CAPITAL OUTLAY PROJECTS, the official text

SENATE BILL 240

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

Benny Shendo, Jr. And Pete Campos

AN ACT

RELATING TO CAPITAL EXPENDITURES; AUTHORIZING THE ISSUANCE OF
SEVERANCE TAX BONDS; MAKING APPROPRIATIONS FROM THE GENERAL
FUND AND OTHER STATE FUNDS; ESTABLISHING CONDITIONS FOR THE
ISSUANCE OF SEVERANCE TAX BONDS AND THE EXPENDITURE OF
SEVERANCE TAX BOND PROCEEDS; REQUIRING CERTIFICATIONS TO THE
DEPARTMENT OF FINANCE AND ADMINISTRATION; ESTABLISHING
CONDITIONS FOR THE REVERSION OF UNEXPENDED BALANCES; MAKING
APPROPRIATIONS; DECLARING AN EMERGENCY.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. SEVERANCE TAX BONDS--AUTHORIZATIONS--

APPROPRIATION OF PROCEEDS.--

A. The state board of finance may issue and sell
severance tax bonds in compliance with the Severance Tax
Bonding Act in an amount not to exceed the total of the amounts
authorized for purposes specified in this act. The state board
of finance shall schedule the issuance and sale of the bonds in

the most expeditious and economical manner possible upon a
finding by the board that the project has been developed
sufficiently to justify the issuance and that the project can
proceed to contract within a reasonable time. The state board
of finance shall further take the appropriate steps necessary
to comply with the federal Internal Revenue Code of 1986, as
amended. Proceeds from the sale of the bonds are appropriated
for the purposes specified in this act.

B. The agencies named in this act shall certify to
the state board of finance when the money from the proceeds of
the severance tax bonds appropriated in this section is needed
for the purposes specified in the applicable section of this
act. If an agency has not certified the need for severance tax
bond proceeds for a particular project by the end of fiscal
year 2028, the authorization for that project is void.

C. Before an agency may certify for the need of
severance tax bond proceeds, the project must be developed
sufficiently so that the agency reasonably expects to:

(1) incur within six months after the
applicable bond proceeds are available for the project a
substantial binding obligation to a third party to expend at
least five percent of the bond proceeds for the project; and (2) spend at least eighty-five percent of the
bond proceeds within three years after the applicable bond
proceeds are available for the project.

D. Except as otherwise specifically provided by
law:

(1) the unexpended balance from the proceeds

of severance tax bonds appropriated in this act for a project
shall revert to the severance tax bonding fund no later than
the following dates:

(a) for a project for which severance
tax bond proceeds were appropriated to match federal grants,
six months after completion of the project;

(b) for a project for which severance
tax bond proceeds were appropriated to purchase vehicles,
including emergency vehicles and other vehicles that require
special equipment; heavy equipment; books; educational
technology; or other 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 severance tax bond proceeds were made available for
the purchase; and

(c) for any other project for which
severance tax bonds were appropriated, within six months of
completion of the project, but no later than the end of fiscal

year 2030; and

(2) all remaining balances from the proceeds
of severance tax bonds appropriated for a project in this act
shall revert to the severance tax bonding fund three months
after the latest reversion date specified for that type of
project in Paragraph (1) of this subsection.

E. Except for appropriations to the capital program
fund, money from severance tax bond proceeds provided pursuant
to this act shall not be used to pay indirect project costs. F. Except for a project that was originally funded
using a tax-exempt loan or bond issue, a project involving

repayment of debt previously incurred shall be funded through
the issuance of taxable severance tax bonds with a term that
does not extend beyond the fiscal year in which they are
issued.

G. Money that is appropriated from the proceeds of
severance tax bonds pursuant to this act shall not be subject
to a binding written agreement with a third party prior to the
authorized state agency's approval to enter into that
agreement.

H. For the purposes of this section, "unexpended
balance" means the remainder of an appropriation after
reserving for unpaid costs and expenses subject to a binding
written agreement with a third party.

SECTION 2. GENERAL FUND APPROPRIATIONS--LIMITATIONS--
REVERSIONS.--

A. Except as otherwise specifically provided by
law, the unexpended balance of an appropriation made in this
act from the general fund shall revert:

(1) no later than September 30 following:

(a) the end of fiscal year 2028 for a
project for which an appropriation was made to purchase
vehicles, including emergency vehicles and other vehicles that
require special equipment; heavy equipment; books; educational
technology; or other equipment or furniture that is not related
to a more inclusive construction or renovation project; or

(b) the end of fiscal year 2030 for a
project for which an appropriation was made related to an
inclusive construction or renovation project; or

(2) within six months of completion of the
project for any other project for which an appropriation was
made, but no later than the end of fiscal year 2030.

B. The agencies named in this act shall certify to
the department of finance and administration that the money
appropriated in this act is needed for the purposes specified
in the applicable section of this act. If an agency has not
certified the need for the appropriation for a particular
project by the end of fiscal year 2028, the authorization for
that project is void.

C. Money that is appropriated from the general fund
pursuant to this act shall not be subject to a binding written
agreement with a third party prior to the authorized state
agency's approval to enter into that agreement.

D. For the purposes of this section, "unexpended
balance" means the remainder of an appropriation after
reserving for unpaid costs and expenses subject to a binding
written agreement with a third party.

SECTION 3. FUND APPROPRIATIONS OTHER THAN GENERAL FUND--
LIMITATIONS--REVERSIONS.--

A. Except as otherwise specifically provided by
law:

(1) the unexpended balance of an appropriation
made in this act from a fund other than the general fund shall
revert no later than the following dates:

(a) for a project for which an
appropriation was made to match federal grants, six months
after completion of the project;

(b) for a project for which an
appropriation was made to purchase vehicles, including
emergency vehicles and other vehicles that require special
equipment; heavy equipment; books; educational technology; or
other 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

(c) for any other project for which an
appropriation was made, within six months of completion of the
project, but no later than the end of fiscal year 2030; and

(2) all remaining balances from an
appropriation made in this act for a project shall revert three
months after the latest reversion date specified for that type
of project in Paragraph (1) of this subsection.

B. Except for appropriations to the capital program
fund, money from appropriations made in this act shall not be
used to pay indirect project costs.

C. Money that is appropriated from a fund other
than the general fund pursuant to this act shall not be subject
to a binding written agreement with a third party prior to the
authorized state agency's approval to enter into that
agreement.

D. For the purposes of this section, "unexpended
balance" means the remainder of an appropriation after
reserving for unpaid costs and expenses subject to a binding
written agreement with a third party.

SECTION 4. CULTURAL AFFAIRS DEPARTMENT PROJECT--SEVERANCE
TAX BONDS.--Pursuant to the provisions of Section 1 of this
act, upon certification by the cultural affairs department that
the need exists for the issuance of the bonds, five million
dollars ($5,000,000) is appropriated to the cultural affairs
department to plan, design, construct, furnish and equip
improvements to sites and facilities at museums, monuments,
historic sites and cultural facilities statewide.

SECTION 5. VETERANS' SERVICES DEPARTMENT--GENERAL
FUND.--Two million dollars ($2,000,000) is appropriated from
the general fund to the veterans' services department for
expenditure in fiscal years 2026 through 2030, unless otherwise
provided in Section 2 of this act, to plan, design, construct,
furnish and equip improvements to veteran cemeteries and
memorials statewide.

SECTION 6. PUBLIC EDUCATION DEPARTMENT PROJECT--
APPROPRIATION FROM THE PUBLIC SCHOOL CAPITAL OUTLAY
FUND.--Eighteen million eight hundred eighty thousand dollars
($18,880,000) is appropriated from the public school capital
outlay fund to the public education department for expenditure
in fiscal years 2026 through 2030, unless otherwise provided in
Section 3 of this act, to purchase district-owned school buses
statewide.

SECTION 7. PROJECT SCOPE--EXPENDITURES.--If an
appropriation for a project authorized in this act is not
sufficient to complete all the purposes specified, the
appropriation may be expended for any portion of the purposes
specified in the appropriation. Expenditures shall not be made
for purposes other than those specified in the appropriation.

SECTION 8. ART IN PUBLIC PLACES.--Pursuant to Section

13-4A-4 NMSA 1978 and where applicable, the appropriations

authorized in this act include one percent for the art in
public places fund.

SECTION 9. EMERGENCY.--It is necessary for the public
peace, health and safety that this act take effect immediately.

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