Committee Substitute for HB0006TRS

HOUSE TAXATION AND REVENUE COMMITTEE SUBSTITUTE FOR

HOUSE BILL 6

49th legislature - STATE OF NEW MEXICO - second special session, 2010

AN ACT

RELATING TO PUBLIC FINANCE; PROVIDING AN ADDITIONAL PURPOSE FOR SUPPLEMENTAL SEVERANCE TAX BONDS; AUTHORIZING THE ISSUANCE OF SEVERANCE TAX BONDS AND SUPPLEMENTAL SEVERANCE TAX BONDS; RECONCILING CONFLICTING AMENDMENTS TO THE SAME SECTION OF LAW IN LAWS 2001 BY REPEALING LAWS 2001, CHAPTER 37, SECTION 1; MAKING APPROPRIATIONS, INCLUDING AN APPROPRIATION TO THE STATE EQUALIZATION GUARANTEE DISTRIBUTION AND A CONTINGENT APPROPRIATION FOR MEDICAID EXPENDITURES; DECLARING AN EMERGENCY.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. Section 7-27-12 NMSA 1978 (being Laws 1961, Chapter 5, Section 10, as amended by Laws 2001, Chapter 37, Section 1 and by Laws 2001, Chapter 338, Section 1) is amended to read:

"7-27-12. WHEN SEVERANCE TAX BONDS TO BE ISSUED.--

A. The state board of finance shall issue and sell all severance tax bonds when authorized to do so by any law that sets out the amount of the issue and the recipient of the money.

B. The state board of finance shall also issue and sell severance tax bonds authorized by Sections 72-14-36 through 72-14-42 NMSA 1978, and such authority as has been given to the interstate stream commission to issue and sell such bonds is transferred to the state board of finance. The state board of finance shall issue and sell all severance tax bonds only when so instructed by resolution of the governing body or by written direction from an authorized officer of the recipient of the bond money.

C. Except as provided in Subsection D or E of this section, proceeds from supplemental severance tax bonds shall be used only for public school capital outlay projects pursuant to the Public School Capital Outlay Act or the Public School Capital Improvements Act.

D. Proceeds from supplemental severance tax bonds issued pursuant to Paragraph (2) of Subsection A of Section 19 of Chapter 6 of Laws 1999 (1st S.S.) shall be used for the purposes specified in that paragraph.

E. Proceeds from supplemental severance tax bonds issued pursuant to Section 2 of this 2010 act shall be used for the purposes specified in that section.

[E.] F. Except as provided in Subsection [F] G or H of this section, the state board of finance shall issue and sell all supplemental severance tax bonds when so instructed by resolution of the public school capital outlay council pursuant to Section 7-27-12.2 NMSA 1978.

[F.] G. The state board of finance shall issue and sell supplemental severance tax bonds authorized by Paragraph (2) of Subsection A of Section 19 of Chapter 6 of Laws 1999 (1st S.S.) when so instructed by resolution of the [commission on] higher education department.

H. The state board of finance shall issue and sell the supplemental severance tax bonds authorized in Section 2 of this 2010 act upon the certification of the secretary of public education or the secretary of finance and administration as applicable."

Section 2. [NEW MATERIAL] SHORT-TERM SEVERANCE TAX BONDS--SHORT-TERM SUPPLEMENTAL SEVERANCE TAX BONDS-- AUTHORIZATIONS--APPROPRIATION OF PROCEEDS.--

A. As used in this section:

(1) "general fund consensus revenue forecast" means the revenue estimates prepared by the career economists of the department of finance and administration, taxation and revenue department, department of transportation and legislative finance committee; and

(2) "reserves" means the total balances in the funds designated as the reserve funds of the state as a percentage of current-year recurring appropriations as shown in the general fund financial summary released by the department of finance and administration in conjunction with the general fund consensus revenue forecast.

B. In fiscal year 2011, the state board of finance may issue and sell severance tax bonds with a term that does not extend beyond the end of the fiscal year or supplemental severance tax bonds with a term that does not extend beyond the end of the fiscal year, or a combination of severance tax bonds and supplemental severance tax bonds, in compliance with the Severance Tax Bonding Act, in an aggregate amount not to exceed one hundred ten million three hundred thousand dollars ($110,300,000) when the secretary of finance and administration or, with respect to Paragraph (1) of this subsection, the secretary of public education, certifies that the bonds are needed because:

(1) the general fund portion of the state equalization guarantee distribution in fiscal year 2011 is lower than the general fund portion of the state equalization guarantee distribution in fiscal year 2009; provided that the maximum amount that can be certified pursuant to this paragraph is twenty-five million dollars ($25,000,000);

(2) a general fund consensus revenue forecast released during fiscal year 2011 projects revenue that will result in reserves of less than five percent at the end of fiscal year 2011, provided that:

(a) the maximum amount that can be certified for pursuant to this paragraph is the amount needed to bring projected reserves to five percent; and

(b) the secretary of finance and administration may make multiple certifications pursuant to this paragraph as general fund consensus revenue forecasts are released during fiscal year 2011; or

(3) federal legislation has not been enacted prior to January 1, 2011 that extends, through June 30, 2011, the increase to the federal medical assistance percentage provided in Subsection (a), (b) or (c) of Section 5001 of the federal American Recovery and Reinvestment Act of 2009, provided that the maximum amount that can be certified for pursuant to this paragraph is the difference between:

(a) the amount of federal medicaid funds the state is estimated to have received in fiscal year 2011 had the increase to the federal medical assistance percentage been extended through June 30, 2011; and

(b) the amount of federal medicaid funds the state is estimated to actually receive in fiscal year 2011 without the extended increase.

C. The state board of finance shall schedule the issuance and sale of the bonds in the most expeditious and economical manner possible. The state board of finance shall further take the appropriate steps necessary to comply with the Internal Revenue Code of 1986, as amended. Proceeds from the sale of the bonds are appropriated to the general fund. The board of finance division of the department of finance and administration shall transfer the proceeds to the general fund for use by the department of finance and administration in fiscal year 2011 to restore the allotments made from the general fund for capital project general fund appropriations that were enacted in prior sessions of the legislature and that had an expenditure period ending on or after June 30, 2010.

Section 3. [NEW MATERIAL] FISCAL YEAR 2011 GENERAL FUND APPROPRIATIONS FOR THE STATE EQUALIZATION GUARANTEE DISTRIBUTION AND MEDICAID.--

A. In the event the secretary of public education certifies the need for the bonds pursuant to Paragraph (1) of Subsection B of Section 2 of this 2010 act, twenty-five million dollars ($25,000,000) is appropriated from the general fund for expenditure during fiscal year 2011 to the state equalization guarantee distribution.

B. In the event the secretary of finance and administration certifies the need for the bonds pursuant to Paragraph (3) of Subsection B of Section 2 of this 2010 act, the following amounts are appropriated from the general fund for expenditure during fiscal year 2011 to the following agencies for the following purposes:

(1) up to seventy-six million two hundred thousand dollars ($76,200,000) is appropriated to the medical assistance program of the human services department for medicaid; provided that the amount of the appropriation, up to the maximum, shall equal the difference, as calculated by the secretary of finance and administration in consultation with the director of the legislative finance committee, between:

(a) the amount of federal medicaid funds the medical assistance program is estimated to have received in fiscal year 2011 had the increase to the federal medical assistance percentage provided in Subsection (a), (b) or (c) of Section 5001 of the federal American Recovery and Reinvestment Act of 2009 been extended through June 30, 2011 by federal legislation enacted prior to January 1, 2011; and

(b) the amount of federal medicaid funds the medical assistance program is estimated to actually receive in fiscal year 2011 without the extended increase; and

(2) up to nine million one hundred thousand dollars ($9,100,000) is appropriated to the developmental disabilities support program of the department of health for medicaid waiver programs; provided that the amount of the appropriation, up to the maximum, shall equal the difference, as calculated by the secretary of finance and administration in consultation with the director of the legislative finance committee, between:

(a) the amount of federal medicaid funds the developmental disabilities support program is estimated to have received in fiscal year 2011 had the increase to the federal medical assistance percentage provided in Subsection (a), (b) or (c) of Section 5001 of the federal American Recovery and Reinvestment Act of 2009 been extended through June 30, 2011 by federal legislation enacted prior to January 1, 2011; and

(b) the amount of federal medicaid funds the developmental disabilities support program is estimated to actually receive in fiscal year 2011 without the extended increase.

C. Any unexpended balances of the appropriations made in Subsection A or B of this section at the end of fiscal year 2011 shall revert to the general fund by October 1, 2011.

Section 4. [NEW MATERIAL] SHORT-TERM SEVERANCE TAX BONDS ISSUED IN FISCAL YEAR 2011 FOR PUBLIC SCHOOL CAPITAL OUTLAY PROJECTS.--In addition to the bonds issued pursuant to Section 7-27-14 NMSA 1978 and notwithstanding the limitations of that section, in compliance with the Severance Tax Bonding Act, in fiscal year 2011 the state board of finance may issue and sell severance tax bonds with a term that does not extend beyond the fiscal year in which they are issued when the public school capital outlay council certifies by resolution that proceeds of the bonds are needed for expenditures relating to public school capital outlay projects pursuant to the Public School Capital Outlay Act. The resolution shall specify the total amount needed. The proceeds from the sale of the bonds are appropriated to the public school capital outlay fund to carry out the provisions of the Public School Capital Outlay Act; provided that:

A. the amount of bonds issued pursuant to this section shall not exceed the lesser of:

(1) the amount of supplemental severance tax bonds issued pursuant to Section 2 of this 2010 act;

(2) the amount specified in the resolution of the public school capital outlay council; or

(3) the maximum amount of bonds that can be issued after satisfying the criteria of Subsections B and C of this section;

B. no severance tax bonds shall be issued pursuant to this section until all other severance tax bonds and supplemental severance tax bonds to be issued in fiscal year 2011 have been issued; and

C. no severance tax bonds shall be issued pursuant to this section unless the balance in the severance tax bonding fund as of the date that the bonds are issued is greater than the sum of:

(1) the debt service on the severance tax bonds to be issued pursuant to this section;

(2) the debt service scheduled to be paid during the remainder of the fiscal year on all outstanding severance tax bonds and supplemental severance tax bonds; and

(3) the amount necessary to meet all principal and interest payments on outstanding bonds payable from the severance tax bonding fund on the next two ensuing semiannual payment dates.

Section 5. REPEAL.--Laws 2001, Chapter 37, Section 1 is repealed.

Section 6. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.

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