HOUSE FLOOR SUBSTITUTE FOR
HOUSE APPROPRIATIONS AND FINANCE COMMITTEE SUBSTITUTE FOR
HOUSE BILL 672
54th legislature - STATE OF NEW MEXICO - first session, 2019
AN ACT
RELATING TO THE PUBLIC PEACE, HEALTH, SAFETY AND WELFARE; PROVIDING CAPITAL OUTLAY, MAINTENANCE AND EDUCATIONAL TECHNOLOGY FUNDING FOR IMPACT AID SCHOOL DISTRICTS AND CHARTER SCHOOLS; PROVIDING A DELAYED REPEAL; MAKING AN APPROPRIATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. A new section of the Severance Tax Bonding Act is enacted to read:
"[NEW MATERIAL] BONDING CAPACITY--AUTHORIZATION FOR SEVERANCE TAX BONDS--PRIORITY FOR IMPACT AID SCHOOL DISTRICT AND CHARTER SCHOOL PROJECTS.--
A. By January 15 of each year, the division shall estimate the amount of bonding capacity available for severance tax bonds to be authorized by the legislature.
B. The division shall allocate ten percent of the estimated bonding capacity each year for capital outlay projects for impact aid school districts, and the legislature shall authorize the state board of finance to issue severance tax bonds in the annually allocated amount for use by the public school capital outlay council to fund impact aid school district and charter school capital outlay projects. The public school capital outlay council shall certify to the state board of finance the need for issuance of bonds for impact aid school district projects. The state board of finance may issue and sell the bonds in the same manner as other severance tax bonds in an amount not to exceed the authorized amount provided for in this subsection. If necessary, the state board of finance shall take the appropriate steps to comply with the federal Internal Revenue Code of 1986, as amended. Proceeds from the sale of the bonds are appropriated to the public school facilities authority for the purposes certified by the public school capital outlay council to the state board of finance.
C. Each impact aid school district shall receive its proportionate share of severance tax bonding capacity based on its proportionate share of impact aid basic support payments received by all school districts from June 1 of the previous year to May 31 of the current year. If an impact aid school district has a particularly expensive capital improvement project for which the school district does not have enough bonding capacity to complete a functional phase or to complete the project, it may hold its bonding capacity until there is enough to issue bonds for a phase or the complete project.
D. An impact aid school district may use bond proceeds as the required match for receiving funding from the public school capital outlay council pursuant to the Public School Capital Outlay Act.
E. Money from the severance tax bonds provided for in this section shall not be used to pay indirect project costs. Any unexpended balance from proceeds of severance tax bonds issued for an impact aid school district project shall revert to the severance tax bonding fund within six months of completion of the project. The public school facilities authority shall monitor and ensure proper reversions of the bond proceeds appropriated for impact aid school district projects.
F. The public school capital outlay council shall take project applications from impact aid school districts and shall rank the projects in order of importance based on the districts' five-year facilities plans.
G. As used in this section:
(1) "division" means the board of finance division of the department of finance and administration; and
(2) "impact aid school district" means a school district that has applied for and received basic support payments from the federal government as assistance to those areas affected by federal activity authorized in accordance with Title 20 of the United States Code, commonly known as "P.L. 874 funds" or "impact aid", for the last three years."
SECTION 2. A new Section 22-25-9.1 NMSA 1978 is enacted to read:
"22-25-9.1. [NEW MATERIAL] STATE DISTRIBUTION TO IMPACT AID SCHOOL DISTRICTS AND CHARTER SCHOOLS IMPOSING TAX UNDER CERTAIN CIRCUMSTANCES.--
A. As used in this section, "impact aid school district" means a school district that has applied for and received basic support payments from the federal government as assistance to those areas affected by federal activity authorized in accordance with Title 20 of the United States Code, commonly known as "P.L. 874 funds" or "impact aid" for the last three years; provided that the amount of basic support payments that are deducted from the school district's calculated program cost pursuant to the Public School Finance Act comprise at least two percent of the impact aid school district's program cost.
B. All impact aid school districts that receive a distribution pursuant to Section 22-25-9 NMSA 1978 shall also receive the distribution provided for in this section.
C. Except as provided in Subsection E of this section, the secretary shall distribute to any impact aid school district that has imposed a tax pursuant to the Public School Capital Improvements Act an amount from the public school capital improvements fund that is equal to the amount by which the revenue estimated to be received from the imposed tax, using prior year valuations, at the rate certified by the department of finance and administration in accordance with Section 22-25-7 NMSA 1978, assuming a one-hundred-percent collection rate, is less than an amount calculated by multiplying an average of the impact aid school district's prior year second and third reporting dates' total program units by the amount specified in Subsection D of this section and further multiplying the product obtained by the tax rate approved by the qualified electors in the most recent election on the question of imposing a tax under the Public School Capital Improvements Act. The distribution shall be made each year that the tax is imposed in accordance with Section 22-25-7 NMSA 1978. In the event that sufficient funds are not available in the public school capital improvements fund to make the state distribution provided for in this section, the dollar per program unit figure shall be reduced as necessary.
D. In calculating the state distribution pursuant to Subsection C of this section, one hundred seventy-five dollars ($175) shall be used for fiscal year 2020, and in each subsequent fiscal year that amount shall equal the amount for the previous fiscal year adjusted by the percentage increase between the next preceding calendar year and the preceding calendar year of the consumer price index for the United States, all items, as published by the United States department of labor.
E. Notwithstanding the amount calculated to be distributed pursuant to Subsections C and D of this section, for any fiscal year an impact aid school district, the voters of which have approved a tax pursuant to Section 22-25-3 NMSA 1978, shall not receive a distribution less than the amount calculated pursuant to Subsection F of this section multiplied by the average of the impact aid school district's prior year second and third reporting dates' total program units and further multiplying the product obtained by the approved tax rate; provided that every impact aid school district shall be guaranteed to receive a minimum distribution of five hundred thousand dollars ($500,000) if the calculation pursuant to Subsection C of this section results in a distribution of less than five hundred thousand dollars ($500,000).
F. For purposes of calculating the minimum distribution pursuant to Subsection E of this section, the amount used in that subsection shall equal nine dollars fifty cents ($9.50) for fiscal year 2020 and in each subsequent fiscal year shall equal the amount for the previous fiscal year adjusted by the percentage increase between the next preceding calendar year and the preceding calendar year of the consumer price index for the United States, all items, as published by the United States department of labor.
G. In expending distributions made pursuant to this section, impact aid school districts and charter schools shall give priority to maintenance projects, including payments under contracts with regional education cooperatives for maintenance support services. In addition, distributions made pursuant to this section may be expended for the impact aid school district portion of payments made under a financing agreement entered into by an impact aid school district or a charter school for the leasing of a building or other real property with an option to purchase for a price that is reduced according to payments made, or if the impact aid school district has received a grant for the state share of the payments pursuant to Subsection D of Section 22-24-5 NMSA 1978.
H. A portion of each distribution made by the state pursuant to this section on or after July 1, 2019 shall be further distributed by the impact aid school district to each locally or state-chartered charter school geographically located within the impact aid school district. The amount to be distributed to each charter school shall be in the same proportion as the average full-time-equivalent enrollment of the charter school on the second and third reporting dates of the prior school year is to the total such enrollment in the impact aid school district; provided that no distribution shall be made to an approved charter school that has not commenced classroom instruction in the prior school year. Each year, the department shall certify to the impact aid school district the amount to be distributed to each charter school. Distributions received by a charter school pursuant to this subsection shall be expended pursuant to the provisions of the Public School Capital Improvements Act, except that if capital improvements for the charter school were not identified in a resolution approved by the electors, the charter school may expend the distribution for any capital improvements, including those specified in Subsection G of this section.
I. In determining an impact aid school district's total program units pursuant to Subsections C and E of this section, program units generated by students attending a locally or state-chartered charter school geographically located within the school district shall be included.
J. In determining an impact aid school district's total enrollment pursuant to Subsection H of this section, students attending a locally or state-chartered charter school shall be included.
K. In making distributions pursuant to this section, the secretary shall include such reporting requirements and conditions as are required by rule of the public school capital outlay council. The council shall adopt such requirements and conditions as are necessary to ensure that the distributions are expended in the most prudent manner possible and are consistent with the original purpose as specified in the authorizing resolution. Copies of reports or other information received by the secretary in response to the requirements and conditions shall be forwarded to the council."
SECTION 3. A new section of the Technology for Education Act is enacted to read:
"[NEW MATERIAL] IMPACT AID EDUCATIONAL TECHNOLOGY FUND-- CREATED.--The "impact aid educational technology fund" is created as a nonreverting fund in the state treasury. Money in the fund is appropriated to the department for the purpose of implementing Section 4 of this 2019 act, and money in the fund shall be distributed in the manner provided in that section. Money in the fund shall be expended on warrants issued by the department of finance and administration pursuant to vouchers signed by the chief or the secretary."
SECTION 4. A new section of the Technology for Education Act is enacted to read:
"[NEW MATERIAL] IMPACT AID EDUCATIONAL TECHNOLOGY FUND-- DISTRIBUTION.--
A. As used in this section:
(1) "impact aid school district" means a school district that has applied for and received basic support payments from the federal government as assistance to those areas affected by federal activity authorized in accordance with Title 20 of the United States Code, commonly known as "P.L. 874 funds" or "impact aid", for the last three years; provided that the amount of basic support payments that are deducted from the school district's calculated program cost pursuant to the Public School Finance Act comprise at least two percent of the impact aid school district's program cost; and
(2) "membership" means the total enrollment of qualified students, as defined in the Public School Finance Act on the current roll of class or school on a specified day. The current roll is established by the addition of original entries and reentries minus withdrawals. Withdrawal of students, in addition to students formally withdrawn from the public school, includes students absent from the public school for as many as ten consecutive school days. Membership for a school district that qualifies for a distribution from the impact aid educational technology fund includes the membership of locally chartered charter schools geographically located within the school district.
B. Upon annual review and approval of an impact aid school district's educational technology plan, the bureau shall determine a separate distribution from the impact aid educational technology fund for each impact aid school district.
C. On or before July 31 of each year, the bureau shall distribute money in the impact aid educational technology fund directly to each impact aid school district in an amount equal to ninety percent of the impact aid school district's estimated adjusted entitlement calculated pursuant to Subsection D of this section. An impact aid school district's unadjusted entitlement is that portion of the total amount of the annual appropriation that the projected membership bears to the projected total membership of all impact aid school districts. Kindergarten membership shall be calculated on a one-half full-time-equivalent basis.
D. An impact aid school district's estimated adjusted entitlement shall be calculated by the bureau using the following procedure:
(1) a base allocation is calculated by multiplying the total annual appropriation by seventy-five thousandths percent;
(2) the estimated adjusted entitlement amount for an impact aid school district whose unadjusted entitlement is at or below the base allocation shall be equal to the base allocation. For an impact aid school district whose unadjusted entitlement is higher than the base allocation, the estimated adjusted entitlement shall be calculated pursuant to Paragraphs (3) through (6) of this subsection;
(3) the total projected membership in those school districts that will receive the base allocation pursuant to Paragraph (2) of this subsection is subtracted from the total projected membership of all impact aid school districts;
(4) the total of the estimated adjusted entitlement amounts that will be distributed to those school districts receiving the base allocation pursuant to Paragraph (2) of this subsection is subtracted from the total appropriation;
(5) the projected membership for the impact aid school district is divided by the result calculated pursuant to Paragraph (3) of this subsection; and
(6) the estimated adjusted entitlement amount for the impact aid school district equals the number calculated pursuant to Paragraph (5) of this subsection multiplied by the value calculated pursuant to Paragraph (4) of this subsection.
E. On or before January 30 of each year, the bureau shall recompute each adjusted entitlement using the final funded membership for that year and, without making any additional reductions, shall allocate the balance of the annual appropriation adjusting for any over- or under-projection of membership.
F. An impact aid school district receiving funding pursuant to the Technology for Education Act is responsible for the purchase, distribution, use and maintenance of educational technology.
G. A portion of each distribution made by the state pursuant to this section shall be further distributed by the school district to each locally or state-chartered charter school geographically located within the school district that has a department-approved educational technology plan. The amount to be distributed to each charter school shall be in the same proportion as the average full-time-equivalent enrollment of the charter school on the second and third reporting dates of the prior school year is to the total such enrollment in the impact aid school district; provided that no distribution shall be made to an approved charter school that has not commenced classroom instruction in the prior school year. Each year, the department shall certify to an impact aid school district the amount to be distributed to each charter school. Distributions received by a charter school pursuant to this subsection shall be expended pursuant to the provisions of the Technology for Education Act."
SECTION 5. DELAYED REPEAL.--Section 1 of this act is repealed effective June 30, 2034.
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