New Mexico
Register / Volume XXXVII, Issue 12 / June 23, 2026
TITLE 5 POST-SECONDARY EDUCATION
CHAPTER 3 POST-SECONDARY
EDUCATION INSTITUTION FINANCES
PART 9 CAPITAL
BUDGETS - PLANNING AND FUNDING RECOMMENDATIONS
5.3.9.1 ISSUING
AGENCY: State of New Mexico Higher Education
Department.
[5.3.9.1 NMAC – Rp.,
5.3.9.1 NMAC, 6/23/2026]
5.3.9.2 SCOPE: All public
post-secondary educational institutions operating within and receiving
financial support from the state of New Mexico and special schools.
[5.3.9.2 NMAC – Rp, 5.3.9.2
NMAC, 6/23/2026]
5.3.9.3 STATUTORY
AUTHORITY: Section 9-25-1 et seq. NMSA 1978, Section 21-1-21
NMSA 1978 and Section 21-1-26 et seq. NMSA 1978.
[5.3.9.3 NMAC – Rp, 5.3.9.3
NMAC, 6/23/2026]
5.3.9.4 DURATION: Permanent.
[5.3.9.4 NMAC – Rp, 5.3.9.4
NMAC, 6/23/2026]
5.3.9.5 EFFECTIVE
DATE: June 23, 2026, unless a later
date is cited at the end of a section.
[5.3.9.5 NMAC – Rp, 5.3.9.5
NMAC, 6/23/2026]
5.3.9.6 OBJECTIVE:
A. The
objective of 5.3.9 NMAC is to establish a process by which the department will
review capital outlay funding request packages developed by public
post-secondary institutions and special schools, approved by institutional
governing boards, and presented to the department for recommendation to the
legislature annually.
B. The
purpose of 5.3.9 NMAC is to provide public post-secondary institutions and
special schools with an equitable process by which the department can review
packages from institutions that contain capital projects, listed in priority
order, that are considered to represent the greatest needs of the state and of
the institutions. The department, will review requests for capital outlay
funding submitted by public post-secondary institutions and special schools,
recommend the projects in priority order, and present funding recommendations
for approval by the department.
[5.3.9.6 NMAC – Rp, 5.3.9.6
NMAC, 6/23/2026]
5.3.9.7 DEFINITIONS:
A. “Athletic
facility project”
means capital projects exceeding fifty
million dollars ($50,000,000) that construct or renovate competition or
training facilities designed primarily or exclusively for intercollegiate
student‑athletes at institutions participating and in good standing with
the national collegiate athletic
association (NCAA) division I or division II, and do not include
recreation or wellness facilities intended for the general student population.
Athletic facility projects are only eligible for consideration under the higher
education major projects fund submission process outlined in the department’s
instruction manual for annual capital outlay funding requests.
B. “Construction”
means the project execution phase in which a contractor implements the approved
design and technical specifications, coordinating labor, materials, and
equipment to physically assemble a capital asset.”
C. “Department”
means the New Mexico higher education department.
D. “Design”
means the comprehensive, multi-phase technical development process comprising
programming, schematic design, design development, and the finalization of
construction documents required to transform an identified institutional need
into a fully realized, cost-validated capital asset that conforms to the
institution’s long-range facility plan.
E. “Division
I” means the highest level of
intercollegiate athletics as defined by the NCAA and characterized by the
pursuit of national-level competition, significant financial investment, and
the ability to offer athletic scholarships. A four-year institution applying
for division I athletic facilities funding from the higher education major
projects fund shall provide data that shows that the most recent six-year
graduation rate for first-time full-time freshmen is sixty-five percent or
higher or that the graduation rate for students in the most recent year is
higher than the average rate of the previous three years.
F. “Division
II” means an
intermediate-level of intercollegiate athletics defined by the NCAA that
operates under the philosophy of "life in the balance" and focuses on
integrating athletics into the broader educational experience rather than
prioritizing elite, entertainment-focused competition.
G. “Four-year
institution” means a university enumerated in Article 12, Section 11 of the
constitution of New Mexico.
H. “Higher
education major projects fund” means the nonreverting
fund created in the state treasury that is administered by the department for
major capital outlay projects at public post-secondary institutions. The fund
consists of appropriations, income from investment of the fund, gifts, grants,
donations and other money credited to the fund. Money in the fund is subject to
appropriation by the legislature.
I. “Major
projects” means research and instruction and general purpose facilities of
four-year institutions costing fifty million dollars ($50,000,000) or more.
J. “Public
post-secondary institution” means any
state-supported four-year university, two-year college, or tribal college
lawfully created and maintained pursuant to state, federal, or tribal authority
for the purpose of higher education.
K. “Single
purpose venue” means a facility that
is designed, built, and operated primarily or exclusively for one specific
non-instructional, non-research activity, program, or function, and is not
intended for broad, multi‑use purposes.
L. “Special
schools” means the New Mexico school
for the deaf (NMSD) and the New Mexico school for the blind and visually impaired
(NMSBVI).
M. “Student
housing” means any residential facility owned by a public post-secondary
institution where the primary purpose is to provide lodging for enrolled
students, including facilities located on or off the main campus. Student
housing projects are only eligible for consideration under the higher education
major projects fund submission process outlined in the department’s instruction
manual for annual capital outlay funding requests.
N. “Student
life projects” means major capital outlay for public post-secondary
institution’s nonacademic purposes that enhance students’ college experience,
including recreation centers, dining halls, and other campus amenity
facilities. Student life projects are only eligible for consideration under the
higher education major projects fund submission process outlined in the
department’s instruction manual for annual capital outlay funding requests.
O. “Tribal
college” means a tribally, federally or congressionally chartered
post-secondary educational institution located wholly within New Mexico.
P. “Two-year
institution” means a community college, including branch community
colleges, northern New Mexico college and the New Mexico military institute for
its junior college program.
[5.3.9.7 NMAC – N, 6/23/2026]
5.3.9.8 REVIEW
CRITERIA:
A. Reviewing
and recommending: In reviewing and recommending capital project requests, the department
will be guided by the general criteria listed below. Specific determinants for
evaluating the projects may vary from year to year as the immediate capital
needs of the institutions evolve and as requirements for code compliance are
revised. These influences will be explained each year in the capital project
recommendations document prepared for the New Mexico legislature. In general, the department will give
preference to the following types of projects:
(1) projects which are
strongly related to instructional programs, and which support an institution’s
mission and particular role;
(2) projects to provide high
quality educational settings which represent up-to-date technologies;
(3) projects which are
necessary to accommodate enrollment growth;
(4) projects to address
major health and safety problems and elimination of physical barriers to
handicapped persons;
(5) projects resulting from
unforeseen conditions that if uncorrected would result in major property
deterioration;
(6) projects to renovate facilities or to make wise use of
other existing resources whenever feasible and economical;
(7) projects to improve utilities systems or building energy
efficiency that will result in rapid capitalization of initial costs and
long-term reduction of energy costs;
(8) projects for which there
is no other available or more appropriate funding source, such as building
renewal and replacement funds, local bonds, revenue bonds, auxiliary revenues,
or research revenues; and
(9) projects
eligible for construction phase funding from the higher education major
projects fund for which at least fifty percent of the design phase is
completed, and design documents are readily available.
B. Projects
eligible for capital outlay recommendation: Capital outlay projects which are
primarily used to support the following activities are eligible for
consideration by the department for state funding:
(1) Instruction:
Instructional space includes classrooms, laboratories, other teaching
facilities, and office space for faculty deans, and instructional department
heads and related clerical staff.
(2) Library: All activities necessary to operate libraries are
eligible.
(3) Administration services:
All activities related to student services or institutional administration are
included in this category (e.g., admissions, administrative vice presidents,
comptroller, computer center, dean of students, maintenance work shops, placement
services, university architect, vocational director).
(4) Research: Only four-year
institutions may submit requests for state funds for capital outlay projects to
house research activities which will enhance fulfillment of the institution's
mission. All sponsored research and organized research units, including
administration and management of research activities, may qualify for support.
(5) Public service:
Institutions may submit requests for state funds for capital outlay projects to
house public service activities. Eligibility under this category is limited to
sponsored public service activities and organized public service units, such as
public broadcasting services, small business development centers, and
cooperative extension services. See Subsection C of 5.3.9.8 NMAC for activities
not eligible for state funding.
(6) Physical plant: Circulation and support space, such as
halls, restrooms, and mechanical equipment rooms, for buildings housing
eligible activities will be included in all capital outlay projects. In
addition, the following types of projects are eligible for consideration:
stand-alone utility structures such as heating and cooling plants, electric
substations, and utility tunnels; physical plant shops offices and storage
areas; and site improvements for infrastructure systems such as roads, parking
lots, drainage or storm sewers, water or wastewater, telecommunications cables,
or heating/cooling loops.
(7) Multi-use facilities:
Capital projects with buildings that house more than one activity, one or more
of which are eligible for state funding, may be submitted. However, only space
devoted to eligible activities may be considered for state funding. A plan for
funding the ineligible space from non-state sources must be included with the
proposed project. For individual projects with common space used for both
eligible and ineligible activities, state funding will be prorated based upon
the percentage of time and amount of space allocated to eligible activities;
the balance must be supported from other sources. (See the proration formula in
Subsection D of 5.3.9.8 NMAC.)
(8) Land acquisitions: Land
to be used for eligible activities will be considered for state funding.
(9) Student housing: As defined in Subsection M of 5.3.9.7
NMAC.
(10) Student life projects: As defined in Subsection N of
5.3.9.7 NMAC.
(11) Athletic Facility Projects: As defined in Subsection A of
5.3.9.7 NMAC.
C. Projects
ineligible for capital outlay recommendation: Capital outlay projects which are
primarily used for the following activities are not eligible for department recommendation:
(1) Non-instructional
athletics, such as intercollegiate sports, at non-NCAA division I and division
II member institutions.
(2) Single purpose venues
and auxiliaries such as golf courses, for either students or the general public
that do not meet the eligibility requirements for the higher education major
projects fund. These operations are not eligible for state funding and are
expected to be fully self-supporting and self-liquidating from the revenues
generated by their operations.
D. Proration
of funding: When a multi-use building will be used for both eligible and
ineligible activities, the funding request must be prorated between state and
other sources according to the amount of time and space devoted to eligible vs.
ineligible activities. For example: A new fine arts building is being proposed
with a total of 70,000 gross square feet (GSF) at a cost of $80/GSF, for a
total of $5,600,000. Net assignable square feet (NASF) within the building will
be 56,000. Of this amount, 35,000 NASF will be used by activities eligible for
state funding; 15,000 NASF will be multi-use 60 percent of the time for
eligible activities (instruction) and 40 percent of the time for ineligible
activities (community concerts); and 6,000 NASF is ineligible. To determine the
portion of the total capital project that is eligible for consideration for
state funding, the following formula is used:
(1) (ES + (MU x EU)
NASF x GSF x cost per GSF = State
funding for eligible space
(2) (35,000 + (15,000 x .60)
56,000 x 70,000 x $80 = $4,400,000
(3) ES = Eligible net
assignable square feet
(4) MU = Multi-use net
assignable square feet
(5) EU = Eligible use (percent of available time used for
eligible activities)
(6) NASF = Net assignable
square feet
(7) GSF = Gross square feet
E. Exceptions
for two-year institutions: Space for certain functions that are ineligible for
state funding at four-year institutions may be included as a portion of capital
projects submitted by two-year institutions. The rationale for this exception
is that two-year institutions usually do not have large-scale auxiliary
enterprises which can provide an adequate revenue stream for financing
auxiliary facilities. These exceptions apply only if a two-year institution has
provided the required local match of twenty-five percent as described in the
following Subsection F of 5.3.9.8 NMAC.
F. Required
local match:
(1) Higher education major projects fund requests by four-year institutions:
(a) For design phase funding the match
must be at least twenty-five percent for research and instruction and general
purposes and at least fifty percent for student housing and student life
projects.
(b) For construction phase funding the
match must be at least ten percent for research and instruction and general
purposes and at least twenty percent for student housing and student life
projects.
(c) For athletic facilities the project
cost is at least fifty million dollars ($50,000,000) and the match must be at
least fifty percent and is not waivable.
(2) Higher education major projects fund requests by two-year institutions
and tribal colleges for student housing and student life projects will require
at least fifty percent match.
(3) All other capital outlay requests for two-year institutions:
the department requires local matching participation in the amount of twenty-five
percent of the total cost for each project or group of projects. However, the department
may waive or reduce the twenty-five percent matching requirement if the
two-year institution is not authorized to issue local general obligation bonds,
is at maximum bonding capacity, or has already contributed from local sources
at least twenty-five percent of all construction costs, including the cost of
the proposed project.
G. Higher
education major projects fund waiver: A required match may be eligible to be
waived upon a finding by the department that the public post-secondary institution
cannot reasonably afford the match with institutional reserves, institutional
bonds in accordance with the Institution Bond Act, property tax levies, federal
or tribal support, students fees or other applicable nonstate revenue.
[5.3.9.8 NMAC – Rp, 5.3.9.8
NMAC, 6/23/2026]
5.3.9.9 INSTITUTIONAL FACILITY
PLANNING: Each public post-secondary institution and
special school requesting capital outlay funding from the state of New Mexico
shall maintain on file with the department a current five-year institutional
capital plan. The plan must be submitted to the department following the
requirements as outlined in the department’s instruction manual for annual
capital outlay funding requests. The institutional plan shall also be
consistent with the project information requirements established by the
department of finance and administration for infrastructure capital improvement
plan (ICIP) submissions. For institutions with branch campuses, information for
each branch may be incorporated into the main campus plan, provided that
complete and separate information for each branch is included.
[5.3.9.9 NMAC – Rp, 5.3.9.9
NMAC, 6/23/2026]
History
OF 5.3.9 NMAC:
Pre-NMAC History: The material in this part was derived from
that previously filed with the State Records Center and Archives under:
BEF Rule 430,
Capital Budgets-Planning and Funding Recommendations, 2/27/1985.
CHE Rule 430,
Capital Budgets-Planning and Funding Recommendations, 10/26/1990.
History of
Repealed Material:
5.3.9 NMAC - Capital
Budgets-Planning and Funding Recommendations, filed 12/31/1998 was repealed and
replaced by 5.3.9 NMAC - Capital Budgets-Planning and Funding Recommendations,
effective 6/23/2026.