SENATE BILL 241

56th legislature - STATE OF NEW MEXICO - first session, 2023

INTRODUCED BY

George K. Muñoz and Joseph Cervantes

 

 

 

 

 

AN ACT

RELATING TO PUBLIC FINANCE; ENACTING THE PROSPERITY AND ECONOMIC RESILIENCY ACT; CREATING THE PROSPERITY AND ECONOMIC RESILIENCY COUNCIL; PROVIDING POWERS AND DUTIES; CREATING THE PROSPERITY AND ECONOMIC RESILIENCY PERMANENT FUND AND THE PROSPERITY AND ECONOMIC RESILIENCY PROGRAM FUND; PROVIDING FOR SUBACCOUNTS IN THE PROSPERITY AND ECONOMIC RESILIENCY PROGRAM FUND; PROVIDING FOR AN ANNUAL DISTRIBUTION FROM THE PROSPERITY AND ECONOMIC RESILIENCY PERMANENT FUND TO THE PROSPERITY AND ECONOMIC RESILIENCY PROGRAM FUND; PROVIDING LIMITATIONS; MAKING A TRANSFER AND APPROPRIATIONS; DECLARING AN EMERGENCY.

 

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

     SECTION 1. [NEW MATERIAL] SHORT TITLE.--This act may be cited as the "Prosperity and Economic Resiliency Act".

     SECTION 2. [NEW MATERIAL] PROSPERITY AND ECONOMIC RESILIENCY--CATEGORIES OF NEED.--

          A. The Prosperity and Economic Resiliency Act identifies broad-based categories of major statewide problems and needs that require significant commitments of effort and funding by the state or by the state in concert with federal and local governments to solve or rectify problems. The scope of these categorical problems facing the state requires:

                (1) governmental, educational and private-sector programmatic and problem-solving innovation;

                (2) systemic improvements at all levels of government and a shared sense of urgency and responsibility;

                (3) the transformation of bureaucratic thinking based on the premise that decision making should be slow in order to maintain uniformity and control into dynamic organizations dedicated to solving New Mexico's impediments to prosperity and economic resiliency for all; and

                (4) a fiscal commitment from the legislature and governor to provide the resources needed to see projects through to completion.

          B. The Prosperity and Economic Resiliency Act creates nine broad, substantive categories of need, with the tenth category providing money for renovation or major repair and maintenance of existing state assets and funding for infrastructure planning and design for projects that may be funded by the prosperity and economic resiliency council or by other funding streams such as severance tax bonds and general obligation bonds. The categories of need are:

                (1) water conservation and delivery;

                (2) environmental, agricultural and climate resiliency;

                (3) energy, science, technology and innovation;

                (4) higher education and academic research;

                (5) physical, mental and behavioral health access and services;

                (6) rural economic development;

                (7) tribal initiatives;

                (8) cultural and creative economy;

                (9) courts and public safety; and

                (10) state assets and capital planning and design.

     SECTION 3. [NEW MATERIAL] PROSPERITY AND ECONOMIC RESILIENCY COUNCIL CREATED--MEMBERSHIP--ADMINISTRATIVE ATTACHMENT--STAFF.--

          A. The "prosperity and economic resiliency council" is created. The council consists of:

                (1) the secretary of finance and administration or the secretary's designee;

                (2) the directors of the permanent legislative committees or their designees;

                (3) the director of the administrative office of the courts;

                (4) the chief executive officer for the New Mexico finance authority or the officer's designee;

                (5) the executive director of the New Mexico municipal league or the executive director's designee;

                (6) the executive director of the New Mexico association of counties or the executive director's designee; and

                (7) nine ad hoc public members appointed as follows so that each member has expertise in one of the first nine categories of need specified in Section 2 of the Prosperity and Economic Resiliency Act:

                     (a) six members appointed by the New Mexico legislative council; and

                     (b) three members appointed by the governor. 1

          B. No more than five public members shall be from the same political party. Public members shall serve staggered six-year terms; provided that initial appointees shall draw lots to see who serves two-year, four-year or six-year terms. No public member may serve more than one term on the prosperity and economic resiliency council. Vacancies of public member positions shall be filled by appointment by the appointing entity for the remainder of the unexpired term; and vacancies of ex-officio positions shall be filled by designees. Public members are entitled to receive per diem and mileage as provided for nonsalaried public officers in the Per Diem and Mileage Act and shall receive no other compensation, perquisite or allowance. Public members attending virtually shall not be eligible for mileage reimbursement.

          C. The chair and vice chair of the council shall be elected by the board. The board shall meet at the call of the chair but not less often than three times each calendar year. Members may attend meetings virtually. A majority of members constitutes a quorum for the transaction of business, and the affirmative vote of a majority of the members present is necessary for an action taken by the board that is not a vote for project approval or for emergency transfers as provided in Section 4 of the Prosperity and Economic Resiliency Act, which actions require a two-thirds' majority vote by the ex-officio members.

          D. The prosperity and economic resiliency council is administratively attached to the department of finance and administration. The federal grants bureau and the capital outlay bureau of the state budget division and the local government division, including the rural equity ombud, of the department of finance and administration and the facilities management division of the general service department shall serve as staff for the council.

     SECTION 4. [NEW MATERIAL] PROSPERITY AND ECONOMIC RESILIENCY COUNCIL POWERS AND DUTIES--PROPOSALS--PRIORITIES--WORKING GROUPS--TRANSFERS FOR CERTAIN PURPOSES.--

          A. The prosperity and economic resiliency council may:

                (1) request the assistance of any state agency, branch, institution, board, commission, bureau, committee, instrumentality or district of state government or any political subdivision of the state in carrying out its powers and duties; and

                (2) on its own motion, request a state agency to submit an application or join another state agency's application for a proposed project.

          B. The council shall:

                (1) act in the best interest of the state by solving problems of the state swiftly, efficiently and proactively and by responding to crises as they arise;

                (2) adopt rules to implement the Prosperity and Economic Resiliency Act, which rules shall include terms and conditions for applications for funding and inter-fund transfers;

                (3) investigate application proposals and their applicability to and efficacy in solving an identified problem relating to a category of need;

                (4) prioritize projects and inter-fund transfers and, except for crisis funding, certify the approved applications to the legislature;

                (5) encourage applications that propose statewide or regional solutions for identified problems;

                (6) require and assist development of comprehensive statewide planning for prevention and mitigation of natural disasters, including coordinated state and local response and coordination with federal agencies;

                (7) assist in coordinated and sustained state planning for all state capital needs, regardless of eventual funding sources;

                (8) make recommendations to the legislature for appropriations and transfers to existing programmatic funds; and

                (9) make recommendations to the legislature of statutory funds that should be collapsed into the prosperity and economic resiliency program fund subaccounts to increase efficiency and to more effectively address the needs of the state.

          C. State agencies shall submit applications for project funding from the prosperity and economic resiliency program fund on forms provided by the prosperity and economic resiliency council, accompanied by supporting documentation. The council may request additional information from applicants.

          D. Except as otherwise provided in this section, the prosperity and economic resiliency council shall give priority to projects that:

                (1) have been identified as being urgent or in response to a crisis;

                (2) use the administrative and other resources of state agencies and instrumentalities and participating political subdivisions;

                (3) have matching contributions from sources other than the state, including federal funding, grants and in-kind contributions available at the time of application or prospectively;

                (4) have obtained all requisite state and federal permits and authorizations necessary to initiate the project;

                (5) provide statewide or regional solutions; and

                (6) address inflationary limitations faced by agencies.

          E. In response to a crisis identified by the prosperity and economic resiliency council through a unanimous vote of ex-officio members that requires state response, the council shall certify approved applications to the governor and shall provide funding for those applications up to the limits of the applicable subaccount balance to the department of finance and administration for immediate distribution of funds pursuant to Subsections J and K of this section. Operational and capital expenditures in response to a crisis or declared emergency are allowed and are subject to the provisions of Sections 12-11-23 through 12-11-25 and Sections 13-1-127 and 13-1-128 NMSA 1978.

          F. When possible, if federal funding subsequently becomes available to one or more beneficiaries for the same purpose for which funding from one or more subaccounts in the prosperity and economic resiliency program fund was made available to respond to a crisis or emergency, the appropriate subaccounts shall be reimbursed the amount of funding from those subaccounts by the beneficiaries up to the amount received from the federal government.

          G. The prosperity and economic resiliency council shall create a "crisis planning and response team" of state, federal and local experts to plan and coordinate necessary and appropriate responses to statewide, regional or local emergencies. The crisis planning and response team shall provide after-event reports to the council and the legislature, including findings and recommendations.

          H. The prosperity and economic resiliency council may appoint one or more working groups for each category of need. The working groups shall include at least one council member, if feasible. Other members of each working group shall include topical experts, including state and local government personnel and experts from state universities, national laboratories, federal agencies and the private sector. With the approval of the council, a working group may include subgroups that are assigned one or more specific charges and make findings and recommendations to its working group.

          I. Federal agencies and the national laboratories are invited and encouraged to participate in the work of the prosperity and economic resiliency council and its working groups.

          J. Each year, the prosperity and economic resiliency council may distribute:

                (1) to the department of finance and administration, up to two million dollars ($2,000,000) from each applicable subaccount or twenty percent of each applicable subaccount's unencumbered balance, whichever is greater, to respond to state-declared disasters per fiscal year; provided that this distribution is in addition to money appropriated by the legislature for disasters; and provided further that if there is a question about a disaster project or expenditure from a subaccount, the department shall bring the issue to the council for resolution; and further provided that the funding goes to an approved application that responds to the disaster;

                (2) to the department of finance and administration, up to eighty percent of the state assets and capital planning and design subaccount's unencumbered balance for planning and design for capital projects that will be funded by the general fund or severance tax or general obligation bonds of the state or a local government; and

                (3) to the tribal infrastructure board, up to eighty percent of the tribal initiatives subaccount's unencumbered balance to assist tribal governments in meeting match requirements to leverage federal funding related to tribal infrastructure.

          K. Applications approved by the prosperity and economic resiliency council require the financial participation of the applicants of at least fifty percent of the approved project, except that the council by rule may provide a greater state share for critical projects if the state or a political subdivision shows that its available revenue and other available funding sources are not sufficient to provide the state's or political subdivision's fifty percent share of the project cost. The council may distribute to the department of finance and administration up to fifty percent of the unencumbered balances of applicable subaccounts to pay the state share of critical projects approved by the council.

          L. The prosperity and economic resiliency council shall immediately notify the state treasurer and the state board of finance of the council's approval of distributions and projects provided in Subsections J and K of this section. The department of finance and administration shall keep a record of expenditures made from distributions provided in accordance with those subsections and shall report the record to the council and the legislative finance committee. Upon request by the legislative finance committee, an agency that receives a distribution from the prosperity and economic resiliency program fund shall report to the committee the impact to the state of the distribution.

     SECTION 5. [NEW MATERIAL] PROSPERITY AND ECONOMIC RESILIENCY PERMANENT FUND--CREATED--PURPOSES--DISTRIBUTIONS AND TRANSFERS.--

          A. The "prosperity and economic resiliency permanent fund" is created as a nonreverting fund in the state treasury. The fund consists of income from investment of the fund, income from investment of the prosperity and economic resiliency program fund, appropriations, gifts, grants and donations to the fund.

          B. The state investment office shall invest money in the prosperity and economic resiliency permanent fund as other permanent funds are invested.

          C. The state investment officer shall report quarterly to the state investment council and the legislative finance committee on the investments made pursuant to this section. Annually, a report shall be submitted no later than October 1 of each year to the legislative finance committee, the revenue stabilization and tax policy committee and any other appropriate legislative interim committees.

          D. If general fund revenues, including all transfers to the general fund authorized by law, are projected by the governor to be insufficient either to meet the level of appropriations authorized by law from the general fund for the current fiscal year or to meet the level of appropriations made in the general appropriation act for the next fiscal year, and if the balance of the tax stabilization reserve has been appropriated and there is still a projected insufficiency, then up to one billion dollars ($1,000,000,000) of the prosperity and economic resiliency permanent fund may be appropriated by the legislature up to the amount of the projected insufficiency for either or both fiscal years.

          E. On July 1 of 2024 and each year thereafter, a distribution from the prosperity and economic resiliency permanent fund shall be made to the prosperity and economic resiliency program fund of two hundred million dollars ($200,000,000) or five percent of the prior three-year average of the prosperity and economic resiliency permanent fund, whichever is greater. The distribution to the prosperity and economic resiliency program fund shall be divided equally among its subaccounts for fiscal year 2024; thereafter, the legislature shall appropriate the amount in each subaccount that may be used by the prosperity and economic resiliency council in a fiscal year for the intended subaccount purpose.

     SECTION 6. [NEW MATERIAL] PROSPERITY AND ECONOMIC RESILIENCY PROGRAM FUND--CREATED--SUBACCOUNTS.--

          A. The "prosperity and economic resiliency program fund" is created as a nonreverting fund in the state treasury. The fund consists of distributions from the prosperity and economic resiliency permanent fund, appropriations, gifts, grants and donations. The prosperity and economic resiliency program fund shall be divided into subaccounts corresponding to each category of need.

          B. Except for emergency disbursements and distributions pursuant to Subsections J and K of Section 4 of the Prosperity and Economic Resiliency Act, money in each subaccount of the prosperity and economic resiliency program fund is subject to appropriation by the legislature and may be appropriated to state agencies and statutory funds as provided in this section.

          C. Beginning June 30, 2025 and each succeeding June 30, if the unexpended or unencumbered balance remaining in a subaccount exceeds one hundred million dollars ($100,000,000), the surplus shall be transferred to the prosperity and economic resiliency permanent fund.

          D. The "water conservation and delivery subaccount" is created to:

                (1) fund innovations in water conservation, delivery and reuse and protection and preservation of ground, surface and drinking water resources;

                (2) improve the quantity or quality of agricultural, industrial or domestic water;

                (3) improve and maintain public infrastructure related to water, wastewater, nonfederal dams and reservoirs and acequias and community ditches;

                (4) fund state water rights litigation and settlements; and

                (5) provide support for other related water purposes, including addressing statewide, regional and local water-related shortages or crises.

          E. The "environmental, agricultural and climate resiliency subaccount" is created to:

                (1) protect human life, public infrastructure, utilities, wild lands and wildlife from the consequences of drought or other extreme weather events or epidemics;

                (2) plan for and respond to public health emergencies as a result of extreme weather events;

                (3) invest in fire prevention and mitigation strategies and measures to protect the state from the effects of climate change;

                (4) mitigate environmental damage from natural or human causes;

                (5) address agricultural sustainability and innovations;

                (6) improve public infrastructure;

                (7) fund environmental improvements;

                (8) enable the state to adapt to climate change; and

                (9) provide support for other related environmental, agricultural and climate resiliency purposes.

          F. The "energy, science, technology and innovation subaccount" is created to:

                (1) invest in initiatives that develop or strengthen innovation ecosystems, including university research parks, small business development centers and business incubators;

                (2) invest in sustainable and clean energy initiatives, including carbon capture technologies, water savings and reduced energy use initiatives;

                (3) invest in scientific and technological research and development, including aerospace, bioscience, medicine, energy, sustainable food systems and agriculture, intelligent manufacturing, microelectronics, robotics, cybersecurity and digital and industrial technologies;

                (4) support applied research and facilitate knowledge and technology transfers; and

                (5) provide support for other related clean energy, science, technology and innovation purposes.

          G. The "higher education and academic research subaccount" is created to: 

                 (1) fund higher education endowments and other special statutory higher education funds;

                 (2) support academic research;

                 (3) provide higher education undergraduate and graduate scholarships;

                 (4) support high-skill workforce development; and

                 (5) support other related higher education and academic research purposes.

           H. The "physical, mental and behavioral health access and services subaccount" is created to:

                 (1) develop and expand the statewide physical, mental and behavioral health delivery system and fund public capital and programmatic infrastructure to enable the success of that system;

                 (2) invest in the educational and career development pipeline for physical, mental and behavioral health providers;

                 (3) provide services and supports that assist children and adults with intellectual and development disabilities, including funding developmental disabilities waivers; and

                 (4) provide support for other related physical, mental and behavioral health access and services purposes.

           I. The "rural economic development subaccount" is created to:

                 (1) fund state initiatives to help rural and frontier communities attract and retain small businesses and agricultural, commercial and industrial sectors;

                 (2) support initiatives that reduce poverty and hunger in rural and frontier communities;

                 (3) assist counties to prepare for and respond to human-caused and natural crises in rural and frontier communities; and

                 (4) support other related rural economic development purposes.

           J. The "tribal initiatives subaccount" is created to:

                 (1) assist tribal governments in meeting federal match requirements for tribal projects and initiatives wholly within New Mexico and approved by state agencies or by the tribal infrastructure board;

                 (2) fund tribal capital projects approved by the legislature or the tribal infrastructure board;

                 (3) assist Indian nations, tribes and pueblos to prepare for and respond to manmade and natural crises; and

                 (4) support other related tribal initiatives purposes.

           K. The "cultural and creative economy subaccount" is created to:

                 (1) improve and maintain state cultural assets, including museums and monuments;

                 (2) expand recreational opportunities statewide;

                 (3) support culture-related tourism and economic development initiatives;

                 (4) invest in the educational and career development pipeline for the creative industries, including film and television, publishing, fine arts, computer-generated imagery and other digital arts programming and arts trades; and

                 (5) support other related cultural and creative economy purposes.

           L. The "courts and public safety subaccount" is created to:

                 (1) improve and expand court and public safety services;

                 (2) fund court initiatives such as specialty courts and other strategies to improve criminal justice outcomes and reduce recidivism and to reduce docket backlogs in all courts;

                 (3) fund public safety communications technology;

                 (4) support evidence-based, data-driven projects or initiatives that address the complex factors that drive crime and recidivism; and

                 (5) support other related courts and public safety purposes.

           M. The "state assets and capital planning and design subaccount" is created to:

                 (1) improve, maintain and replace state assets;

                 (2) fund planning and design components of capital outlay projects proposed for funding with severance tax or other bonds or funds for capital projects approved through the four-year program of major state capital improvement projects approved by the secretary of general services and the secretary of finance and administration, or by projects approved by the governing bodies of local governments through the local-government-approved infrastructure capital improvement plans submitted to the local government division of the department of finance and administration; and

                 (3) support other related state assets and capital planning and design purposes.

      SECTION 7. TRANSFER--APPROPRIATIONS.--

           A. Eight hundred million dollars ($800,000,000) is transferred from the general fund to the prosperity and economic resiliency permanent fund on July 1, 2023.

           B. Two hundred million dollars ($200,000,000) is appropriated from the general fund to the prosperity and economic resiliency program fund for expenditure in fiscal year 2024 and subsequent fiscal years to carry out the purposes of the Prosperity and Economic Resiliency Act. Money in the prosperity and economic resiliency program fund shall not revert to the general fund.

           C. One million dollars ($1,000,000) is appropriated from the general fund to the department of finance and administration for expenditure in fiscal year 2023 and subsequent fiscal years to cover expenses and contracts to carry out the provisions of the Prosperity and Economic Resiliency Act. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not revert to the general fund.

SECTION 8. EMERGENCY--It is necessary for the public peace, health and safety that this act take effect immediately.

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