report to the Arkansas Economic Development Commission.

B. The annual report shall include the following:

1. A description of the economic development activities and organizational activities of the regional economic development partnership in the preceding twelve (12) months;

2. A detailed financial report;

3. A detailed budget for the next twelve (12) months; and

4. A description of the proposed activities of the regional economic development partnership for the next twelve (12) months for which state funding under § 15-4-3401 et seq., is being requested.

XI. Rules

§ 15 -4-3401 et seq. authorizes the Arkansas Economic Development Commission to promulgate these rules.

(9/16/2013)

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