NMAGO 05-02.

Case DateJune 10, 2005
CourtNew Mexico
New Mexico Attorney General Opinions 2005. NMAGO 05-02. June 10, 2005OPINION OF PATRICIA A. MADRID Attorney GeneralOpinion No. 05-02BY: Andrea R. Buzzard Assistant Attorney General TO: Honorable Leonard Lee RawsonState SenatorP.O. Box 996Las Cruces, NM 88004 RE: SUBCONTRACTOR BONDING REQUIREMENTS ON PUBLIC WORKS BUILDING PROJECTSQUESTIONS: 1. Does Senate Bill 814, which is 2005 N.M. Laws, Ch. 99, apply to all tiers of subcontractors, e.g., first, second or third, even if the second or third tiers are not in privity of contract with the primary contractor? 2. In the context of various stages of the bidding, award and contracting process, at which point does Senate Bill 814 apply? CONCLUSIONS: 1. We believe that a court, in the absence of contrary regulations, would likely conclude that Senate Bill 814 applies only to a subcontractor that contracts directly with the prime contractor. 2. We believe that a court would likely apply Senate Bill 814 in a prospective manner to subcontractor contracts executed after the effective date and not to those executed before the effective date. DISCUSSION: Senate Bill 814, now 2005 N.M. Laws, Ch. 99, (hereinafter "Chapter 99"), enacts a new section of the Procurement Code: BONDING OF SUBCONTRACTORS: A subcontractor shall provide a performance and payment bond on a public works building project if the subcontractor's contract for work to be performed on a project is fifty thousand dollars ($50,000) or more. Chapter 99 does not define "subcontractor." The Procurement Code, NMSA 1978, §§ 13-1-78 to -199 (1984 as amended through 2005), does not define "subcontractor." Nor have regulations been adopted under the Code to address this specific issue.(fn1) Generally, however, "[a] subcontractor may be briefly described as one who has entered into a contract ... for the performance of an act, with a person who has already contracted for its performance [citing cases]." Staley v. New, 56 N.M. 756, 759, 250 P.2d 893, 895 (1952). This general description of "subcontractor" could encompass "sub-subcontractors" of any "tier" designation. The issue is thus whether such an all-encompassing designation of any and all tiers of subcontractors comports with legislative intent, particularly as evidenced by similar legislation pertaining to subcontractor bonding and as influenced by policy considerations respecting general, i.e. prime, contractor bonding requirements on public works projects. A court "begin[s] the search for legislative intent of a statute by looking `first to the words chosen by the Legislature and the plain meaning of the Legislature's language'." State v. Davis, 2003-NMSC-022, ¶ 6, 134 N.M. 172, 74 P.3d 1064 (quoting State v. Martinez, 1998-NMSC-023, ¶ 8, 126 N.M. 39, 966 P.2d 747). Nonetheless, a court: `[m]ust exercise caution in applying the plain meaning rule.' State ex rel. Helman v. Gallegos, 117 N.M. 346, 353, 871 P.2d 1352, 1359 (1994). While we do not ignore the language used by the Legislature, we must ensure that words are not interpreted outside of any relevant legislative context. Thus, we will interpret statutes as a whole and look to other statutes in pari materia in order to determine legislative intent. SeeRoth v. Thompson, 113 N.M. 331, 334, 825 P.2d 1241, 1244 (1992). State v. Martinez, ¶ 9, supra. "Statutes on the same general subject should be construed by reference to each other, seeRunyan v. Jaramillo, 90 N.M. 629, 631, 567 P.2d 478, 480 (1977), the theory being that the court can discern legislative intent behind an unclear statute by reference to similar statutes where legislative intent is more clear." State v. Ogden, 118 N.M. 234, 243, 880 P.2d 845, 854, cert. denied 513 U.S. 936 (1994). With respect to subcontractor bonding, the Subcontractors Fair Practices Act, NMSA 1978, §§ 13-4-31 to -42 (1988 as amended through 2005), employs a clear and limited definition of "subcontractor." As used in that Act, the term "contractor" is defined to mean the "prime contractor on a public works construction project," and the term "subcontractor" is defined to mean "a contractor who contracts directly with the contractor." § 13-4-33 (A) and (B). Therefore, under the Subcontractors Fair Practices Act...

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