The proposed legislation establishes the Higher Education Major Projects Fund, a nonreverting fund created within the state treasury to support major capital outlay projects at educational institutions in New Mexico. The fund will be administered by the higher education department and will consist of various sources of revenue, including appropriations and donations. Eligible uses of the fund include significant projects for four-year educational institutions, such as research and instruction facilities, student housing, and student life projects, as well as similar projects for two-year institutions and tribal colleges. The bill outlines specific match requirements for funding, which can be waived under certain conditions if an institution cannot afford the match.

Additionally, the bill mandates a transfer of $300 million from the general fund to the Higher Education Major Projects Fund in fiscal year 2027. It also sets initial funding priorities, including $150 million for a new school of medicine at the University of New Mexico, $50 million for a multidisciplinary building at New Mexico State University, and $100 million for statewide student life and housing projects. The legislation emphasizes the importance of meeting design phase requirements before construction funding can be appropriated and requires educational institutions to provide documentation regarding student populations and compliance with space standards when applying for funding.