SENATE BILL 479

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

INTRODUCED BY

Crystal R. Diamond and William E. Sharer and William F. Burt

AN ACT

RELATING TO THE LEGISLATURE; ENACTING THE CAPITAL OUTLAY REFORM ACT; CREATING THE CAPITAL OUTLAY COUNCIL TO OVERSEE, ADVISE AND PRESCRIBE REQUIREMENTS FOR THE CAPITAL OUTLAY PROCESS; ESTABLISHING REQUIREMENTS FOR CAPITAL OUTLAY FUNDS; CREATING THE CAPITAL OUTLAY OVERSIGHT AUTHORITY TO SERVE THE COUNCIL AND ADMINISTER THE CAPITAL OUTLAY PROCESS; MAKING AN APPROPRIATION.

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 "Capital Outlay Reform Act".

     SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Capital Outlay Reform Act:

          A. "authority" means the capital outlay oversight authority;

          B. "capital funds" means capital outlay funds appropriated by the legislature;

          C. "council" means the capital outlay council; and

          D. "eligible entity" means an entity awarded capital funds by the legislature.

     SECTION 3. [NEW MATERIAL] CAPITAL OUTLAY PROJECTS--GRANT ASSISTANCE--APPLICATION--CRITERIA.--

          A. Applications for capital outlay assistance, approval of applications and prioritization of projects for recommendation to the legislature for funding shall be conducted pursuant to the Capital Outlay Reform Act.

          B. The council shall establish criteria for capital outlay projects to receive capital funds pursuant to the Capital Outlay Reform Act that shall consider:

                (1) the feasibility of using the design, build and financing arrangements;

                (2) the use of alternative, more durable construction materials that may reduce long-term operating costs;

                (3) whether a concept promotes efficient and flexible utilization of space; and

                (4) whether any other financing or construction concept may maximize the dollar effect of the capital funds.

          C. No application for capital funds shall be approved unless the council determines that:

                (1) the project is needed and included in the entity's five-year infrastructure and capital improvement plan among its top three priorities;

                (2) the entity has used any past capital funds in a prudent manner;

                (3) the entity has obtained insurance for buildings involved in projects for which the entity is requesting capital funds;

                (4) the entity has submitted a five-year facilities plan that includes workload projections and a current preventive maintenance plan;

                (5) the entity is willing and able to pay any portion of the total cost of the capital outlay project that is not funded with capital funds;

                (6) the entity has agreed in writing to comply with any reporting requirements or conditions imposed by the state;

                (7) the project reduces health or safety hazards or provides key infrastructure for economic development;

                (8) the project's cost and the amount requested are based on an estimate provided by a qualified professional;

                (9) land, property, easements or rights of way necessary to begin construction have been acquired;

                (10) the requested capital funds can fully fund the project or an operational phase;

                (11) funding for the project cannot be secured from another source; and

                (12) the entity has committed money to the project from a local revenue source.

          D. In order to encourage private capital investment in the construction of public facilities, a capital outlay application for a purchase of a privately owned facility by an entity that currently uses the facility may be eligible for capital funds if the council finds that, in addition to meeting all other criteria and requirements, the facility equals or exceeds the statewide building standards for facilities.

          E. The council shall develop building standards for public facilities and shall promulgate rules as necessary to carry out the provisions of the Capital Outlay Reform Act.

          F. No later than December 15 of each year, the council shall prepare a report summarizing its activities during the previous fiscal year. The report shall describe in detail all projects approved, the progress of projects previously funded but not completed, projects in noncompliance, the criteria used to prioritize funding and other council action. The report shall be submitted to the governor, the department of finance and administration, the legislative finance committee and both houses of the legislature.

     SECTION 4. [NEW MATERIAL] CAPITAL OUTLAY COUNCIL DUTIES--ASSISTANCE AND OVERSIGHT.--The council shall:

          A. assist applicants with identifying critical capital outlay needs and preparing grant applications;

          B. establish criteria for a project to be eligible to receive capital funds;

          C. collect, review and investigate applications for capital funds;

          D. recommend projects for approval;

          E. assist eligible entities with implementing projects, including preparing requests for bids or proposals, contract negotiations and contract implementation;

          F. help eligible entities that are not large enough to maintain their own construction management staff with cost-saving measures and efficiencies;

          G. establish reporting requirements and conditions on capital funds to ensure that grants are expended in a most prudent manner and consistent with the original purpose for which they were made. The council, in order to ensure compliance with the provisions of the Capital Outlay Reform Act, may:

                (1) during normal business hours and with notice, access the premises of a project and review non-privileged documentation relating to a project;

                (2) withhold capital funds available for a project; and

                (3) take over the direct administration of a project if a project is repeatedly in substantial noncompliance with a reporting requirement or condition; and

          H. prescribe the use of standardized construction documents and a standardized process for change orders.

     SECTION 5. [NEW MATERIAL] CAPITAL OUTLAY COUNCIL CREATED--ORGANIZATION--DUTIES.--

          A. The "capital outlay council" is created as an interim body of the legislative branch to oversee, advise and design the capital outlay assistance process and direct the authority in helping to administer it. The council is composed of the:

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

                (2) president pro tempore of the senate or the president pro tempore's designee;

                (3) minority floor leader of the senate or the minority floor leader's designee;

                (4) speaker of the house of representatives or the speaker's designee;

                (5) minority floor leader of the house of representatives or the minority floor leader's designee;

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

                (7) executive director of the New Mexico association of counties or the executive director's designee.

          B. The council shall elect a chair from among the members. The council shall meet at the call of the chair.

          C. Members of the council shall not be compensated, but they shall receive for their service as members of the council per diem and mileage as provided in the Per Diem and Mileage Act.

     SECTION 6. [NEW MATERIAL] CAPITAL OUTLAY OVERSIGHT AUTHORITY--CREATION--POWERS AND DUTIES.--

          A. The "capital outlay oversight authority" is created under the supervision of the council. The authority shall be headed by a director, selected by the council, who shall have at least five years of experience in construction, architecture or project management. The director may hire up to two deputies with the approval of the council and shall employ or contract with such technical and administrative personnel as are necessary to carry out the provisions of this section. The director, deputies and employees of the authority shall be exempt from the provisions of the Personnel Act.

          B. The authority shall:

                (1) serve as staff to the council and execute the tasks and responsibilities assigned by the council;

                (2) provide assistance and oversight of projects required by the Capital Outlay Reform Act;

                (3) assist eligible entities with:

                     (a) developing and implementing five-year facility plans and preventive maintenance plans;

                     (b) procuring architectural and engineering services;

                     (c) managing and overseeing construction activities;

                     (d) training programs; and

                     (e) analyzing and assessing an eligible entity's space utilization options;

                (4) conduct ongoing review of five-year facility plans, preventive maintenance plans and performance;

                (5) ensure that projects are in compliance with applicable state codes or requirements, including building codes;

                (6) have access to the premises of a project and any non-privileged documentation relating to the project and conduct on-site inspections of a project and its related documentation;

                (7) recommend to the council:

                     (a) criteria for capital outlay projects to receive capital funds;

                     (b) standards for prioritizing funding; and

                     (c) building standards and ensure project compliance with building standards adopted by the council; and

                (8) make annual reports to the department of finance and administration, the governor, the legislative education study committee, the legislative finance committee and the legislature.

     SECTION 7. APPROPRIATION.--Two million five hundred thousand dollars ($2,500,000) is appropriated from the general fund to the legislative council service for expenditure in fiscal year 2024 and subsequent fiscal years to carry out the provisions and purpose of the Capital Outlay Reform Act. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not revert to the general fund.

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