SENATE BILL 162
51st legislature - STATE OF NEW MEXICO - second session, 2014
Carlos R. Cisneros
RELATING TO PUBLIC MONEY; ENACTING THE CAPITAL OUTLAY PLANNING AND MONITORING ACT; INCREASING FISCAL AND PROGRAMMATIC SCRUTINY OF CAPITAL OUTLAY EXPENDITURES; REQUIRING COMPREHENSIVE FIVE-YEAR PLANS; CREATING THE CAPITAL OUTLAY PLANNING AND MONITORING DIVISION IN THE DEPARTMENT OF FINANCE AND ADMINISTRATION; PROVIDING POWERS AND DUTIES; CREATING THE CAPITAL OUTLAY PLANNING COUNCIL; MAKING TRANSFERS; AMENDING, REPEALING AND ENACTING SECTIONS OF THE NMSA 1978; MAKING AN APPROPRIATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 7 of this act may be cited as the "Capital Outlay Planning and Monitoring Act".
SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Capital Outlay Planning and Monitoring Act:
A. "capital project" means a project located in New Mexico that includes the acquisition, repair, alteration, demolition, renovation, construction or reconstruction of a public building or other public works owned by an eligible entity, including planning and design and professional engineering, surveying, architectural and landscape architectural services directly related to the capital project; purchase of rights of way or easements; purchase of land for a public building or other public works; purchase of water rights; site improvements to public property; purchase and installation of equipment of a long-term nature for a public building or other public works; purchase of furniture; purchase of motor vehicles or heavy equipment; and purchase of information technology;
B. "council" means the capital outlay planning council;
C. "division" means the capital outlay planning and monitoring division of the department of finance and administration;
D. "eligible entity" means the state, a tribe or a political subdivision or agency of the state or a tribe; and
E. "tribe" means a federally recognized Indian nation, tribe or pueblo, or a subdivision or an agency of a federally recognized Indian nation, tribe or pueblo, located wholly or partially within New Mexico.
SECTION 3. [NEW MATERIAL] CAPITAL OUTLAY PLANNING AND MONITORING DIVISION CREATED–POWERS AND DUTIES.--
A. The "capital outlay planning and monitoring division" is created in the department of finance and administration. The division shall:
(1) direct capital project planning for the executive branch, for state institutions and for local governments that seek state funding for capital projects, either directly or through coordination with other responsible state and local agencies;
(2) coordinate with the New Mexico finance authority, the New Mexico mortgage finance authority and federal agencies that provide capital project funding for local governments, other eligible entities and rural areas;
(3) work with state agencies, state institutions, local governments and the legislature to develop priorities for capital projects to be funded through the capital outlay process;
(4) oversee, either directly or through other responsible state agencies, all state-funded capital projects to ensure timely execution of approved capital projects, proper expenditures of state funding and timely reversion of unexpended balances;
(5) develop procedures to ensure current and complete accounting and reporting on state-funded capital projects;
(6) maintain a central database on capital projects that includes the fiscal and programmatic status of each capital project;
(7) identify stagnant capital projects and recommend deauthorization;
(8) identify capital projects that have been completed and fund balances that are available for reversion;
(9) provide training and assistance to eligible entities on planning, budgeting and administration of capital projects, including proper accounting and monitoring and completion of capital projects within statutory deadlines and the reversion of unexpended funds as required by law;
(10) work with the board of finance division of the department of finance and administration to ensure that capital projects authorized by the legislature are properly certified for the issuance of bonds and to ensure that capital projects proceed in a timely manner as required in the appropriating legislation and meet federal and state requirements;
(11) provide capital outlay project information required by the legislative council service to create capital outlay legislation; and
(12) staff the council.
B. The division and the legislative finance committee, cooperatively or individually, may conduct compliance and performance audits of capital projects and may coordinate those audits with the financial audits conducted by the state auditor.
C. All state agencies, institutions and instrumentalities shall assist the division as required for the division to carry out its duties.
D. The division shall report as required by appropriate interim legislative committees.
SECTION 4. [NEW MATERIAL] CAPITAL OUTLAY PLANNING COUNCIL--CREATED.--
A. The "capital outlay planning council" is created, consisting of:
(1) the secretary of finance and administration, who shall serve as chair;
(2) director of the legislative council service or the director's designee;
(3) the director of the legislative finance committee or the director's designee;
(4) the director of the division; and
(5) representatives of the following agencies or other entities who have direct responsibility for planning or overseeing capital projects for their agencies or entities:
(a) the capitol buildings planning commission;
(b) the facilities management division of the general services department;
(c) the cultural affairs department;
(d) the local government division of the department of finance and administration;
(e) the department of environment;
(f) the aging and long-term services department;
(g) the higher education department;
(h) the department of transportation;
(i) the Indian affairs department;
(j) the public education department;
(k) the New Mexico finance authority; and
(l) the New Mexico association of regional councils of governments.
B. The council may invite representatives of federal agencies that provide loans and grants to New Mexico communities for infrastructure and other capital projects to participate in meetings of the council and may invite other participants as it deems necessary.
C. The division shall staff the council, and the department of finance and administration shall administer funding of the council.
D. The division shall not pay per diem and mileage or any other compensation, perquisite or allowance to members of the council for service as a member of the council.
E. The council shall oversee the development of the state capital improvements plan by the division.
SECTION 5. [NEW MATERIAL] STATE CAPITAL IMPROVEMENTS PLAN.--
A. The division shall, with the assistance of the council, prepare and annually update a five-year "state capital improvements plan" that details the capital projects recommended to be undertaken by eligible entities with state aid or under state regulation. The plan shall:
(1) include an economic forecast and a discussion of economic activities that bear on the need for state or local infrastructure;
(2) include a description of outstanding capital projects being funded with state money, their estimated completion date, their initial cost, their estimated completion cost and their estimated operational costs for the first five years;
(3) classify capital projects with respect to urgency and need for realization;
(4) recommend a time sequence for construction or purchase of specific capital projects;
(5) contain an estimated cost of each capital project, as well as the probable operating and maintenance costs of each project;
(6) identify any revenue that will be generated by a capital project;
(7) identify existing or additional sources of funds needed for construction and operation of each capital project;
(8) identify the eligible entity that owns a capital project; and
(9) provide other information for any capital project or for the state capital improvements plan as determined by the division.
B. All capital project recommendations of the executive shall be based on the state capital improvements plan.
C. Beginning in 2016, the division shall report to the legislative finance committee and the revenue stabilization and tax policy committee annually on the status of the state capital improvements plan and modifications made to that plan.
SECTION 6. [NEW MATERIAL] CAPITAL PROJECT REQUESTS--GUIDELINES--INFRASTRUCTURE CAPITAL IMPROVEMENTS PLANS--SUBMISSION TO DIVISION.--
A. By January 15 of each year, the division shall publish capital project guidelines to be followed by eligible entities that plan to seek funding for any capital project in the next year's legislative session. The guidelines shall also identify those provisions that a tribe is required to follow in seeking funding for a capital project.
B. The guidelines shall include provisions to guide state agencies that review capital project requests or infrastructure capital improvements plans from eligible entities. The state capital improvements plan and each local government's infrastructure capital improvements plan shall be updated each year. A tribe is not required to provide infrastructure capital improvements plans to the division.
C. The guidelines shall include:
(1) a requirement that a state agency or a local government requesting state capital outlay funds is not eligible for that funding if it does not have a completed current audit or has not entered into a plan approved by the state auditor for completion of its audit;
(2) a requirement that a local government be current on its budget and quarterly report submissions to the local government division of the department of finance and administration;
(3) a requirement for local government infrastructure capital improvements plans to be submitted to appropriate state agencies;
(4) requirements for analyzing immediate and future needs of the state, regions of the state and localities; and
(5) requirements for analyzing requests in light of:
(a) critical needs of the state and local governments, including health and safety needs;
(b) the ability of the local government to provide matching funds for the capital project;
(c) the availability of other sources for the capital project;
(d) the capital project's priority on either the state capital improvements plan or a local government's infrastructure capital improvements plan;
(e) the ability to phase the capital project, if necessary, and the availability of funding to complete at least one full, functional capital project phase;
(f) the ability of the eligible entity to provide for the operation and maintenance of the capital project;
(g) the expected useful life of the capital project;
(h) the available alternatives to the capital project as requested;
(i) consideration of whether a renovation project will forestall substantial capital outlay costs in the short and long terms;
(j) the most appropriate funding sources for types of capital projects; and
(k) other considerations determined by the division, after consultation with the council.
D. By May 1 of each year, all infrastructure capital improvements plans shall be submitted as follows:
(1) local government or regional plans that are not otherwise submitted to another state agency are due to the local government division of the department of finance and administration;
(2) water and wastewater plans are due to the department of environment;
(3) street, road and highway plans are due to the department of transportation;
(4) area agency on aging or local aging program plans are due to the aging and long-term services department;
(5) public post-secondary educational institution, special school and tribal college plans are due to the higher education department;
(6) state museum, state monument and historic site plans are due to the cultural affairs department;
(7) state agency plans for state agencies under the jurisdiction of the facilities management division of the general services department are due to the facilities management division;
(8) state and local government plans that are part of master plans approved by the capitol buildings planning commission are due to the capitol buildings planning commission; and
(9) capital improvements plans for the New Mexico state fair, state parks division of the energy, minerals and natural resources department, state armory board, tribal infrastructure board, colonias infrastructure board, water trust board, judicial branch and any other capital improvements plans or capital project requests that are not specifically assigned to another state agency are due to the division.
E. All state agencies that are responsible for reviewing capital project requests shall submit their recommendations to the division by August 1 of the year prior to the year in which funding is sought. For local government projects, the recommendations shall include comprehensive analysis of the local government's capacity and effort to fund the requested capital project and its ability to operate the capital project, if applicable.
F. The division shall review the recommendations and hold hearings on the recommendations by September 15 of each year. The division shall report its findings to the governor and the legislative finance committee by October 1 of each year. The division's report to the legislative finance committee shall include proposed changes to the state capital improvements plan and a listing of all capital project requests received, findings of each reviewing agency and findings of the division.
G. The division shall publish the annual state capital improvements plan, an abstract of which shall be included in the executive budget recommendations for the following fiscal year.
H. The division shall provide the legislative council service, the revenue stabilization and tax policy committee and the legislative finance committee with the annual state capital improvements plan at the time of publication.
SECTION 7. [NEW MATERIAL] REPORTS.--Every state agency responsible for capital projects shall file electronic quarterly status reports with the division and the legislative finance committee on appropriations and expenditures.
SECTION 8. Section 9-6-3 NMSA 1978 (being Laws 1977, Chapter 247, Section 3, as amended) is amended to read:
"9-6-3. DEPARTMENT OF FINANCE AND ADMINISTRATION--CREATION--TRANSFER AND MERGER OF DIVISION FUNCTIONS--MERGER AND CREATION OF DIVISIONS.--
A. The "department of finance and administration" is created. The department shall consist of those divisions created by law or executive order, as modified by executive order pursuant to Subsection C of this section, including but not limited to:
(1) the board of finance division;
(2) the financial control division;
(3) the local government division;
(4) the management and contracts review division; [and]
(5) the state budget division; and
(6) the capital outlay planning and monitoring division.
B. The secretary is empowered to organize the department and the divisions thereof specified in Subsection A of this section and may transfer or merge functions between divisions in the interest of efficiency and economy.
C. The governor is empowered to merge divisions of the department or to create additional divisions by executive order in the interest of efficiency and economy."
SECTION 9. Section 9-6-5.1 NMSA 1978 (being Laws 1983, Chapter 296, Section 7) is amended to read:
"9-6-5.1. PLANNING POWERS AND DUTIES OF SECRETARY OF FINANCE AND ADMINISTRATION.--The secretary of [the department of] finance and administration, in addition to the other powers and duties conferred:
A. shall review federal grant applications and provide management assistance;
B. shall coordinate, in accordance with directives from the governor's office of policy and planning, state agency plans for economic, natural resource, energy resource and human resource development;
C. shall provide aid to planning and development districts in developing grant proposals and cooperate with other local entities in developing grant proposals;
[D. shall acquire, study and review all plans for capital projects proposed by state agencies and render advice on the plans. The secretary shall maintain long-range estimates and plans for capital projects and develop standards for measuring the need for and utility of proposed projects;
E.] D. may contract for, receive and utilize any grants or other financial assistance made available by the United States government or by any other source, public or private;
[F.] E. may provide planning and funding assistance to units of local government, council of government organizations, Indian tribal governments with tribal lands situated wholly or partially within New Mexico and [to] nonprofit entities having for their purpose local, regional or community betterment. The secretary, incident to any such programs, may enter into contracts and agreements with such units of local government, council of government organizations, Indian tribal governments, nonprofit entities and the federal government and may participate in or receive aid from any federal or private program in relation to such a planning program or assistance;
[G.] F. shall confer with the state budget division [of the department of finance and administration] and the capital outlay planning and monitoring division in developing comprehensive plans to assure coordination of planning and budgeting functions;
[H.] G. shall coordinate the state clearinghouse review process;
[I.] H. shall develop a status of the state report;
[J.] I. shall review and coordinate comment by state agencies on draft environmental impact statements;
[K.] J. shall provide community development block grant technical assistance to local governments;
[L.] K. shall administer, in consultation with and upon advice and direction from the community development block grant policy committee, the program for the state community development block grant program;
[M.] L. shall serve as staff to the New Mexico association of regional councils;
[N.] M. shall maintain a state planning library; and
[O.] N. shall provide planning assistance to county and multi-county districts relative to application by such districts for financial assistance and for regional plan development."
SECTION 10. TEMPORARY PROVISION--TRANSFER OF FUNCTIONS, MONEY, APPROPRIATIONS AND PROPERTY.--On the effective date of the provisions of this act, all functions, money, appropriations, records, furniture, equipment and other property of the capital projects bureau of the state budget division of the department of finance and administration are transferred to the capital outlay planning and monitoring division of the department of finance and administration.
SECTION 11. APPROPRIATION.--
A. One million two hundred thousand dollars ($1,200,000) is appropriated from the general fund for expenditure in fiscal year 2015 in the following amounts to the following agencies for the following purposes:
(1) one million dollars ($1,000,000) to the department of finance and administration to establish the capital outlay planning and monitoring division, to organize, staff and fund the capital outlay planning council and to carry out the purposes of the Capital Outlay Planning and Monitoring Act; and
(2) two hundred thousand dollars ($200,000) to the office of the state auditor to cover the costs of financial audits or fiscal reviews of local governments that are unable to comply with state audit requirements due to circumstances beyond the control of the local government resulting in lack of funds rendering the local government unable to contract for the conduct of an independent audit or fiscal review.
B. As used in this section, "circumstances beyond the control of the local government" does not mean poor management or poor planning on behalf of the governing body, intractable political disputes within the governing body that cause a failure to provide funding for audits or fiscal reviews or failure of the governing body to prioritize the need for an audit or fiscal review when planning the local government's budget.
C. Any unexpended or unencumbered balance remaining at the end of fiscal year 2015 shall revert to the general fund.
SECTION 12. REPEAL.--Section 6-4-1 NMSA 1978 (being Laws 1975, Chapter 282, Section 3, as amended) is repealed.
SECTION 13. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2014.
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