September 26, 2011

1. Per Diem and Mileage ActandAnti-Donation Clauseby Gregory S. Shaffer, General CounselDepartment of Finance and Administration September 26, 2011

2. Statutes and Regulations • Per Diem and Mileage Act, Chapter 10, Article 8 NMSA 1978. • Regulations Governing the Per Diem and Mileage Act, 2.42.2 NMAC. • Regulations Relating to the Reimbursement of Moving Expenses, 2.42.3 NMAC. September 26, 2011

3. Nonsalaried Board and Commission Members Per Diem • Nonsalaried public officer defined: “a public officer serving as a member of a board, advisory board, committee or commission who is not entitled to compensation, but is entitled to payment of per diem rates and mileage.” 2.42.2.7(H) NMAC. • Official board or commission meetings. Nonsalaried public officer may elect to receive the following in conjunction with official board or committee meetings, including official subcommittee meetings: • $95 stipend for attending official board or committee meeting. • No travel required. • Entitled to $95 per meeting day. OR • Travel per diem. • Travel required, meaning the public officer must have traveled more than 35 miles from their home. • Travel must involve overnight lodging or be long enough to qualify for partial day per diem. September 26, 2011

4. Nonsalaried Board and Commission Members Per Diem – Cont. • Travel on other official business. • Travel must be authorized, in advance, by entire board or commission at an official board or committee meeting. • Travel must be for official business, as determined by entire board or commission. • Travel must have required member to be at least 35 miles from their home. • Must involve overnight lodging or be long enough to qualify for partial day per diem. September 26, 2011

5. Board and Commission Members Serving in Dual Capacities Per Diem • Who are we talking about? • Individuals who: • serve on a board or commission; and • are also compensated public officers or employees of state agencies or local public bodies. • Examples: • Secretary of Finance and Administration is an ex officio member of numerous boards, including the State Investment Council and Tribal Infrastructure Board. • Secretary of Economic development is an ex officio member of the New Mexico Finance Authority. September 26, 2011

6. Dual Capacity Board and Commission Members Per Diem – Cont. • Official board or commission meetings. • $95 stipend for attending official board or committee meeting. • NOT available if service on the board or commission is part of member’s official job duties. • IS available: • if service on the board or commission is not part of member’s official job duties; and • the member is on leave from their position as public officer or employee, if the meeting occurs during their normal work day. • Travel per diem. • Travel required, meaning the public officer must be away from home and at least 35 miles from post of duty. • Travel must involve overnight lodging or be long enough to qualify for partial day per diem. September 26, 2011

7. Dual Capacity Board and Commission Members Per Diem – Cont. • Travel on other official business. • Travel must be authorized, in advance, by entire board or commission at an official board or committee meeting. • Travel must be for official business, as determined by entire board or commission. • Travel must have required member to be away from home and at least 35 miles from designated post of duty. • Must involve overnight lodging or be long enough to qualify for partial day per diem. • Member serving in dual capacity may only collect per diem and mileage from one public entity. September 26, 2011

8. Private Automobile Mileage Reimbursement • Rate. • State mileage rate equals 80% of the IRS standard mileage rate set January 1 of the previous year. • For example, 2011 State mileage rate equals 80% of the IRS rate set on January 1, 2010. • Reimbursement only available for mileage accrued while on official business. September 26, 2011

9. Private Automobile Mileage Reimbursement – Cont. • Commuting. • Reimbursement is not available under the Per Diem and Mileage Act for mileage accrued between home and post of duty. 2.42.2.11(G) NMAC. • This is true even if official business is transacted during the commute, unless that official business required the accrual of additional mileage. 2.42.2.11(G) NMAC. • Mileage accrued between home and other official business destination (e.g., training seminar) where employee is excused from reporting to post of duty. • Reimbursement is only available to the extent that miles traveled exceed normal commuting mileage. • Example. • Assume an employee whose home is Rio Rancho and post of duty is Santa Fe. Employee is authorized to go to and from training in Albuquerque without going to post of duty in Santa Fe. • No mileage reimbursement would be authorized, since employee did not incur an extra expense by driving from home to training. • Roundtrip commute is 111 miles. • Roundtrip between home and training is 30.8 miles. September 26, 2011

10. Moving Expense Reimbursement • Threshold requirement. • Public officer or employee must be presently appointed, elected or in the employ of the state and being paid with public money at the time the moving expense is incurred. 2.42.3.8(B) NMAC. • This requirement cannot be waived. 2.42.3.8(C) NMAC. • Additional requirements: All of the following conditions must be met (2.42.3.8(A) NMAC) for reimbursement to be proper, provided that 2 through 5 may be waived by the Secretary of Finance and Administration: • the public officer or employee is assigned or transferred to a new designated post of duty for reasons clearly benefitting the state agency; • the secretary of the department of finance and administration or his designee has approved in writing the payment of moving expenses pursuant to rule; September 26, 2011

11. Moving Expense Reimbursement – Cont. • the assignment to the new designated post of duty will require the public officer or employee to commute at least thirty-five miles more from the former residence to the new designated post of duty than to the former designated post of duty; • the reimbursement is limited to the actual and reasonable moving expenses allowed by rule; • the actual and reasonable moving expenses are incurred within six months after the date the transfer or reassignment becomes effective; and • the voucher submitted for reimbursement explains the reason for the transfer or reassignment. • Special note about DFA approval. • Although approval can be granted after the fact, obtaining DFA’s prior written approval is highly recommended. • If the agency does not obtain DFA’s prior written approval, the agency runs the risk of making moving expense reimbursement promises to an employee that it is later denied the ability to keep. September 26, 2011

12. Calendar Year Limit on Per Diem and Mileage Act Reimbursements • Section 10-8-5(I) NMSA 1978 imposes special requirements on State employees who are reimbursed pursuant to the Per Diem and Mileage Act more than $1,500 in a calendar year. • Reimbursements above $1,500 are not available unless the employee reports to the appropriate person in writing the following information: • an itemized statement on each separate instance of travel covered within the reimbursement; • the place to which traveled; and • the executive, judicial or legislative purpose served by the travel. September 26, 2011

13. Calendar Year Limit on Per Diem and Mileage Act Reimbursements – Cont. • Person/entity to whom public officers and employees provide their written report. • Employees report to their department head. • Department heads report to the Governor. • Board or commission members report to the Governor. • Members of the legislature report to the New Mexico Legislative Council. September 26, 2011

14. N.M. Const., Article IX, Section 14: The Anti-Donation Clause • Article IX, Section 14’s general prohibition: “Neither the state nor any county, school district or municipality, except as otherwise provided in this constitution, shall directly or indirectly lend or pledge its credit or make any donation to or in aid of any person, association or public or private corporation or in aid of any private enterprise for the construction of any railroad except as provided in Subsections A through F of this section.” September 26, 2011

15. The Anti-Donation Clause – Cont. • What is prohibited? State agencies may not: • “lend or pledge their credit”; or • “make any donation” to or in aid of any person, association or public or private corporation. • Donation – “a ‘gift,’ an allocation or appropriation of something of value, without consideration to a ‘person, association or public or private corporation.’” Village of Deming v. Hosdreg Co., 62 N.M. 18, 28 (1956). • Value. For anti-donation clause to apply, government must be giving something of value. • Examples of something of value. • Money. • Lease of government owned property. • Examples of things with no or de minimis value. • Obsolete equipment (e.g., old, broken cell-phones), provided state statutes regarding disposal are followed. • Appreciation certificates for employees or volunteers. September 26, 2011

16. The Anti-Donation Clause – Cont. • Consideration. If government is giving something of value, must receive consideration of equivalent value in return. • Consideration Defined: “Some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss, or responsibility, given, suffered, or undertaken by the other.” Black’s Law Dictionary (6th Ed. 1990). • Examples of consideration. • Money (e.g., rent for use of a building). • Services. • Right. • A right to use property, such as an easement. • An option to do something at a later date; e.g., I pay you $100 dollars now for the right to purchase your car for $5,000 at anytime during the next month. • Examples of no consideration. • Something someone did in the past. • Something someone is already legally obligated to do. September 26, 2011

17. The Anti-Donation Clause – Cont. • Requirement that government receive equivalent value in consideration. • Although not expressly stated in Anti-Donation Clause, courts and attorney general opinions have recognized equivalent value requirement. • Requirement stems from fact that, in private business transactions, the law generally does not question the adequacy of the consideration. • In private transactions, nominal consideration is o.k.; e.g., I can agree to sell you my house for $10, for example. • In private transactions, extravagant consideration is o.k.; e.g., I can agree to pay you $100 million for your Volkswagen Beetle because I love the Disney movie, “The Love Bug”. • So, if private rule prevailed in government transactions, government could circumvent the Anti-Donation Clause by giving things of value to private entities for nominal consideration or paying extravagantly for property, goods, or services. September 26, 2011

18. The Anti-Donation Clause – Cont. • Major Exceptions to Anti-Donation Clause. • Express Constitutional Exceptions. • Care and maintenance of sick and indigent. Article IX, Section 14(A). • State may establish Vietnam veterans’ scholarship program. Article IX, Section 14(B). • State may establish loan program for students of the healing arts. Article IX, Section 14(C). • Economic development assistance pursuant to implementing legislation. Article IX, Section 14(D). • Affordable housing assistance pursuant to enabling legislation. Article IX, Section 14(E)-(F). • Other Exceptions. • Certain government to government transactions. Things of value can be given, without consideration, to: • Federal government; • Other state agencies; • Indian Nations, Tribes, and Pueblos; and • Counties, municipalities, and other political subdivisions. • Use of federal money in accordance with federal restrictions and regulations. State and local governments can be a conduit of federal money to private entities. Hotels of Distinction W., Inc. v. City of Albuquerque, 107 N.M. 257 (1988). September 26, 2011

19. The Anti-Donation Clause – Cont. • Anti-Donation Clause is not only analysis. • Section 6-5-6(C) NMSA 1978 requires all state agency expenditures to be: • “for a public benefit and purpose consistent with the related appropriation”; and • “necessary to carry out the statutory mission of the state agency”. • See the June 2002 Financial Control Division White Paper, “Authority and the Propriety of Expenditures”, available at http://www.nmdfa.state.nm.us/White_Papers.aspx, for an in-depth discussion of these requirements. September 26, 2011