Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance

committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

if they are used for other purposes.

Current FIRs (in HTML & Adobe PDF formats) are a vailable on the NM Legislative Website (legis.state.nm.us).

Adobe PDF versions include all attachments, whereas HTML versions may not. Previously issued FIRs and

attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

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

SPONSOR HTRC

ORIGINAL DATE

LAST UPDATED

3/17/07

HB CS/936

SHORT TITLE Capital Outlay Projects

SB

ANALYST Kehoe

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

NFI

NFI

N/A

(See Fiscal Impact

Implications)

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

SUMMARY

Synopsis of HTRC Committee Substitute

The House Taxation and Revenue Committee Substitute for House Bill 936 reauthorizes projects

funded in Laws 2007, Chapter 2 (Senate Bill 710, as amended) and Laws 2007, Chapter 42

(Senate Bill 827, as amended). The bill contains 32 reauthorizations for projects originally

requested by members of the House, Senate and the executive. The bill changes the purpose or

expands the purpose of the original appropriations authorized during the 2007 Session.

SIGNIFICANT ISSUES

The purpose of reauthorization of projects may vary from project to project. A reauthorization of

a previously funded capital outlay project may change the administering agency, change the

purpose of the project, extend the period of expiration of the project, or expand the purpose of

the original project.

FISCAL IMPLICATIONS

The Department of Finance and Administration (DFA), Local Government Division (LGD), is

responsible for the administration, distribution and monitoring of special and capital outlay funds

appropriated by the legislature. The reports generated by LGD are made available to the

Legislature on a quarterly basis, therefore, the exact uncommitted balance for projects or the

CS/House Bill 936/HTRC

– Page

2

reversion dates being reauthorized in this bill is not always known at the time of developing the

reauthorization bill. However, if the funding for projects contained in this bill have been

obligated or reverted, the reauthorizations contained within this bill become null and void.

SIGNIFICANT ISSUES

The LGD supervises capital projects for all state agencies, public schools and higher education

on an electronic capital projects monitoring system. The system provides reports dependent

upon data provided by the state and local government entities. This data is not audited, and is

only reviewed by LGD for “reasonableness". Reports generated by the system provide a control

number, project description, funding source, appropriation amount, expenditures, encumbrances,

uncommitted balances and the percent of the project completed.

The State Board of Finance (BOF) maintains a report by agency reflecting sold, expended and

balances for each project authorized for funding from general obligation and severance tax

bonds. A separate report provides the amount, in aggregate, of unexpended bond proceeds for

each series of bonds.

A direct correlation between the LGD and BOF reports is not practical

due to a number of factors. Bond sales are issued in multiple series and may contain partial

amounts sold in separate issues. The Budget Division monitoring system relies on agency

reported data that is not audited. Also, bond expenditures are made on a reimbursement basis of

actual expenditures, but expenditures reported in the monitoring system may include payments

from other funds that have not been submitted for reimbursement.

The necessity for reauthorizations may include the following:

·

Inadequate funding levels: scope of project exceeds available funding

·

Grantees unable to meet match contingencies

·

Expenditure period is not sufficient for property acquisition such as a right of way

purchase or condemnation proceedings

·

Projects funded for nonprofit or private entities do not meet the state’s anti-donation

requirements

·

Project may not be a priority for the receiving governmental entity or operational funds or

staffing may not be available for the project

·

Lack of planning, communication and oversight among between sponsor of project and

administering agency and receiving entity

·

Grantees lack proper documentation to draw reimbursement for completed projects or do

not draw down reimbursements on a timely basis.

LMK/mt