0001| SENATE BILL 1139 | 0002| 43rd legislature - STATE OF NEW MEXICO - first session, 1997 | 0003| INTRODUCED BY | 0004| ROMAN M. MAES III | 0005| | 0006| | 0007| | 0008| | 0009| | 0010| AN ACT | 0011| RELATING TO UNFAIR COMPETITION; ENACTING THE UNFAIR COMPETITION | 0012| ACT. | 0013| | 0014| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0015| Section 1. SHORT TITLE.--This act may be cited as the | 0016| "Unfair Competition Act". | 0017| Section 2. LEGISLATIVE FINDINGS AND PURPOSE.--The | 0018| legislature finds that the growth of private enterprise is | 0019| essential to the health, welfare and prosperity of the people | 0020| of New Mexico, and that government and educational institutions | 0021| compete with the private sector when those institutions provide | 0022| certain goods and services to the public. Recognizing this | 0023| problem, it is the intent of the legislature and the purpose of | 0024| the Unfair Competition Act to provide additional economic | 0025| opportunities to private industry and to regulate competition | 0001| by government agencies and educational institutions. The | 0002| legislature intends that, with limited exceptions, if | 0003| government agencies and educational institutions engage in | 0004| sales of goods or services at retail, such sales shall not be | 0005| for less than the costs that would be borne by persons making | 0006| similar sales in the private sector. It is the further intent | 0007| of the legislature to allow a remedy to those in the private | 0008| sector adversely affected or disadvantaged by competition from | 0009| government, educational institutions or nonprofit | 0010| organizations. | 0011| Section 3. DEFINITIONS.--As used in the Unfair | 0012| Competition Act: | 0013| A. "commercial activity" means a government | 0014| agency's, educational institutions's or nonprofit | 0015| organization's performing services or providing goods, | 0016| including manufacturing, processing, managing, selling or | 0017| offering for sale, renting, leasing, delivering, dispensing, | 0018| distributing or advertising, in whole or in part, goods or | 0019| services to the public that are also offered by private | 0020| enterprise; | 0021| B. "competitive impact statement" means a cost | 0022| analysis using uniform accounting standards to determine the | 0023| total cost of the commercial activity. The cost analysis shall | 0024| include a comparison of the impact of the commercial activity | 0025| on state and local tax revenues. The private enterprise cost | 0001| figures in the cost analysis shall be determined by obtaining | 0002| one or more bids for performing or providing the commercial | 0003| activity; | 0004| C. "educational institution" means a public post- | 0005| secondary educational institution; | 0006| D. "government agency" means a branch, department, | 0007| authority, board, commission, institution, board or other | 0008| agency of the state or any of its political subdivisions; | 0009| E. "invited guest" means a person who enters onto a | 0010| campus of an educational institution for an educational, | 0011| research or public service activity and not primarily to | 0012| purchase or receive goods and services not related to the | 0013| educational, research or public service activity; | 0014| F. "nonprofit organization" means an organization | 0015| that is incorporated under the provisions of the Nonprofit | 0016| Corporation Act and that has been granted a tax exemption by | 0017| the internal revenue service; | 0018| G. "person" means an individual, firm, corporation, | 0019| partnership, joint venture or similar business; | 0020| H. "private enterprise" means a person engaging in | 0021| the manufacturing, processing, sale, offering for sale, rental, | 0022| leasing, delivery, dispensing, distributing or advertising of | 0023| goods or services for profit; | 0024| I. "public service" means an activity normally and | 0025| generally associated with educational institutions in this | 0001| state, a purpose or significant result of which is not to | 0002| engage in competition with private enterprise; | 0003| J. "student" means a person seeking a degree or a | 0004| certificate from an educational institution; and | 0005| K. "uniform accounting standards" means an | 0006| accounting method that allows government agencies and | 0007| educational institutions to identify the true and total cost of | 0008| supplying goods and services in the same manner as private | 0009| enterprise would identify true and total costs, including the | 0010| following: | 0011| (1) labor expenses, including direct wage and | 0012| salary costs, training costs, overtime and supervisory | 0013| overhead; | 0014| (2) total employee fringe benefits and other | 0015| personnel expenses; | 0016| (3) operating costs, including vehicle | 0017| maintenance and repair, marketing, advertising and other sales | 0018| expenses, office expenses, billing and insurance expenses; | 0019| (4) real estate and equipment costs, debt | 0020| service costs and a proportionate amount of other agency | 0021| overhead and capital expenses, including vehicle depreciation | 0022| and depreciation of other fixed assets such as buildings and | 0023| equipment; | 0024| (5) contract management costs; | 0025| (6) the imputed tax impact of the activity if | 0001| such entity were required to pay federal, state and local | 0002| taxes; and | 0003| (7) any other cost particular to the business | 0004| or industry supplying the goods or services. | 0005| Section 4. GOVERNMENT COMPETITION WITH PRIVATE ENTERPRISE | 0006| PROHIBITED--EXCEPTIONS.-- | 0007| A. A government agency shall not start or expand | 0008| any commercial activity for public use if the goods or services | 0009| can be procured from private enterprise through ordinary | 0010| business channels. | 0011| B. A government agency may perform or provide a | 0012| commercial activity when: | 0013| (1) no private enterprise source is capable of | 0014| providing the needed goods or services; provided the efforts | 0015| made to solicit private enterprise sources are documented and | 0016| made available to the public upon request; | 0017| (2) the activity is inherently related to the | 0018| state's defense; or | 0019| (3) the agency can provide the commercial | 0020| activity to government agencies or educational institutions on | 0021| a continuing basis at a lower total cost than if the commercial | 0022| activity were obtained from private enterprise as determined by | 0023| cost comparisons outlined in the competitive impact statement | 0024| relating to the specific commercial activity. | 0025| C. If a government agency is authorized by law to | 0001| engage in a commercial activity, the government agency shall | 0002| set a fee or charge a price for that commercial activity that | 0003| includes the true and total cost related to engaging in the | 0004| commercial activity, including: | 0005| (1) the fair market value of the activity; and | 0006| (2) the direct and indirect costs incurred in | 0007| engaging in the commercial activity determined by use of | 0008| uniform accounting standards. | 0009| D. If a government agency starts or expands a | 0010| commercial activity, the government agency shall: | 0011| (1) prepare a competitive impact statement; | 0012| and | 0013| (2) prepare a detailed request for proposal | 0014| that is widely disseminated within segments of the private | 0015| enterprise that normally engage in the commercial activity to | 0016| obtain firm bids or proposals for the commercial activity | 0017| requested. A reasonable time frame approved by the state | 0018| purchasing agent shall be given to private enterprise to submit | 0019| bids or proposals, including time to obtain financial supply | 0020| commitments. Bids received from the request for proposal shall | 0021| be used in the preparation of the competitive impact statement. | 0022| E. The general services department shall adopt and | 0023| implement regulations and procedures to implement the | 0024| provisions of and monitor government agency compliance with the | 0025| Unfair Competition Act. | 0001| F. Unless specifically authorized by law, | 0002| educational institutions shall not: | 0003| (1) engage in commercial activities for | 0004| students, faculty, staff, invited guests or the general public | 0005| that can be procured from private enterprise through ordinary | 0006| business channels, unless the commercial activity: | 0007| (a) requires the participation of | 0008| students as a part of an educational program to obtain a degree | 0009| or certificate; | 0010| (b) is a recognized and integral part of | 0011| a teaching, educational or research program leading to a degree | 0012| or certificate; or | 0013| (c) consists of on-campus activities, | 0014| including: 1) food service; 2) student housing; 3) sponsoring | 0015| cultural and athletic events; 4) providing facilities for | 0016| recreation to students, faculty and staff; 5) daycare services | 0017| for children of faculty, staff and students; 6) sales of course | 0018| books and course-related supplies, excluding electronic | 0019| equipment or devices and peripherals and software; and 7) sale | 0020| of a limited and reasonable quantity of personal items bearing | 0021| the institution's insignia, which are incidental to the sales | 0022| of textbooks and other items permitted in Item 6) of this | 0023| subparagraph; | 0024| (2) submit competitive bidding for a | 0025| commercial activity unless the commercial activity is performed | 0001| by students and is a recognized and integral part of a | 0002| teaching, education or research program leading to a degree or | 0003| certificate from the educational institution. Such bid shall | 0004| fairly and fully include all direct and indirect costs using | 0005| uniform accounting standards, unless the funding source | 0006| provides for or requires all bidders to use a specific | 0007| procedure or formula for allocating costs; | 0008| (3) engage in commercial activities for or | 0009| through another government agency, including an | 0010| intergovernmental agency agreement; or | 0011| (4) dispose by sale of commercial activity and | 0012| byproducts that are part of research or instruction conducted | 0013| by students and faculty of the educational institution and | 0014| leading to a student degree or certificate unless the sale is | 0015| an integral part of the particular research project or | 0016| instructional program or there is no other practical way of | 0017| disposing of the commercial activity or byproduct and if the | 0018| commercial activity or byproduct is sold at fair market value | 0019| using uniform accounting standards. | 0020| G. In determining whether the provision of a | 0021| commercial activity is directly related to teaching or | 0022| educational or research programs leading to a degree or | 0023| certificate, the following criteria shall be considered: | 0024| (1) whether the provision of the commercial | 0025| activity is necessary for the student to pursue a degree or | 0001| certificate or for faculty or staff to engage in research or | 0002| teaching; | 0003| (2) whether the commercial activity is a | 0004| specialty good or service not generally available to the | 0005| public; | 0006| (3) whether the price charged for the | 0007| commercial activity reflects the direct and indirect costs and | 0008| overhead costs of providing the commercial activity and the | 0009| price in the private marketplace; and | 0010| (4) whether measures have been taken to ensure | 0011| that the provision of the commercial activity is only for | 0012| students, faculty or staff and not the general public. | 0013| Section 6. NONPROFIT COMPETITION WITH PRIVATE ENTERPRISE | 0014| PROHIBITED--EXCEPTIONS.-- | 0015| A. A nonprofit organization shall not engage in a | 0016| commercial activity in competition with for-profit business in | 0017| the state unless the commercial activity of the nonprofit | 0018| organization pays all the taxes and fees that are applicable to | 0019| a corresponding for-profit business. | 0020| B. A nonprofit organization is authorized to | 0021| perform or provide a commercial activity when: | 0022| (1) the activity is specifically authorized by | 0023| statute; | 0024| (2) the activity is not regularly carried on; | 0025| or | 0001| (3) no private enterprise source is capable of | 0002| providing the commercial activity. In such case, the efforts | 0003| made to solicit private enterprise sources shall be documented | 0004| and made available to the public upon request. | 0005| C. If a nonprofit organization is authorized by law | 0006| to engage in a commercial activity, the organization shall set | 0007| a fee or charge a price for the commercial activity that | 0008| includes the true and total cost related to engaging in the | 0009| commercial activity by the nonprofit organization, including: | 0010| (1) the fair market value of the activity; and | 0011| (2) the direct and indirect cost incurred in | 0012| engaging in the commercial activity determined by use of | 0013| uniform accounting standards. | 0014| D. If a nonprofit organization proposes to begin | 0015| engaging in a commercial activity, the nonprofit organization | 0016| shall: | 0017| (1) prepare a competitive impact statement; | 0018| and | 0019| (2) prepare a detailed request for proposal | 0020| that is widely disseminated within segments of private | 0021| enterprise that normally engage in the commercial activity in | 0022| order to obtain firm bids or proposals for the commercial | 0023| activity requested. A reasonable time shall be given to | 0024| private enterprise to submit bids or proposals, including time | 0025| to obtain financial supply commitments. Bids received from the | 0001| request for proposal shall be used in the preparation of the | 0002| competitive impact statement. | 0003| E. Nonprofit organizations that engage in | 0004| commercial activities shall adopt and implement procedures to | 0005| monitor their compliance with the Unfair Competition Act. | 0006| Section 7. INJUNCTION.--Two or more private enterprises | 0007| organized and operating under the laws of New Mexico may file | 0008| an action in district court to restrain and enjoin a government | 0009| agency or nonprofit organization from starting, expanding or | 0010| engaging, as applicable, in a commercial activity that violates | 0011| the provisions of the Unfair Competition Act. | 0012| Section 8. SEVERABILITY.--If any part or application of | 0013| the Unfair Competition Act is held invalid, the remainder or | 0014| its application to other situations or persons shall not be | 0015| affected. | 0016| Section 9. EFFECTIVE DATE.--The effective date of the | 0017| provisions of this act is July 1, 1997. | 0018|  |