House Bill 493 (HB 493) enacts the Public Finance Accountability Act; creates the Public Finance Accountability Fund; establishes funding criteria and grant management and oversight requirements; enumerates duties of the Department of Finance and Administration; and makes an appropriation.  

 House Bill 493 (HB 493) enacts the Public Finance Accountability Act (Act).

Various definitions are provided, such as “annual audit,” “grant,” “grantee,” “state agency,” and more.

The Public Finance Accountability Fund (Fund) is created as a non-reverting fund in the State Treasury. The Fund consists of appropriations, gifts, grants, donations and money from investment of the Fund. The Office of the State Auditor is to administer the Fund, and money is appropriated to the Office of the State Auditor to assist grantees in complying with the Audit Act. 

The Department of Finance and Administration (Department) is to establish the following funding criteria for a grantee to be eligible for a grant: (1) a grantee's annual audit for the most recently concluded Fiscal Year must be a public record; (2) in the case of a grantee whose most recent annual audit or special audit documents material weaknesses or significant deficiencies that raise concerns about the grantee's ability to expend grant funds appropriately: (a) the grantee must remedy the material weaknesses and significant deficiencies to the satisfaction of the state agency making the grant; (b) the state agency making the grant is required to determine and implement special grant conditions that adequately address the material weaknesses and deficiencies; or (c) the state agency making the grant must determine that another appropriate entity is able and willing to act as fiscal agent for the grant.
Special requirements are established for the case of a grantee that is not required to have annual audits.

The Department must require that the funding criteria is met prior to allowing a state agency to: (1) certify to the State Board of Finance for the issuance of severance tax bonds for a project; or (2) make a grant to a grantee. 

The Department must establish grant management and oversight requirements that require state agencies to: A. ensure that sales, leases and licenses of capital assets acquired with capital outlay appropriations granted are approved in accordance with applicable law; B. in the event that no oversight agency is required to approve of a sale, lease or license of capital assets acquired with capital outlay appropriations granted, independently confirm that the disposition of capital assets complies with applicable law and that the grantee is receiving adequate consideration in exchange for the capital assets; C. use the appropriate capital outlay grant agreement template developed by the Department; and D. conduct field audits of capital outlay projects, on a statistical or stratified basis, in accordance with procedures and policies prescribed by the Department. 

The Department must also: A. prescribe procedures, policies and processing documents to implement the funding criteria and grant management requirements set forth in the Public Finance Accountability Act; B. prescribe one or more capital outlay grant agreement templates for use by state agencies; C. develop criteria for granting requests for deviations from its grant agreement templates and grant management and oversight requirements; and D. monitor and enforce state agencies' compliance with the funding criteria and grant management and oversight requirements required by the Public Finance Accountability Act. 




 

 Neither the Public Finance Accountability Act nor the Public Finance Accountability Fund are currently in place. At this time, the responsible entities for New Mexico’s public finance accountability are the State Auditor, the Statewide Financial Reporting and Accountability Bureau, and the Department of Finance and Administration.
 

 Amended March 21, 2025 in STBTC

STBTCa/HB 493: The Senate Tax, Business and Transportation Committee amendment to HB 493 makes the following changes:

1. On page 2, line 25, after the paragraph designation "(1)", strike the remainder of the line and on page 3, strike lines 1 and 2 and insert in lieu thereof "a grantee shall have completed an annual audit for one of the past two fiscal years, and the most recently completed annual audit shall be a public record pursuant to the Audit Act;". 
2. On page 3, line 12, after "and", insert "significant". 
3. On page 3, line 14, after "and", insert "significant". 
4. On page 3, line 21, after "years", strike the remainder of the line, strike line 22 and strike line 23 up to the comma. 
5. On page 4, line 10, after the subparagraph designation "(b)", insert "if necessary,". 
6. On page 4, line 15, after the subparagraph designation "(c)", insert "if necessary,". 
7. On page 4, line 15, strike "shall" and insert in lieu thereof "may".
 

 Committee Substitute March 14, 2025 in HAFC

HAFCcs/HB 493: The House Appropriations and Finance Committee Substitute removes the proposed Public Finance Accountability Fund and appropriation.
The definition of “grantee” is changed to mean “an entity to which a state agency grants a capital outlay appropriation or other special purpose appropriation.”

The following words are deleted from the definition of “state agency”: “…and includes every office or officer of a department, institution, board, bureau, commission, district or committee of state government.” 

Funding criteria is revised to reference appropriations rather than grants, and new requirements are established.

A section is added on “force majeures” (“Acts of God”), providing for exceptions to compliance requirements.