appropriations; limitations. A. A capital outlay project shall not be reauthorized or reappropriated: (1) more than once; (2) for a time period greater than two years; and (3) unless at least ten percent of the initial appropriation has been encumbered by January 1 of that year, as determined by the department of finance and administration. B. A capital outlay project may be reauthorized or reappropriated to make a technical change, but a reauthorization or reappropriation shall not alter the original purpose of the capital outlay project. A capital outlay project that is reauthorized or reappropriated to make a technical change is not subject to the encumbrance requirement provided in Paragraph (3) of Subsection A of this section. C. Capital outlay authorizations and appropriations of one hundred thousand dollars ($100,000) or more shall not be made for a project unless the project is included on an infrastructure capital improvement plan. D. Capital outlay appropriations made from the general fund shall revert to the capital development and reserve fund, except for tribal projects that shall revert to the tribal infrastructure project fund. E. If severance tax bonds have been issued and no amount of the proceeds have been encumbered or expended for a capital outlay project for which bonds were issued by January 1 of the fiscal year in which unexpended balances will revert, the board of finance division of the department of finance and administration shall freeze the account, and any encumbrances after that date shall be considered invalid. If no amount has been encumbered or expended for a capital outlay appropriation from the general fund or other state funds by January 1 of the fiscal year in which the unexpended balance will revert, the department shall freeze the account, and any encumbrances after that date shall be considered invalid. An expenditure does not include a lawful, automatic deduction from the total proceeds or appropriation. F. The department of finance and administration shall provide an annual report to the legislature by January 15 on the capital outlay projects that have been frozen. The balances of frozen accounts shall be available for authorization or appropriation in that fiscal year for other purposes, subject to any applicable rules and state board of finance oversight of severance tax bonds, including, as applicable, requirements of federal tax laws relating to tax-exempt bonds. Should the proposed authorization or appropriation of a capital outlay project initially funded with proceeds of tax-exempt bonds pursuant to this subsection extend the time for expenditure of such proceeds beyond the date which is three years from the date of original issuance of the associated tax-exempt bonds, such authorization or appropriation shall be permitted only if it has been demonstrated to the satisfaction of the state board of finance that the reasons for the failure to expend proceeds within such time period were unanticipated at the time of the related tax- exempt bond issue, that such proceeds are to be expended as promptly as possible, and that the investment and expenditure of such proceeds will comply with applicable requirements of federal tax laws governing the associated tax-exempt bond issue. G. As used in this section: (1) "encumbrance" includes only direct project costs and excludes administrative fees charged by a fiscal agent; (2) "purpose" includes the functionality, use or primary objective of a project or the type of project or asset; and (3) "technical change" means a minor correction or an adjustment that does not alter the original purpose of the capital outlay project and includes correcting a drafting error, changing the administering agency, changing the fiscal agent or expanding the eligible uses of an appropriation within the same project. History: Laws 2026, ch. 59, § 1.
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