SENATE BILL 372
54th legislature - STATE OF NEW MEXICO - first session, 2019
INTRODUCED BY
Sander Rue
AN ACT
RELATING TO PROCUREMENT; ENACTING THE PUBLIC CONTRACTS ETHICS ACT; CREATING A PUBLIC CONTRACTS ETHICS ADVISORY OPINION COMMITTEE; ENACTING PENALTIES; REPEALING AND ENACTING SECTIONS OF THE NMSA 1978.
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 "Public Contracts Ethics Act".
SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Public Contracts Ethics Act:
A. "assisted in the transaction" means any assistance, aid or advice given, including personal or any other form of representation;
B. "direct or indirect participation" means involvement through decision, approval, disapproval, recommendation, formulation of any part of a purchase request, influencing the content of any specification, investigation, auditing or the rendering of advice;
C. "local public body" means every political subdivision of the state and the agencies, instrumentalities and institutions thereof, including two-year post-secondary educational institutions, school districts and local school boards and municipalities except as exempted pursuant to the Procurement Code;
D. "official act" means an action of a public officer or employee in an administrative capacity pertaining to the procurement process;
E. "public contract" means any valid and binding written agreement entered into by a state agency or local public body, but not including a collective bargaining agreement;
F. "public officer or employee" means any elected or appointed official or employee of a state agency or local public body who receives compensation in the form of salary or is eligible for per diem or mileage but excludes legislators; and
G. "state agency" means any department, commission, council, board, committee, institution, legislative body, agency, government corporation, educational institution or official of the executive, legislative or judicial branch of the government of this state. "State agency" includes the purchasing division of the general services department and the state purchasing agent but does not include local public bodies.
SECTION 3. [NEW MATERIAL] CONFIDENTIAL INFORMATION.--It is unlawful for any public officer or employee or former public officer or employee to knowingly use confidential information for actual or anticipated personal gain or for another's actual or anticipated personal gain.
SECTION 4. [NEW MATERIAL] PROHIBITED COMPETITIVE SEALED BIDS OR COMPETITIVE SEALED PROPOSALS.--
A. No state agency or local public body shall accept a competitive sealed bid or competitive sealed proposal from a person who directly or indirectly participated in the preparation of the specifications, qualifications or evaluation criteria on which the specific bid or proposal was based.
B. A public officer or employee accepting a bid or proposal on behalf of a state agency or local public body shall exercise due diligence to ensure compliance with this section.
SECTION 5. [NEW MATERIAL] CONTRACTS INVOLVING PUBLIC OFFICERS OR EMPLOYEES--WAIVERS FROM CONTEMPORANEOUS EMPLOYMENT AND UNLAWFUL EMPLOYEE PARTICIPATION PERMITTED.--
A. A state agency shall not enter into a contract 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 through public notice the public officer's or employee's substantial interest and unless the contract is awarded pursuant to a competitive process; provided that this subsection does not apply to a contract of official employment with the state. 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 subsection.
B. A local public body shall not enter into a contract with a public officer or employee of that local public body, 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 a public officer or employee has disclosed the public officer's or employee's substantial interest through public notice and unless a contract is awarded pursuant to a competitive process.
C. Subsection B of this section does not apply to a contract of official employment with a local public body. A person negotiating or executing a contract on behalf of a local public body shall exercise due diligence to ensure compliance with the provisions of this section.
D. A state agency or a local public body may grant a waiver from unlawful employee participation pursuant to Section 9 of the Public Contracts Ethics Act, or contemporaneous employment pursuant to Section 11 of the Public Contracts Ethics Act, upon making a determination that:
(1) the contemporaneous employment or financial interest of the employee has been publicly disclosed;
(2) the employee will be able to perform the employee's procurement functions without actual or apparent bias or favoritism; and
(3) the employee participation is in the best interests of the state agency or a local public body.
E. The obligation to give public notice required pursuant to Subsections A and B of this section shall be satisfied by posting the required disclosure in a prominent place on the web page of the state purchasing agent.
SECTION 6. [NEW MATERIAL] CONTRACTS INVOLVING FORMER PUBLIC OFFICERS OR EMPLOYEES.--
A. A state agency shall not enter into a contract with, or take any action favorably affecting, any person or business that is assisted in the transaction by a former public officer or employee of the state whose official act, while in state employment, involved a decision, approval, disapproval, recommendation, formulation of any part of a purchase request, influencing the content of any specification, investigation, auditing or the rendering of advice regarding the agency's initial procurement of the contract or taking that action.
B. A former public officer or employee shall not represent a person in the person's dealings with the government on a matter in which the former public officer or employee participated personally and substantially while a public officer or employee.
C. A local public body shall not enter into a contract with, or take any action favorably affecting, any person or business that is assisted in the transaction by a former public officer or employee of that local public body whose official act, while in employment with that local public body, involved a decision, approval, disapproval, recommendation, formulation of any part of a purchase request, influencing the content of any specification, investigation, auditing or the rendering of advice regarding the local public body's initial procurement of the contract or taking that action.
D. The provisions of Subsections A through C of this section shall cease to apply two years after the former public officer or employee has left public office.
E. For a period of one year after leaving government service or employment, a former public officer or employee shall not represent for pay a person before the state agency or local public body at which the former public officer or employee served or worked.
SECTION 7. [NEW MATERIAL] CONTRACTS INVOLVING LEGISLATORS.--
A. A state agency shall not enter into a contract for services, construction or items of tangible personal property with a legislator, the legislator's family or with a business in which the legislator or the legislator's family has a substantial interest unless the legislator has disclosed the legislator's substantial interest and unless the contract is awarded in accordance with the provisions of the Procurement Code and the Public Contracts Ethics Act, except the potential contractor shall not be eligible for a sole source or small purchase contract. 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 subsection.
B. A legislator shall not appear for, represent or assist another person in a matter before a state agency, unless without compensation or for the benefit of a constituent, except for legislators who are attorneys or other professional persons engaged in the conduct of their professions and, in those instances, the legislator shall refrain from references to the legislator's legislative capacity except as to matters of scheduling, from communications on legislative stationery and from threats or implications relating to legislative actions.
SECTION 8. [NEW MATERIAL] PROHIBITED CONTRIBUTIONS AND DISCLOSURE.--
A. A business that contracts with a state agency or local public body to provide financial services involving the investment of public money or issuance of bonds for public projects shall not knowingly contribute anything of value to a public officer or employee of that state agency or local public body who has authority over the investment of public money or issuance of bonds, the revenue of which is used for public projects in the state.
B. A public officer or employee of a state agency or local public body who has authority over the investment of public money or issuance of bonds, the revenue of which is used for public projects in the state, shall not knowingly accept a contribution of anything of value from a business that contracts with that state agency or local public body to provide financial services involving the investment of public money or issuance of bonds for public projects.
C. A prospective contractor with the state or a local public body shall disclose all campaign contributions given by the prospective contractor or a family member or representative of the prospective contractor to an applicable public officer of the state or a local public body during the two years prior to the date on which a proposal is submitted or, in the case of a sole source or small purchase contract, the two years prior to the date on which the contractor signs the contract, if the aggregate total of contributions given by the prospective contractor or a family member or representative of the prospective contractor to the public officer exceeds two hundred fifty dollars ($250) over the two-year period.
D. The disclosure shall indicate the date, the amount, the nature and the purpose of the contribution. The disclosure statement shall be on a form developed and made available electronically by the department of finance and administration to all state agencies and local public bodies. The state agency or local public body that procures the services or items of tangible personal property shall indicate on the form the name or names of every applicable public officer, if any, for which disclosure is required by a prospective contractor for each competitive sealed proposal, sole source or small purchase contract. The form shall be filed with the state agency or local public body as part of the competitive sealed proposal, or in the case of a sole source or small purchase contract, on the date on which the contractor signs the contract.
E. A prospective contractor submitting a disclosure statement pursuant to this section who has not contributed to an applicable public official, whose family members have not contributed to an applicable public official or whose representatives have not contributed to an applicable public official shall make a statement that no contribution was made.
F. A prospective contractor or a family member or
representative of the prospective contractor shall not give a campaign contribution or other thing of value to an applicable public official or the applicable public official's employees during the pendency of the procurement process or during the pendency of negotiations for a sole source or small purchase contract.
G. A solicitation or proposed award for a proposed contract may be canceled pursuant to Section 13-1-181 NMSA 1978 or a contract that is executed may be ratified or terminated pursuant to Section 13-1-182 NMSA 1978 if:
(1) a prospective contractor fails to submit a fully completed disclosure statement pursuant to this section; or
(2) a prospective contractor or family member or representative of the prospective contractor gives a campaign contribution or other thing of value to an applicable public official or the applicable public official's employees during the pendency of the procurement process.
H. As used in this section:
(1) "anything of value" means any money, property, service, loan or promise, but does not include food and refreshments with a value of less than one hundred dollars ($100) consumed in a day;
(2) "applicable public official" means a person elected to an office or a person appointed to complete a term of an elected office, who has the authority to award or influence the award of the contract for which the prospective contractor is submitting a competitive sealed proposal or who has the authority to negotiate a sole source or small purchase contract that may be awarded without submission of a sealed competitive proposal;
(3) "contribution" means a donation or transfer to a recipient for the personal use of the recipient, without commensurate consideration, except that "campaign contribution" means a donation given for a campaign for elective office of a public official;
(4) "family member" means a spouse, father, mother, child, father-in-law, mother-in-law, daughter-in-law or son-in-law of:
(a) a prospective contractor, if the prospective contractor is a natural person; or
(b) an owner of a prospective contractor;
(5) "pendency of the procurement process" means 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;
(6) "prospective contractor" means a person or business that is subject to the competitive sealed proposal process set forth in the Procurement Code or is not required to submit a competitive sealed proposal because that person or business qualifies for a sole source or small purchase contract; and
(7) "representative of the prospective contractor" means an officer or director of a corporation, a member or manager of a limited liability corporation, a partner of a partnership or a trustee of a trust of the prospective contractor.
SECTION 9. [NEW MATERIAL] 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 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 10. [NEW MATERIAL] CONTINGENT FEES PROHIBITED.--It is unlawful for a person or business to be retained or for a business to retain a person or business to solicit or secure a contract upon an agreement or understanding that the compensation is contingent upon the award of the contract, except for retention of bona fide employees or bona fide established commercial selling agencies for the purpose of securing business and persons or businesses employed by a local public body that are providing professional services to the local public body in anticipation of the receipt of federal or state grants or loans.
SECTION 11. [NEW MATERIAL] CONTEMPORANEOUS EMPLOYMENT PROHIBITED.--It is unlawful for a state agency or local public body employee who is participating directly or indirectly in the procurement process to become or to be, while such an employee, the employee of any person or business contracting with the governmental body by whom the employee is employed.
SECTION 12. [NEW MATERIAL] PUBLIC CONTRACTS ETHICS ADVISORY OPINION COMMITTEE CREATED.--
A. The "public contracts ethics advisory opinion committee" is created within the office of the attorney general. The committee consists of three members appointed by the attorney general and two members appointed by the governor. The committee may issue advisory opinions to public officers and employees in accordance with the Public Contracts Ethics Act. The committee shall compile, index, maintain and provide public access to all advisory opinions required to be made public pursuant to state law. The office of the attorney general shall establish a procedure under which advisory opinions may be requested.
B. The attorney general shall advise and seek to educate all persons required to perform duties under the Public Contracts Ethics Act of those duties. This includes advising all those persons at least annually of that act's ethical principles.
C. Complaints concerning an alleged violation of the Public Contracts Ethics Act shall be filed with the involved state agency or local public body, and such complaints shall be forwarded to the office of the attorney general or the state ethics commission for review and any necessary investigation.
D. The attorney general shall seek first to ensure voluntary compliance with the provisions of the Public Contracts Ethics Act. A person who violates that act unintentionally or for good cause shall be given ten days' notice to correct the matter. Referrals for civil enforcement of that act shall be pursued only after efforts to secure voluntary compliance with that act have failed.
SECTION 13. [NEW MATERIAL] CIVIL PENALTIES.--
A. If the attorney general reasonably believes that a person committed, or is about to commit, a violation of the Public Contracts Ethics Act, the attorney general shall enforce the act or refer the matter to a district attorney for enforcement.
B. The attorney general or a district attorney may institute a civil action in district court if a violation has occurred or to prevent a violation of any provision of the Public Contracts Ethics Act. Relief may include a permanent or temporary injunction, a restraining order or any other appropriate order, including an order for a civil penalty of two hundred fifty dollars ($250) for each violation, not to exceed five thousand dollars ($5,000).
C. Any person, firm or corporation that knowingly violates any provision of the Public Contracts Ethics Act is subject to a civil penalty of not more than one thousand dollars ($1,000) for each procurement in violation of any provision of the Public Contracts Ethics Act. The attorney general or the district attorney in the jurisdiction in which the violation occurs may bring a civil action for the enforcement of any provision of the Public Contract Ethics Act. D. An amount equal to the value of anything transferred or received in violation of the provisions of the Public Contracts Ethics Act by a transferor and transferee may be imposed as a civil penalty upon both the transferor and transferee. The civil penalty provided for in this section is imposed in addition but pursuant to the terms and conditions of Subsection C of this section.
SECTION 14. [NEW MATERIAL] CRIMINAL PENALTIES.--Unless specified otherwise in the Public Contracts Ethics Act, any person who knowingly and willfully violates any of the provisions of that act is guilty of a fourth degree felony and upon conviction shall be sentenced pursuant to the provisions of Section 31-18-15 NMSA 1978. Nothing in the Public Contracts Ethics Act shall preclude criminal prosecution for bribery or other provisions of law set forth in the constitution of New Mexico or by statute.
SECTION 15. [NEW MATERIAL] COMPLAINTS--STATE ETHICS COMMISSION.--Any complaints filed with a state agency or local public body concerning an alleged violation of the Public Contracts Ethics Act may be forwarded to the state ethics commission for review and any necessary investigation. The state ethics commission may issue an advisory opinion regarding the matters presented by the complaint or may refer the complaint to the office of the attorney general for review and any necessary investigation.
SECTION 16. REPEAL.--Sections 10-16-6 through 10-16-9, 10-16-13, 10-16-13.3, 13-1-190 and 13-1-191.1 through 13-1-195 NMSA 1978 (being Laws 1967, Chapter 306, Sections 6 through 9 and 13, Laws 2007, Chapter 362, Section 11, Laws 1984, Chapter 65, Section 163, Laws 2006, Chapter 81, Section 1 and Laws 1984, Chapter 65, Sections 165 through 168, as amended) are repealed.
SECTION 17. EFFECTIVE DATE.--
A. The effective date of the provisions of Sections 1 through 14 and 16 of this act is July 1, 2019.
B. The effective date of the provisions of Section 15 of this act is the effective date of enabling legislation enacted to implement the provisions of Article 5, Section 17 of the constitution of New Mexico establishing a state ethics commission.
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