Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR Woods/Stefanics
LAST UPDATED
ORIGINAL DATE 2
/1/2025
SHORT TITLE New Qualifying Entities in LEDA
BILL
NUMBER Senate Bill 181
ANALYST Fischer
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 FY26 FY27
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected 0 $100.0 $100.0 $200.0 Recurring General Fund
Total 0 $100.0 $100.0 $200.0 Recurring General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Sources of Information
LFC Files
Agency Analysis Received From
Economic Development Department (EDD)
SUMMARY
Synopsis of Senate Bill 181
Senate Bill 181 (SB181) amends the Local Economic Development Act (LEDA) to expand the
definition of qualifying entities eligible for economic development support to include dental
clinics, independent medical practices, and veterinary facilities. It will not include hospitals and
hospital-controlled facilities. SB181 alters the types of businesses eligible for public support and
broadens the scope of economic development initiatives. The bill maintains provisions for public
support, such as grants, loans, and infrastructure improvements to assist qualifying entities.
This bill does not contain an effective date and, as a result, would go into effect 90 days after the
Legislature adjourns if enacted, or June 20, 2025.
FISCAL IMPLICATIONS
Regardless of the expanded scope, the LFC’s recommended budget proposal does not include
additional funding for LEDA. As of June 2024, the LEDA fund had a balance of $62.2 million,
27 percent less than the previous year.
SIGNIFICANT ISSUES
Senate Bill 181 – Page 2
The Economic Development Department noted that the expanded definitions in SB181 would
move investments away from economic-base businesses. According to the department, the intent
of LEDA is to support economic-base companies that export at least 50 percent of their product
or services to a client base outside of the state, thereby infusing the economy with new money
rather than recycling money that already exists within the economy, such as with retail industry.
Healthcare is not considered an economic-base industry. Supporting economic-base industry
results in capital investment, sales from a client base outside the state, and new jobs, which all
contribute to the tax base. This increased economic activity then fuels growth in the other non-
economic base sectors, such as retail, hospitality, and healthcare.
The Economic Development Department noted that SB181 would require additional resources
for it to review, process, and track a wider range of economic development projects. This
increase in workload may lead to higher personnel costs for managing new project approvals and
compliance reporting, though the department did not specify a particular amount. This FIR
estimates the amount to be $100 thousand annually. The total financial impact on state and local
governments will depend on how many new projects seek support and the scale of financial
assistance required. As more entities become eligible for public support, the fund may face
higher utilization, requiring quicker replenishment or additional appropriations to sustain the
program.
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