0001| SENATE BILL 41 | 0002| 43RD LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION, 1998 | 0003| INTRODUCED BY | 0004| BEN D. ALTAMIRANO | 0005| | 0006| | 0007| | 0008| | 0009| | 0010| AN ACT | 0011| RELATING TO STATE GOVERNMENT FUNCTIONS; ENACTING THE | 0012| PRIVATIZATION ACT; PROVIDING REQUIREMENTS AND CONDITIONS FOR | 0013| PRIVATIZATION EFFORTS; REQUIRING A COST-BENEFIT ANALYSIS OF | 0014| POTENTIAL PRIVATIZATION; PROVIDING POWERS AND DUTIES. | 0015| | 0016| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0017| Section 1. SHORT TITLE.--This act may be cited as the | 0018| "Privatization Act". | 0019| Section 2. LEGISLATIVE FINDINGS AND PURPOSE.-- | 0020| A. The legislature finds that: | 0021| (1) there is a national trend toward smaller | 0022| government and an increasing trend toward providing | 0023| governmental services through contract with private sector | 0024| labor rather than state employees; | 0025| (2) while privatization may be cost | - 1 - 0001| effective, inappropriate privatization can result in increases | 0002| in the cost of providing functions and decreases in the | 0003| quality of delivered functions, as well as additional costs | 0004| associated with reestablishing the function within an agency; | 0005| and | 0006| (3) the decision to privatize should be based | 0007| on objective measures of the efficacy of privatization, | 0008| including lower cost to taxpayers and better delivery of | 0009| services. | 0010| B. The legislature finds further that | 0011| privatization should be undertaken only when consistent with | 0012| the constitution of New Mexico and statutes. Without | 0013| legislative action to eliminate a program, service or | 0014| regulation, or other appropriate legislative action, an agency | 0015| is constrained in its ability to delegate its authority and | 0016| responsibility. | 0017| C. The purpose of the Privatization Act is to | 0018| ensure that privatization is implemented appropriately and | 0019| cost effectively and will truly benefit the citizens of New | 0020| Mexico. | 0021| Section 3. DEFINITIONS.--As used in the Privatization | 0022| Act: | 0023| A. "agency" means a department, office, agency, | 0024| board, commission, institution, branch or school district of | 0025| the state, including courts and district attorneys, that | - 2 - 0001| receives a direct appropriation from the legislature; | 0002| B. "appropriate authority" includes the governor, | 0003| attorney general, state treasurer, commissioner of public | 0004| lands, supreme court, board of regents, state board of | 0005| education or other official that has ultimate control of an | 0006| agency; | 0007| C. "function" means a program, service or activity | 0008| that an agency has a direct or indirect statutory obligation | 0009| to administer or perform; | 0010| D. "person" means an individual or a business, | 0011| corporation, association, partnership or similar legal entity; | 0012| and | 0013| E. "privatization" means the supplantation of | 0014| state or public school employees with a private sector | 0015| contract to perform an agency function. | 0016| Section 4. PRIVATIZATION CONTRACTS.--An agency may | 0017| propose to privatize any of its functions, but it shall not | 0018| delegate its authority or responsibility. An agency's | 0019| contract with a private sector provider shall provide for | 0020| adequate supervision of the provider's activities to ensure | 0021| that there is no inappropriate delegation of the agency's | 0022| authority. | 0023| Section 5. PRIVATIZATION--COST-BENEFIT ANALYSIS-- | 0024| REPORT.-- | 0025| A. An agency that is considering privatizing any | - 3 - 0001| of its functions shall conduct a cost-benefit analysis of the | 0002| action. The analysis shall include: | 0003| (1) the potential one-time savings and the | 0004| potential annual recurring savings from privatization; | 0005| (2) the potential market for privatization; | 0006| (3) the relative strengths and weaknesses of | 0007| governmental and private sector customer service mechanisms; | 0008| and | 0009| (4) the impact of possible reduced services | 0010| on the citizens of the state. | 0011| B. An agency shall not consider for privatization | 0012| any of the following: | 0013| (1) a function that directly or significantly | 0014| consists of planning or making public policy; | 0015| (2) a function that directly or significantly | 0016| affects the investigation or prosecution of a criminal act, | 0017| the operation of a court or the preservation of the public | 0018| peace or health; | 0019| (3) a function that makes judgments or | 0020| recommendations relative to the fiscal policy of the state or | 0021| judgments pertaining to the making of rules by which | 0022| entitlements are granted; and | 0023| (4) a function that regulates the business, | 0024| occupation or profession of a person domiciled or doing | 0025| business in New Mexico; provided that an agency may recommend | - 4 - 0001| to the legislature the elimination of the regulation. | 0002| C. The agency shall propose privatization of a | 0003| function only if the cost-benefit analysis determines that: | 0004| (1) a private sector provider can provide the | 0005| function for less cost than the agency, and that the annual | 0006| savings will be fifteen percent or more of the agency's most | 0007| recently completed fiscal year's expenditures for that | 0008| function; or | 0009| (2) a private sector provider can provide the | 0010| function for an aggregate fifteen percent less than the agency | 0011| proposes as an aggregate charge for performing the function. | 0012| D. The agency shall report its findings, including | 0013| its working papers and methodology for the cost-benefit | 0014| analysis, and recommendations for statutory changes to the | 0015| appropriate authority. If the appropriate authority approves | 0016| of the findings, it shall transmit a copy of the report to the | 0017| department of finance and administration and the legislative | 0018| finance committee by October 1 preceding a regular session of | 0019| the legislature in which the appropriate authority proposes | 0020| that a function be privatized. | 0021| E. The department of finance and administration | 0022| and the legislative finance committee shall examine the | 0023| agency's findings and recommendations and evaluate the cost- | 0024| benefit analysis. Recommendations of the department and the | 0025| committee shall be included in the respective budget | - 5 - 0001| documents. | 0002| F. An agency shall not privatize a function | 0003| without the approval of the legislature. | 0004| Section 6. EFFECTIVE DATE.--The effective date of the | 0005| provisions of this act is July 1, 1998. | 0006|  |