Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR Lente
LAST UPDATED
ORIGINAL DATE 3/17/2025
SHORT TITLE Capital Outlay Projects
BILL
NUMBER House Bill 450/ec
ANALYST Carswell/Ortega
APPROPRIATION*
(dollars in thousands)
FY25 FY26
Recurring or
Nonrecurring
Fund
Affected
$1,700.0 No fiscal impact Nonrecurring General Fund
$25,000.0 No fiscal impact Nonrecurring
Severance Tax Bonding
Fund
$1,500.0 No fiscal impact Nonrecurring
Public School Capital
Outlay Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Sources of Information
LFC Files
SUMMARY
Synopsis of House Bill 450
House Bill 450 (HB450) is the 2025 capital outlay appropriations bill. The introduced version of
HB450 contains appropriations for three projects from the general fund, severance tax bonding
capacity, and the public school capital outlay fund. The projects in the introduced version are
among those included in the statewide framework adopted by the Legislative Finance Committee
in December 2025.
Section 1 provides for the circumstances and timelines under which appropriations made in this
bill shall revert to the severance tax bonding fund. Unexpended balances shall revert no later
than September 30 following the end of FY27 for appropriations to purchase vehicles, furniture,
or equipment, and following the end of FY29 for appropriations for construction or renovations.
Sections 2 and 3 align the timelines for expenditures of general fund and other state funds with
those for projects funded with severance tax bonds. If grantees do not certify the need for
appropriations named within the bill to the Department of Finance and Administration by the end
of FY27, the authorizations for those projects are void.
HB450 specifies that before a certification of need for severance tax bond proceeds is made, the
project must be sufficiently developed so that the entity reasonably expects to encumber at least
5 percent of the appropriation within six months and to expend at least 85 percent within three
years.
This bill contains an emergency clause and would become effective immediately on signature by
the governor. House Bill 450/ec – Page 2
FISCAL IMPLICATIONS
The appropriations in HB450 are nonrecurring expenses to the general fund, severance tax
bonding fund, and public school capital outlay fund. Any unexpended or unencumbered balance
remaining at the end of the fiscal year specified in Sections 1, 2, and 3 of the bill shall revert to
the originating fund.
SIGNIFICANT ISSUES
Demand for capital outlay continues to exceed available funding, even as state revenues surge.
Capital outlay requests for 2025 totaled $5.6 billion, including $3.9 billion in requests from local
entities for discretionary appropriations from House and Senate members and $1.7 billion in
requests from state agencies and higher education institutions.
ADMINISTRATIVE IMPLICATIONS
The state agencies and institutions to which appropriations are directed are responsible for
monitoring the projects funded within the bill and associated expenditures to ensure compliance
with the New Mexico Constitution and state law. Agency oversight includes all financial
transactions and reporting.
Local entities are required to report project status and progress to the state on a quarterly basis.
Legislative Finance Committee staff provide every legislator with quarterly reports on the status
of their sponsored projects based on this reporting.
CC/AO/hj