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F I S C A L I M P A C T R E P O R T

SPONSOR Feldman

ORIGINAL DATE

LAST UPDATED

2/5/06

2/14/06 HB

SHORT TITLE Contributions by Procurement Contractors SB 344/aSRC/aSPAC/aSFl#1/aSFl#2/aHBIC

ANALYST Medina

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to the Procurement Code

SOURCES OF INFORMATION

LFC Files

Responses Received From

General Services Department (GSD)

Administrative Office of the District Attorneys (AODA)

Public Education Department (PED)

Corrections Department (NMCD)

Environment Department (NMED)

No Response Received From

Attorney General (AGO)

SUMMARY

Synopsis of HBIC Amendments

The amendments adopted by the House Business and Industry Committee strike Senate Rules

Committee Amendment 4 and Senate Floor Amendments 1 and 2. The HBIC amendments also

add language stipulating that contributions given by the prospective contractor or a family mem-

ber or a representative of the prospective contractor are covered by the provisions of the act.

This reference is inserted in all the applicable section of the bill, thus requiring that all campaign

contributions made by these individuals be reported.

The HBIC amendments provide that that an executed contract shall be void if:

1.

A prospective contractor fails to submit a fully completed disclosure statement pursu-

Senate Bill 344/aSRC/aSPAC/aSFl#1/aSFl#2/aHBIC – Page

2

ant to the provisions of the bill;

2.

a prospective contractor or family member of representative of the prospective con-

tractor gives a campaign contribution.

The HBIC amendments define the following terms:

“family members” are spouse, father, mother, father-in-law, mother-in-law, daughter-in-law

or son-in-law;

“pendency of the procurement process” means the time period commencing with the public

notice of the for proposals and ending with the award of the contract of the cancellation of

the request for proposals, and

“representative of the prospective contractor” means and officer or director of the corpora-

tion, a member or manager of a limited liability corporation, a partner of a partnership or a

trustee of a trust of the prospective contractor.

Synopsis of SFl Amendment #2

Senate Floor Amendment #2 to Senate Bill 344, as amended, refines the definition of a prospec-

tive contractor to include the employees, family members or agent of the prospective contractor.

Synopsis of SFl Amendment #1

Senate Floor Amendment #1 to Senate Bill 344, as amended, requires appointees to the State

Board of Finance to disclose campaign contribution information. Appointees are required to dis-

close all campaign contributions made to a political candidate in the five years prior to the date

on which his or her appointment is announced, all federal and state tax liens filed against the ap-

pointee in the ten years prior to the date on which his or her appointment is announced, and all

lawsuits and judgments filed against the appointee during the ten years prior to the date on which

the appointment is announced.

Synopsis of SPAC Amendment

Senate Public Affairs Committee Amendment to Senate Bill 344 as amended strikes the emer-

gency clause.

Synopsis of SRC Amendment

Senate Rules Committee Amendment to Senate Bill 344 changes the prohibition that a campaign

contribution or other thing of value be given by a potential contractor to an applicable public of-

ficial to a prohibition of the same by a prospective contractor to an applicable public official. The

amendment clarifies that this prohibition applies to the period during the pendency of the pro-

curement process or to the period during the pendency of negotiations for a sole source or small

purchase contract. The amendment also defines “pendency of the procurement process” as: the

time period commencing with the public notice of the request for proposals and ending with the

award of the contract or the cancellation of the request for proposals. Finally, the amendment

strikes the emergency clause from the original bill.

Senate Bill 344/aSRC/aSPAC/aSFl#1/aSFl#2/aHBIC – Page

3

Synopsis of Original Bill

Senate Bill 344 amends the Procurement Code (Section 13-1-1 through 13-1-172 NMSA 1978)

with new language requiring prospective contractors with the state or local public bodies to dis-

close all campaign contributions over two hundred fifty dollars ($250.00) made to applicable

state and local public officials during the two years prior to either submitting a competitive

sealed proposal or, in the case of a sole source or small purchase contract, during the two years

prior to entering into a contract with the state.

The bill further prohibits prospective contractors to make a campaign contribution or give any

other thing of value to an applicable state or local official during the “pendency” of the procure-

ment process, including during the negotiations of the procurement process. This bill carries and

emergency clause.

SIGNIFICANT ISSUES

While the bill does include a provision canceling or voiding contracts if a prospective contractor

fails to submit a fully completed disclosure statement or make a campaign contribution or other

thing of value to an applicable public official during the “pendency” of the procurement process,

this bill does not prescribe penalty or enforcement provisions for violating the prohibition on

making a campaign contribution of over two hundred fifty dollars ($250.00) within a two year

period prior to submitting a sealed proposal for a contract award.

A number of key terms are not clearly defined by the bill including: “campaign contribution”,

“pendency of the procurement process”, “applicable public official”

CONFLICT

Senate Bill 23, while it relates specifically to investment agencies and public officials in invest-

ment agencies, would make it a fourth degree felony for any “state agent” or candidate for state

office to knowingly solicit or accept anything of value (excluding the cost of refreshments up to

$25 per day or refreshments at a public receptions or other public social function that are avail-

able to all guests equally) from an “investment agent” doing business with a state agent.

ALTERNATIVES

Enforcement provisions requiring that a state contract with a contractor who violates the provi-

sions of the bill be canceled or voided. Also, penalties for violation of the provisions of the bill

should be prescribed.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

Current campaign disclosure laws will continue to identify campaign contributions given by pro-

spective contractors to elected officials.

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