The bill establishes new limitations and requirements for capital outlay projects, reauthorizations, and appropriations in New Mexico. It stipulates that a capital outlay project cannot be reauthorized or reappropriated more than once, for a period exceeding two years, or unless at least ten percent of the initial appropriation has been encumbered by January 1 of that year. Additionally, it mandates that capital outlay appropriations of $100,000 or more must be included in an infrastructure capital improvement plan. Unexpended general fund capital outlay appropriations are required to revert to the capital development and reserve fund or the tribal infrastructure project fund, depending on the nature of the project.

The bill also amends existing laws to clarify the reversion timelines for unexpended balances of appropriations made from the general fund. It specifies that these balances will revert to the capital development and reserve fund or the tribal infrastructure project fund if not reverted by the effective date of the 2026 act. Furthermore, it introduces a requirement for state agencies to certify the need for appropriations by the end of the fiscal year, failing which the authorization for the project will be void. The provisions of this act will apply to capital outlay appropriations made on or after January 1, 2027.