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SHORT TITLE Capital Outlay to Tribal Infrastructure Fund
SB 18/aSFC/aSFl#1
REVENUE (dollars in thousands)
Estimated Revenue
or Non-Rec
See fiscal section
(Parenthesis ( ) Indicate Revenue Decreases)
LFC Files
Responses Received From
Department of Finance and Administration (DFA)
Indian Affairs Department (IAD)
NM Aging and Long Term Services Department
Synopsis of SFl#1 Amendment
The reference to Chapter 1 noted in the SFC amendment comments below is changed to
Chapter 2.
Synopsis of SFC Amendment
The location of the changes is changed from Laws 2006, chapter 111, Section 76 to Laws
2007, Chapter 1, Section 2. The reference to Chapter 1 is probably a mistake since
Chapter 1 is the “Feed Bill". However, the next line references Laws 2007, Chapter 2
which is Senate Bill 710, a capital bill and probably the correct reference.
Section 2. Laws 2007 Chapter 2 Section 1 is changed to read.
A. Except as otherwise provided in this section or another section of this act, the unexpended
balance of an appropriation made in this act from the general fund shall revert to the
originating fund as follows:
Senate Bill 18/aSFC/aSFl#1 – Page
(1) for projects for which appropriations were made to match federal grants, six months
after completion of the project;
(2) for projects for which appropriations were made to purchase vehicles, emergency
vehicles or other vehicles that require special equipment, heavy equipment,
educational technology or equipment or furniture that is not related to a more
inclusive construction or renovation project, at the end of the fiscal year two years
following the fiscal year in which the appropriation was made for the purchase; and
(3) for all other projects for which appropriations were made, within six months of
completion of the project, but no later than the end of fiscal year 2011.
B. Upon certification by an agency that money from the general fund is needed for a purpose
specified in this act, the secretary of finance and administration shall disburse such amount of
the appropriation for that project as is necessary to meet that need.
C. Except for appropriations to the capital program fund, money from appropriations made in
this act shall not be used to pay indirect project costs.
D. The unexpended balance of an appropriation made from The general fund or other state fund,
including changes to prior appropriations, to the Indian affairs department or the aging and
long-term services department for projects located on lands of an Indian nation, tribe or
pueblo, including projects that have been Reauthorized, shall revert in a time frame set forth
in Subsection A of this section to the tribal infrastructure project fund
[D.] E. For the purpose of this section, "unexpended balance" means the remainder of an
appropriation after reserving for unpaid costs and expenses covered by binding written
obligations to third parties.
The analysis of the original should still apply since the funds do not revert to the original fund
but rather the tribal infrastructure fund.
Synopsis of Original Bill
Senate Bill 18 amends the Laws of New Mexico 2006, Chapter 111, Section 76 to allow
unexpended or unencumbered capital outlay appropriations for tribal-related projects to revert to
the Tribal Infrastructure Project Fund (“Project Fund"). Reversions to the Project Fund would
only occur for appropriations in that specific bill, both original and reauthorized, made to the
Indian Affairs Department (“IAD") or to the Aging and Long-Term Services Department
(“ALTSD"). The bill also would recodify the Tribal Infrastructure Act under Title 6 of the NM
Code, namely the Public Finance provisions.
DFA notes that although the revenue impact of this bill is largely indeterminate, it is not zero.
Unexpended balances from capital outlay appropriations funded from the general fund currently
revert to the general fund no later than the end of the fiscal year that is four years after the
enactment of the law providing the appropriation. For example, the global reversion date in the
2007 capital outlay bill was as on or before the end of FY11.
Senate Bill 18/aSFC/aSFl#1 – Page
For 2007 general fund capital outlay in Indian Country was for at least 165 projects totaling
$28.5 million. This is an average of over $172.0 per project.
Assuming that 10% of the project money is unexpended, there is a $2,900.0 transfer of
unexpended appropriations from the general fund to the tribal infrastructure fund by the end of
FY11. Although the amount of general fund capital outlay is likely to be much smaller in 2008
and subsequent years than in 2007, this bill has a reasonable likelihood of creating a $1,000.0
general fund revenue loss on a recurring basis.
DFA continues, that this was never much of an issue in previous years, when virtually all of the
state's capital outlay funds were derived from severance tax or general obligation bonds.
However, over the past few years, with substantial general fund balances being available and
used for capital outlay, redirecting reversions to another fund creates a revenue decrease to the
general fund in future years, when the general fund may need the reversionary revenue to fund
program costs.
Indian Affairs reports.
SB 18 was endorsed by the Interim Indian Affairs Committee at their Nov. 7, 2007 meeting.
Currently, all unexpended or unencumbered balances from capital outlay appropriations for tribal
projects revert to the originating fund at the end of the appropriation date. SB 18 is designed to
allow certain tribal related capital-outlay appropriations made to IAD or the ALTSD to revert
instead to the TIF Project fund. SB 18 would also help to preserve the appropriations’ original
intent to promote and develop the physical infrastructure of New Mexico’s Tribes, Pueblos, and
Nations by making reversions to the Project Fund.
Importantly, SB 18 would not preclude legislators from re-appropriating any of these
unexpended or unencumbered funds prior to their reversion.
Indian Affairs Department notes that the New Mexico Tribal Infrastructure Act of 2006
established permanent funds to provide financial support to New Mexico’s Tribes, Pueblos, and
Nations for infrastructure improvement projects (NMSA 9-21-18). The Tribal Infrastructure Act
created two funds: the Tribal Infrastructure Trust Fund and the Tribal Infrastructure Project
Fund. Both are held within the State Treasury and can be funded by monies appropriated by the
State Legislature. The Trust fund is held in perpetuity and acts as an endowment for the Project
Fund, which is administered by the Tribal Infrastructure Board. SB 18 proposes that any
unencumbered or unexpended balances from certain tribal-related capital outlay projects would
revert to the Project Fund and be available for tribal infrastructure grants awarded by the Board.
During FY 2005, 2006, and 2007, appropriations totaling $13 million were granted from the
Project Fund by the TIF Board for tribal infrastructure projects throughout the state.