SENATE BILL 717
48th legislature - STATE OF NEW MEXICO - first session, 2007
INTRODUCED BY
James G. Taylor
AN ACT
RELATING TO FINANCE; CREATING AN EXEMPTION FROM THE GOVERNMENTAL GROSS RECEIPTS TAX FOR UNIVERSITY RECEIPTS FROM THE IMPOSITION OF AN ATHLETIC FACILITY SURCHARGE; ENACTING THE UNIVERSITY ATHLETIC FACILITY FUNDING ACT; PERMITTING CERTAIN UNIVERSITIES TO ISSUE REVENUE BONDS; AUTHORIZING CERTAIN UNIVERSITIES TO IMPOSE A SURCHARGE ON REVENUES ARISING FROM ACTIVITIES AT UNIVERSITY ATHLETIC FACILITIES; MAKING AN APPROPRIATION; DECLARING AN EMERGENCY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. A new section of the Gross Receipts and Compensating Tax Act is enacted to read:
"[NEW MATERIAL] EXEMPTION--GROSS RECEIPTS TAX AND GOVERNMENTAL GROSS RECEIPTS TAX--ATHLETIC FACILITY SURCHARGE.--Exempted from the gross receipts tax and from the governmental gross receipts tax are the receipts of a university from an athletic facility surcharge imposed pursuant to the University Athletic Facility Funding Act."
Section 2. [NEW MATERIAL] SHORT TITLE.--Sections 2 through 11 of this act may be cited as the "University Athletic Facility Funding Act".
Section 3. [NEW MATERIAL] DEFINITIONS.--As used in the University Athletic Facility Funding Act:
A. "athletic facility revenues" means rentals, receipts, fees or other charges imposed by and paid to a university for the rights to use, operate or manage a university athletic facility by any person;
B. "athletic facility surcharge" means a surcharge to be included in each vendor contract on tickets, parking, souvenirs, concessions, programs, advertising, merchandise, corporate suites or boxes, broadcast revenues and all other products or services sold at or related to a university athletic facility or related to activities occurring at a university athletic facility;
C. "board" means the board of regents of a university;
D. "bonds" means athletic facility revenue bonds issued by a university to pay for some or all of the costs of designing, purchasing, constructing, remodeling, rehabilitating, renovating, improving, equipping and furnishing a university athletic facility;
E. "president" means the president of a university or a person designated by the president of a university;
F. "university" means a four-year post-secondary educational institution confirmed by Article 12, Section 11 of the constitution of New Mexico and the main campus of which is located in a class A county;
G. "university athletic facility" means an indoor or outdoor athletic facility, including buildings and related improvements, primarily designed and intended for university sporting events, but also available for non-university sporting events and university and community cultural, educational and entertainment events;
H. "vendor" means every person, corporation, partnership or other entity, including a division or department of a university, providing products or services sold at or related to a university athletic facility; and
I. "vendor contract" means a written arrangement between a university and a vendor pursuant to which the vendor provides products or services sold at or related to the university athletic facility.
Section 4. [NEW MATERIAL] ISSUANCE OF BONDS.--
A. With the approval of the higher education department and the state board of finance, pursuant to a resolution of the board of regents, a university that has imposed an athletic facility surcharge may issue athletic facility revenue bonds to pay for some or all of the costs of designing, purchasing, constructing, remodeling, renovating, rehabilitating, improving, equipping or furnishing a university athletic facility that has a seating capacity of twelve thousand or more.
B. The bonds shall bear interest at a rate or rates as authorized in the Public Securities Act, and the first interest payment may be for any period authorized in the Public Securities Act.
C. The bonds shall be secured by athletic facility revenues and athletic facility surcharge receipts.
D. The university shall establish an "athletic facility bonding fund" for deposit of all athletic facility revenues and athletic facility surcharge proceeds. Money in the fund may be used to pay:
(1) payments of principal, interest or prior redemption premiums due in connection with, and any other charges pertaining to, the bonds, including payments into any sinking fund or reserve fund required by the bond resolution;
(2) costs of operating a university athletic facility during the life of the bonds, provided that no such costs shall be paid if there are current payments due pursuant to Paragraph (1) of this subsection;
(3) costs of constructing, renovating, equipping, maintaining or improving a university athletic facility, provided that no such costs shall be paid if there are current payments due pursuant to Paragraph (1) of this subsection; or
(4) costs of collecting or administering the athletic facility surcharge, provided that no such costs shall be paid if there are current payments due pursuant to Paragraph (1) of this subsection.
E. Bonds issued pursuant to the University Athletic Facility Funding Act shall be payable solely from the athletic facility bonding fund and do not create an obligation or indebtedness of the state within the meaning of any constitutional provision. A breach of any contractual obligation incurred pursuant to that act shall not impose a pecuniary liability or a charge upon the general credit or taxing power of the state, and the bonds are not general obligations for which the state's full faith and credit is pledged.
F. The state does hereby pledge that the athletic facility bonding fund shall be used only for the purposes specified in this section and pledged first to pay the debt service on the bonds. The state further pledges that any law authorizing the imposition of the athletic facility surcharge and the dedication of revenues to the fund shall not be amended or repealed or otherwise modified so as to impair the bonds to which the fund is dedicated as provided in this section. The university shall not repeal, amend or otherwise modify the bond resolution or the resolution imposing the athletic facility surcharge in such a manner that adversely affects or impairs the athletic facility surcharge or any bonds secured by a pledge of the athletic facility revenues and athletic facility surcharge receipts unless the bonds have been paid in full or provisions have been made for full payment.
Section 5. [NEW MATERIAL] ATHLETIC FACILITY REVENUE BONDS--FULL AUTHORITY TO ISSUE--BONDS ARE LEGAL INVESTMENTS.--
A. The University Athletic Facility Bonding Act shall, without reference to any other act of the legislature, be full authority for the issuance and sale of athletic facility revenue bonds, which bonds shall have all the qualities of investment securities under the Uniform Commercial Code and shall not be invalid for any irregularity or defect or be contestable in the hands of bona fide purchasers or holders of the bonds for value.
B. Athletic facility revenue bonds are legal investments for any person or board charged with the investment of any public funds and are acceptable as security for any deposit of public money.
Section 6. [NEW MATERIAL] BONDS TAX EXEMPT.--All athletic facility revenue bonds shall be exempt from taxation by the state or any of its political subdivisions.
Section 7. [NEW MATERIAL] AUTHORIZATION OF SURCHARGE AND OTHER FEES--USE OF PROCEEDS--TRANSFER.--
A. The board may establish by resolution an athletic facility surcharge of not less than five percent of the revenues received by a vendor pursuant to each vendor contract entered into by the university.
B. The athletic facility surcharge shall be imposed only for the period necessary for payment of principal and interest on the bonds issued to accomplish the purpose for which the revenue is dedicated, but the period shall not exceed thirty years from the date of the resolution imposing the surcharge.
C. A university that has established an athletic facility surcharge shall include the surcharge in the terms of each vendor contract into which it enters.
D. A university may establish charges and fees deemed necessary by the board or the president for the use, operation or management of a university athletic facility by a person other than the university.
Section 8. [NEW MATERIAL] COLLECTION OF ATHLETIC FACILITY SURCHARGE--REMITTANCE TO UNIVERSITY.--
A. Upon the sale of a product or service subject to the athletic facility surcharge, a vendor shall collect the athletic facility surcharge from the purchaser of that product or service on behalf of the university and shall act as a trustee for the surcharge receipts. A purchaser of a product or service subject to the athletic facility surcharge shall be charged separately for the athletic facility surcharge from the cost of the product or service, or the vendor shall institute accounting controls or procedures sufficient to identify the amount of the surcharge owed to a university for each sale, transaction or exchange subject to the surcharge. Receipts from the athletic facility surcharge shall be remitted by a vendor to the president no later than the tenth day of the month following the collection of the surcharge.
B. The president shall deposit university athletic facility revenues and athletic facility surcharge receipts into the athletic facility bonding fund and act as trustee of the revenue on behalf of bondholders pursuant to the University Athletic Facility Funding Act so long as any bonds remain outstanding.
Section 9. [NEW MATERIAL] AUDITS.--The board shall provide by resolution a method to audit or otherwise ensure that vendors subject to the athletic facility surcharge collect and remit to the president the full amount of the surcharge receipts due to the university.
Section 10. [NEW MATERIAL] ENFORCEMENT--PENALTIES.--
A. An action to enforce the imposition and collection of an athletic facility surcharge by a vendor may be brought by a university.
B. A district court may issue an appropriate judgment, order or remedy to enforce the provisions of a vendor contract.
C. A judgment issued by a district court requiring athletic facility surcharge receipts to be paid to a university by a vendor shall also award interest at an annual rate of twelve percent on past due amounts, attorney fees and costs to a university.
Section 11. [NEW MATERIAL] LIBERAL INTERPRETATION.--The University Athletic Facility Funding Act shall be liberally construed to carry out its purpose.
Section 12. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.
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