Committee Substitute for HB0262BIS

HOUSE BUSINESS AND INDUSTRY COMMITTEE SUBSTITUTE FOR

HOUSE BILL 262

48th legislature - STATE OF NEW MEXICO - second session, 2008

AN ACT

RELATING TO ECONOMIC DEVELOPMENT; ENACTING THE NEW MEXICO RESEARCH APPLICATIONS ACT; PROVIDING FOR A NONPROFIT CORPORATION TO INTERACT WITH BUSINESS AND GOVERNMENT ENTITIES, UNIVERSITIES, PRIVATE FOUNDATIONS AND NATIONAL LABORATORIES FOR THE PURPOSE OF FOSTERING ECONOMIC DEVELOPMENT IN THE AREAS OF TECHNOLOGY AND INTELLECTUAL PROPERTY; DECLARING AN EMERGENCY.

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

Section 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 10 of this act may be cited as the "New Mexico Research Applications Act".

Section 2. [NEW MATERIAL] PURPOSES.--The purposes of the New Mexico Research Applications Act are to:

A. promote the public welfare and prosperity of the people of New Mexico;

B. foster economic development in the area of intellectual property within New Mexico;

C. attract investments that will drive technological innovations in New Mexico;

D. create high-value technology jobs in New Mexico with appropriately trained employees to fill such jobs;

E. forge links, critical partnerships and collaboration among New Mexico's business communities, universities, private foundations, national laboratories and government through the development of a research applications center;

F. support educational initiatives in science, technology, engineering and mathematics in the state to ensure the availability of the future workforce required to meet the goals of the New Mexico Research Applications Act; and

G. engage in cooperative ventures related to the use of research and development applications, including the use of research and development applications as a means of enhancing state and local resource development and promoting innovative technological advances in the areas of economic, community and workforce development; education; science; technology; engineering; mathematics; research and development; conservation; and health care, within New Mexico.

Section 3. [NEW MATERIAL] DEFINITIONS.--As used in the New Mexico Research Applications Act:

A. "board" means the board of directors of the research applications center;

B. "department" means the economic development department;

C. "research applications center" means the nonprofit corporation created pursuant to the Nonprofit Corporation Act and the New Mexico Research Applications Act;

D. "technological innovations" includes research, development, prototype assembly, manufacturing, patenting, licensing, marketing and sale of inventions, ideas, practices, applications, processes, machines and technology and related property rights of all kinds; and

E. "university" means:

(1) a New Mexico educational institution named in Article 12, Section 11 of the constitution of New Mexico;

(2) a community college organized pursuant to the Community College Act; or

(3) a technical and vocational institute organized pursuant to the Technical and Vocational Institute Act.

Section 4. [NEW MATERIAL] RESEARCH APPLICATIONS CENTER--FORMATION--BOARD OF DIRECTORS--PUBLIC ACCESS TO MEETINGS AND MINUTES.--

A. The department shall, pursuant to the Nonprofit Corporation Act and internal revenue service regulations pertaining to nonprofit corporations, incorporate a corporation with the name "New Mexico research applications center"; provided that, if that name is not available, the department shall select another name that reflects the purposes of the New Mexico Research Applications Act.

B. The articles of incorporation shall include:

(1) provisions for appointing the board pursuant to Subsection C of this section;

(2) provisions requiring that board vacancies shall be filled by the appropriate appointing authority;

(3) a statement that board members, subject to the availability of funds, will receive per diem and mileage at the rate provided in the Per Diem and Mileage Act for nonsalaried public officers and shall receive no other compensation, perquisite or allowance;

(4) a statement that the corporation will have no members;

(5) provisions that prohibit any board action inconsistent with the New Mexico Research Applications Act;

(6) provisions that prohibit the board from increasing the number of directors;

(7) a plan of distribution of the assets remaining after dissolution or final liquidation of the corporation. The plan shall require that, after all liabilities and obligations are paid, all funds of the corporation shall be deposited in the general fund and all other assets shall be distributed to the department of finance and administration; and

(8) any other provisions deemed necessary by the department to ensure compliance with the New Mexico Research Applications Act.

C. The board of directors shall be appointed in a manner that reflects the geographic, cultural and ethnic diversity of this state. The board shall consist of thirteen members with relevant experience or expertise in state government, local governments, businesses located in New Mexico, universities, private foundations, national laboratories or investments. The members shall be appointed as follows:

(1) the governor shall appoint seven members, one of whom shall, with the advice and consent of the senate, be designated by the governor as the chair of the board; and

(2) six members shall be appointed by the legislature as follows:

(a) two members appointed by the speaker of the house of representatives;

(b) two members appointed by the president pro tempore of the senate;

(d) one member appointed by the minority leader of the senate.

D. Members shall be appointed for terms of four years except that, of the initial appointees, three members appointed by the governor, one member appointed by the speaker of the house of representatives, one member appointed by the president pro tempore of the senate and the member appointed by the minority leader of the house of representatives shall be appointed for terms of two years.

E. Board members may designate an alternate to represent their interest, if approved by the appointing authority.

F. All meetings, minutes of meetings and reports of the board, the research applications center and any corporations formed by the research applications center shall be available and open to the public, except that portion of meetings, minutes or reports in which business-sensitive information, as determined by the board, is discussed. Minutes of all meetings and reports of the research applications center and any corporations formed by the research applications center shall be provided by the board to the legislative finance committee and any other interim or standing legislative committees specified by the legislative finance committee within one month of the date of the meeting or date of the report.

Section 5. [NEW MATERIAL] RESEARCH APPLICATIONS CENTER--POWERS.--As directed by the board, the research applications center may:

A. acquire, by lease or purchase, the land, buildings, facilities, improvements and equipment necessary to achieve the purposes of the New Mexico Research Applications Act;

B. lease to any person any part or all of the land, buildings, facilities, improvements and equipment acquired pursuant to Subsection A of this section;

C. enter into contracts, joint powers agreements, memoranda of understanding and other agreements with public and private entities in order to carry out the purposes of the New Mexico Research Applications Act;

D. enter into business arrangements for technological innovations with one or more business entities, governmental entities, universities, private foundations, national laboratories or other persons;

E. otherwise conduct, sponsor, finance and contract as necessary to further technological innovations;

F. purchase, take, receive or otherwise acquire; own; hold; dispose of; use; or otherwise deal in and with property, including an interest in or ownership of intangible personal property, intellectual property or technological innovations;

G. sell, convey, pledge, exchange, transfer or otherwise dispose of its assets and properties for consideration upon terms and conditions that the board shall determine;

H. receive and administer grants, contracts and private gifts;

I. invest and reinvest its funds;

J. employ officers and employees that it deems necessary, set their compensation and prescribe their duties;

K. enter into agreements with insurance carriers to insure against any loss in connection with its operations;

L. authorize retirement programs and other benefits for salaried officers and employees; and

M. enter into license agreements and contracts involving intellectual property and technological innovations, including agreements for patents, copyrights, franchises and trademarks.

Section 6. [NEW MATERIAL] APPLICABILITY OF OTHER LAWS.--

A. Except as otherwise provided in the New Mexico Research Applications Act, the research applications center shall not be deemed to be the state, or one of its agencies, instrumentalities, institutions or political subdivisions for the purpose of applying any other laws, including those relating to personnel, procurement of goods and services, meetings of the board, gross receipts taxes, disposition or acquisition of property, capital outlays, per diem and mileage and inspection of records.

B. The research applications center shall be deemed:

(1) an agency of the state when applying laws relating to the furnishing of goods and services by the research applications center to the state or any other agency, political subdivision or institution of the state; and

(2) a governmental entity for purposes of the Tort Claims Act, provided that the research applications center may enter into agreements with insurance carriers to insure against risk in connection with its operations even though the risk may be included among the risks covered by the Tort Claims Act.

Section 7. [NEW MATERIAL] ANNUAL AUDIT AND REPORT.--

A. The board shall contract annually with an independent certified public accountant, approved by the state auditor, to perform an examination and audit of the accounts and books of the research applications center, including its receipts, disbursements, contracts, leases, sinking funds, investments and any other records and papers relating to its financial standing. The certified public accountant shall make a determination as to whether the research applications center has complied with the provisions of the New Mexico Research Applications Act. The person performing the audit shall furnish copies of the audit report to the governor; the public regulation commission, where they shall be placed on file and made available for inspection by the general public; and the legislative finance committee.

B. An annual report of the activities during the previous fiscal year of the research applications center shall be provided by the board to the legislative finance committee at least ninety days in advance of each regular legislative session. The legislative finance committee shall forward any report submitted to any interim or standing legislative committees as deemed appropriate. Upon request of the appropriate committee, the board or the board of directors of any corporation formed by the research applications center shall appear before any interim or standing legislative committee to provide an accounting of all activities.

Section 8. [NEW MATERIAL] CONFLICTS OF INTEREST.--

A. If any director, officer or employee of the research applications center is interested either directly or indirectly or is an officer or employee of or has any ownership interest in a legal entity interested directly or indirectly in a contract or potential contract with the research applications center, except for any agency, instrumentality, institution or political subdivision of the state, the interest shall be disclosed to the board and shall be set forth in the minutes of the board. The director, officer or employee having the interest shall not participate on behalf of the research applications center in the authorization of the contract.

B. No director, officer or employee of the research applications center or state officer shall accept any gratuities in connection with the issuance of bonds under the New Mexico Research Applications Act, nor shall any such individual be reimbursed for expenses incident to the issuing of bonds except such expenses as are reimbursed as provided under the rules of the board.

C. Nothing in this section shall prohibit an officer, director or employee of a financial institution from participating as a member of the board in setting general policies of the research applications center, nor shall any provision of this section be construed as prohibiting a financial institution of New Mexico from making loans guaranteed pursuant to the provisions of the New Mexico Research Applications Act because an officer, director or employee of the financial institution serves as a member of the board.

D. A person who violates the provisions of this section is guilty of a misdemeanor and, upon conviction, shall be punished pursuant to Section 31-19-1 NMSA 1978.

Section 9. [NEW MATERIAL] CONTRACTS INVOLVING PUBLIC EMPLOYEES.--Except as provided in Section 10 of the New Mexico Research Applications Act, the research applications center shall not enter into any contract involving services or property of a value in excess of twenty thousand dollars ($20,000) with an employee of the state or one of its agencies, instrumentalities, institutions or political subdivisions or with a business in which the employee has a controlling interest unless the governor or the governor's designee makes a determination, in writing, that the employee is able to provide services that are not readily available from another person or is able to provide services that are less expensive or of higher quality than are otherwise available.

Section 10. [NEW MATERIAL] TRANSFER OF TECHNOLOGY.--

A. Notwithstanding the provisions of Section 9 of the New Mexico Research Applications Act, Section 10-16-7,

13-1-190, 21-1-17 or 21-1-35 NMSA 1978 or of any other statute, ordinance or policy regulating the conduct of public employees, an officer or employee of the state or one of its agencies, instrumentalities, institutions or political subdivisions may, subject to Subsection B of this section, apply to the secretary of economic development for permission to establish and maintain a substantial interest in a private entity that provides or receives equipment, material, supplies or services in connection with the research applications center in order to facilitate the transfer of technology developed by the officer or employee from the research applications center to commercial and industrial enterprises for economic development.

B. The secretary of economic development may grant the permission only if all of the following conditions are met:

(1) the employer of the officer or employee certifies to the secretary that the employer does not object to the proposed relationship;

(2) the officer or employee provides a detailed description of the officer's or employee's interest in the private entity;

(3) the nature of the proposed undertaking is fully described;

(4) the officer or employee demonstrates, to the satisfaction of the secretary, that the proposed undertaking may benefit the economy of this state;

(5) the officer or employee demonstrates to the satisfaction of the secretary that the proposed undertaking will not adversely affect research, public service or instructional activities at any educational institution; and

(6) the officer's or employee's interest in the private entity or benefit from the interest will not adversely affect any substantial state interest.

C. The board may establish policies for the implementation of this section.

Section 11. Section 10-16-7 NMSA 1978 (being Laws 1967, Chapter 306, Section 7, as amended) is amended to read:

"10-16-7. CONTRACTS INVOLVING PUBLIC OFFICERS OR EMPLOYEES.--A state agency shall not enter into a contract for services, construction or items of tangible personal property with a public officer or employee of the state, with the family of the public officer or employee or with a business in which the public officer or employee or the family of the public officer or employee has a substantial interest unless the public officer or employee has disclosed the public officer's or employee's substantial interest and unless the contract is awarded pursuant to the Procurement Code, except that the potential contractor shall not be eligible for a sole source or small purchase contract; provided that this section does not apply to a contract of official employment with the state or to contracts made pursuant to the provisions of the University Research Park and Economic Development Act or the New Mexico Research Applications Act. A person negotiating or executing a contract on behalf of a state agency shall exercise due diligence to ensure compliance with the provisions of this section."

Section 12. Section 13-1-190 NMSA 1978 (being Laws 1984, Chapter 65, Section 163, as amended) is amended to read:

"13-1-190. UNLAWFUL EMPLOYEE PARTICIPATION PROHIBITED.--

A. Except as permitted by the University Research Park and Economic Development Act or the New Mexico Research Applications Act, it is unlawful for any state agency or local public body employee, as defined in the Procurement Code, to participate directly or indirectly in a procurement when the employee knows that the employee or any member of the employee's immediate family has a financial interest in the business seeking or obtaining a contract.

B. An employee or any member of an employee's immediate family who holds a financial interest in a disclosed blind trust shall not be deemed to have a financial interest with regard to matters pertaining to that trust."

Section 13. Section 21-1-17 NMSA 1978 (being Laws 1889, Chapter 138, Section 68, as amended) is amended to read:

"21-1-17. INTEREST IN CONTRACTS BY BOARD MEMBERS OR EMPLOYEES PROHIBITED.--No employee or member of a board of regents of [any] a state educational institution shall have [any] direct or indirect financial interest in any contract for building or improving any of that state educational institution or for the furnishing of supplies or services to that institution except as permitted pursuant to the University Research Park and Economic Development Act or the New Mexico Research Applications Act, or unless it complies with provisions of the Governmental Conduct Act and the Procurement Code."

Section 14. Section 21-1-35 NMSA 1978 (being Laws 1923, Chapter 148, Section 1415, as amended) is amended to read:

"21-1-35. SALES BY BOARDS, OFFICERS OR EMPLOYEES PROHIBITED--PARTIES TO CONTRACTS RECEIVING COMMISSION OR PROFIT--PENALTY.--No board of regents of a state educational institution, no member of a board and no school official or teacher, either directly or indirectly, shall sell to [any] a state educational institution that [he] the person is connected with by reason of being a member of a board of regents of a state educational institution or to [any] a school official or teacher, any school books, school furniture, equipment, apparatus or any other kind of school supplies, sell property insurance or life insurance to [any] an employee of that state educational institution or do any work under contract, nor shall any such board or members thereof or school officers or teachers receive any commission or profit on account thereof, and all such persons are prohibited from being parties directly or indirectly to any such contract or transaction; provided that the provisions of this section shall not apply to contracts that are entered into pursuant to the provisions of the University Research Park and Economic Development Act or the New Mexico Research Applications Act or that comply with provisions of the Governmental Conduct Act and the Procurement Code. Any person violating the provisions of this section shall be fined not exceeding one thousand dollars ($1,000) or imprisoned not exceeding one year in the penitentiary of New Mexico or be fined and imprisoned as set forth in this section in the discretion of the court."

Section 15. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.

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