Capital outlay is funded by the proceeds from Severance Tax Bonds (STB), non-recurring revenue in the general fund, or general obligation bonds.  Typical capital outlay projects as administered through NMDOT include planning, design, and construction of street and/or drainage improvements, ROW acquisition, and materials. Items such as operating costs, salaries, brochures, and publications do not qualify for capital outlay funding. State-funded projects are requested through the New Mexico Legislature annually. The Local Entity should work with their respective District Coordinator on state funding scenarios to ensure compliance with all regulations.