HOUSE BILL 883

49th legislature - STATE OF NEW MEXICO - first session, 2009

INTRODUCED BY

Thomas C. Taylor

AN ACT

RELATING TO PROCUREMENT; ENACTING THE CLEAN GOVERNMENT CONTRACTING ACT; IMPOSING CERTAIN CONDITIONS FOR CERTAIN SOLE-SOURCE CONTRACTS; ESTABLISHING PENALTIES FOR VIOLATIONS OF CONDITIONS; PROVIDING EXCEPTIONS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     Section 1. SHORT TITLE.--This act may be cited as the "Clean Government Contracting Act".

     Section 2. PURPOSE.--The purpose of the Clean Government Contracting Act is to prevent influence peddling and the appearance of public corruption between government officials and sole-source government contractors, which undermine public confidence in New Mexico government, and to restore the public's confidence in elected officials.

     Section 3. DEFINITIONS.--As used in the Clean Government Contracting Act:

          A. "government" means the executive, legislative and judicial branches of state and local governments and all advisory boards, commissions, committees, agencies or entities created by the constitution or any branch of government that receives any public funding, including counties, municipalities and other political subdivisions, special taxing districts, school districts and institutions of higher education;

          B. "government contract" means a contract awarded by a government for the procurement of goods and services, including a collective bargaining agreement with a labor organization representing government employees;

          C. "major sole-source government contract arrangement" means a government contract, or a series of government contracts held at one time, in which the following characteristics exist:

                (1) the total actual or accrued payment obligations of the non-governmental party or its principal stakeholders to the arrangement exceed a total cumulative annual monetary value of fifty thousand dollars ($50,000); and

                (2) the government contract is awarded without a fair and open public competitive bidding process that includes, at a minimum, the bona fide public solicitation of no less than three competitive bids or, in the case of collective bargaining agreements with a labor organization representing employees, the contract for services confers upon a labor organization an exclusive representative status to bind all employees to accept the terms and conditions of the agreement;

          D. "non-governmental party" means the person to whom a government contract is awarded and, in the case of a collective bargaining agreement with a labor organization representing government employees, a labor organization if the contract for services confers upon the labor organization an exclusive representative status to bind all employees to accept the terms and conditions of the agreement;

          E. "principal stakeholder" means a person with the following relationship to a non-governmental party to a government contract:

                (1) owns at least a five percent interest, as a stockholder, member or otherwise;

                (2) is a trustee or a member of the board of directors, except uncompensated members of the board of directors of a nonprofit charitable organization that qualifies for tax-exempt status pursuant to Section 501(c)(3) of the federal Internal Revenue Code of 1986, as amended;

                (3) is a president, treasurer, executive vice president, chief executive officer or similar officer that possesses comparable powers and duties;

                (4) is an officer or agent who has primary managerial or discretionary responsibilities with respect to the government contract;

                (5) is a subcontractor, or its principal stakeholder, with at least a five percent stake in the government contract;

                 (6) is the spouse or a dependent child who is eighteen years of age or older of a person described in this subsection; or

                (7) is a political committee established or controlled by a person described in this subsection; and

          F. "solicit" means to make an express or clearly implied request or inducement that a contribution and active participation be made in fundraising activities for a candidate committee, exploratory committee, political committee or party committee, including forwarding tickets to potential contributors, receiving contributions for transmission to any of those committees, serving as chairperson, treasurer or deputy treasurer of any of those committees or establishing a political committee for the sole purpose of soliciting or receiving contributions for a committee. "Solicit" does not include informing a person of a position taken by a public official or candidate, notifying the person of activities, campaign events or contact information for a public official or candidate without suggesting that they should attend or contribute or serving as a member in a party committee or as an officer of that committee so long as the person is not directly engaged in any fundraising activities.

     Section 4. CONDITIONS FOR MAJOR SOLE-SOURCE GOVERNMENT CONTRACT ARRANGEMENTS.--

          A. A non-governmental party to a major sole-source government contract arrangement and its principal stakeholders shall contractually agree, for the duration of the contract term and for two years thereafter, not to make or actively solicit contributions, directly or indirectly, to or for the benefit of a candidate or campaign committee of a candidate for nomination or election to any elective office in the state.

          B. A prospective non-governmental party to a major sole-source government contract arrangement and its principal stakeholders shall contractually agree, during active contract negotiations, not to make or actively solicit contributions, directly or indirectly, to or for the benefit of the campaign committee of a candidate for nomination or election to any elective office in the state.

          C. A prospective non-governmental party to a major sole-source government contract arrangement and its principal stakeholders shall contractually agree not to make or actively solicit contributions, and shall not have made, pledged or actively solicited any contributions or expenditures, directly or indirectly, to or for the benefit of any ballot measure, political committee or other person for the purpose of influencing voter approval of a bond issue or other measure that would authorize, reauthorize or fund any project that involves that specific government contract, a related contract or its renewal.

          D. A major sole-source government contract arrangement shall have the provisions required in this section incorporated into the government contract.

          E. A non-governmental party to a major sole-source government contract arrangement, its principal stakeholders and all government officials responsible for negotiation, management, payment, inspection or certification of the arrangement or pursuant to provisions of the arrangement shall be responsible to submit, on a continuing basis, current and accurate information about the arrangement to the department of finance and administration, but shall not be required by this section to make any public disclosure that would violate federal law, trade secrets or intellectual property rights. The department of finance and administration shall:

                (1) promulgate a rule for the reporting of the information required in this subsection that includes the:

                     (a) date of the government contract award;

                     (b) beginning and end dates of the government contract;

                     (c) estimated amount and rate of payment;

                     (d) reason the government contract was awarded as a sole-source contract;

                     (e) nature of the goods or services to be procured; and

                     (f) identity of the non-governmental party and each of its principal stakeholders and the identity of the government officials responsible for negotiation, management, payment, inspection or certification of the government contract; and

                (2) promptly publish and maintain the information required in this subsection in a database available on the department of finance and administration's internet web site. The database shall be indexed and searchable so that names of non-governmental parties and their principal stakeholders may be ascertained and compared against campaign contribution and expenditure disclosures published by the government.

     Section 5. ANTI-CIRCUMVENTION.--In order to prevent attempts to circumvent the Clean Government Contracting Act, it shall be a contract violation for a non-governmental party to a major sole-source government contract arrangement or its principal stakeholders to knowingly participate in a scheme to require, coerce, engage, use or entice a family member, individual, employee, subcontractor, agent, political committee or other person or entity to act as a conduit for the indirect making or solicitation of campaign funds to or from a political party, political organization, political action committee, separate segregated fund or other political committee authorized by law to make contributions or expenditures to or for the benefit of a candidate or the campaign committee of a candidate for nomination or election to any elective office in the state.

     Section 6. VIOLATIONS.--

          A. A non-governmental party or its principal stakeholders to a major sole-source government contract arrangement, who intentionally violate a condition pursuant to Section 4 of the Clean Government Contracting Act, directly or by circumvention, shall be ineligible to be a party or principal stakeholder of a party to a major sole-source government contract arrangement or a public employee with the contracting government for three years and may be subject to contract liability to pay restitution to the general treasury of the contracting government to compensate the public for costs and expenses associated with the breach, including costs and losses involved in securing a new government contract, if necessary.  

          B. A public official or candidate for an elective office in the state who intentionally participates in a scheme to violate a condition pursuant to Section 4 of the Clean Government Contracting Act, directly or by circumvention, or a person who intentionally accepts contributions on behalf of a candidate committee, political committee, political party or other entity in violation of that condition, may be liable to pay restitution to the general treasury of the contracting government to compensate that government for all costs and expenses associated with the violation, including costs and losses involved in securing a new government contract, if that becomes necessary. Intentional participation shall be grounds for removal from office and disqualification to hold any office in government in the state and shall constitute misconduct and malfeasance in office.

          C. If a person responsible for the bookkeeping of a person that seeks or has a major sole-source government contract arrangement with a government, or if a person acting on behalf of a government obtains knowledge of a contribution made or accepted in violation of the Clean Government Contracting Act, and that person intentionally fails to notify the secretary of state or the attorney general about the violation in writing within ten business days of learning of such contribution, the person may be liable to pay restitution to the general treasury of the contracting government to compensate that government for all costs and expenses associated with the violation, including costs and losses involved in securing a new government contract, if that becomes necessary.

          D. The secretary of state or the attorney general may enforce the provisions of the Clean Government Contracting Act. A registered voter of the state may enforce the provisions of the Clean Government Contracting Act by filing a complaint for injunctive or declaratory relief or for civil damages and remedies in the district court.

     Section 7. EXEMPT CONTRACTS, PERSONS AND ACTIVITIES.--The Clean Government Contracting Act shall not:

          A. prevent public or private employees who are subject to collective bargaining agreements, or their families, from freely making and soliciting political contributions on their own account, with their own money, to any candidate of committee they choose, unless they are themselves a direct party to a major sole-source government contract arrangement, a principal stakeholder of that party or a conduit knowingly acting on behalf of another in circumvention of an agreement pursuant to the Clean Government Contracting Act;

          B. prevent a person from freely engaging in political speech or activity, including volunteering for a candidate's political campaign in a non-fundraising capacity, placing a lawn sign at the person's property, making get out the vote calls, expressing support for a candidate or the candidate's views, advising someone whether a candidate is likely to be elected, communicating the person's evaluations of an official or candidate to the person's clients or to another person, making independent expenditures on behalf of a candidate, providing advice to an official or candidate for public office, running for public office, being the spouse or dependent child of someone running for office, contribute to a political committee that is not established or controlled by a candidate, attending campaign events for candidates that do not involve fundraising or hosting an event for a candidate that is not a fundraising event;

          C. apply to a contract to provide licensed professional legal services or medical services or medicines to members of the public, including indigents, persons with disabilities, elderly persons or other persons as provided by law, at standardized rates or amounts fixed by the government, if that contract is regularly offered, without preference, to a broad range of individual qualified professional providers;

          D. apply to the combined incidental purchases of goods or services on the open retail market;

          E. apply to inadvertent technical violations by a person where the exercise of due diligence could not reasonably have been expected to have made the person aware of the violation, and where the violation was cured within three days of its discovery; or

          F. apply to a government agreement or contract with the state, any state agency or any quasi-public agency that is exclusively federally funded, an education loan or a loan to an individual for other than commercial purposes.

     Section 8. SEVERABILITY.--If any part or application of the Clean Government Contracting Act is held invalid, the remainder or its application to other situations or persons shall not be affected.

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