0001|                           SENATE BILL 476
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0002|     43rd legislature - STATE OF NEW MEXICO - first session, 1997
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0003|                            INTRODUCED BY
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0004|                          RICHARD M. ROMERO
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0005|     
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0006|                                   
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0007|     
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0008|                                   
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0009|     
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0010|                                AN ACT
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0011|     RELATING TO PUBLIC SCHOOLS; PROVIDING FOR A LOCAL OPTION
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0012|     PROPERTY TAX FOR SCHOOL DISTRICT OPERATIONAL PURPOSES; CREATING
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0013|     A FUND; PROVIDING FOR DISTRIBUTION; AMENDING AND ENACTING
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0014|     SECTIONS OF THE NMSA 1978; MAKING AN APPROPRIATION; DECLARING
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0015|     AN EMERGENCY.
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0016|     
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0017|     BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0018|          Section 1.  [<u>NEW MATERIAL</u>]  SHORT TITLE.--Sections 1
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0019|     through 7 of this act may be cited as the "Local Operational
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0020|     School Levy Act".
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0021|          Section 2.  [<u>NEW MATERIAL</u>]  DEFINITIONS.--As used in the
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0022|     Local Operational School Levy Act:
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0023|               A.  "department" means the state department of
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0024|     public education;
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0025|               B.  "forty-day program costs" means program costs,
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0001|     as defined in the Public School Finance Act, for any school
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0002|     district as calculated using membership, as defined in the
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0003|     Public School Finance Act, on the fortieth day of the
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0004|     applicable school year in that school district; 
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0005|               C.  "local school board" means the governing body of
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0006|     a school district;
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0007|               D.  "operational purposes" means those expenditure
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0008|     categories for the general operation of a school district that
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0009|     are defined in state board of education regulations for uniform
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0010|     financial accounting and budgeting for New Mexico school
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0011|     districts; 
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0012|               E.  "superintendent" means the superintendent of
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0013|     public instruction; and
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0014|               F.  "taxable value of property" means the sum of the
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0015|     following:
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0016|                    (1)  the "net taxable value", as that term is
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0017|     defined in the Property Tax Code, of property subject to
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0018|     taxation under the Property Tax Code;
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0019|                    (2)  the "assessed value" of "products" as
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0020|     those terms are defined in the Oil and Gas Ad Valorem
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0021|     Production Tax Act; 
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0022|                    (3)  the "assessed value" of "equipment" as
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0023|     those terms are defined in the Oil and Gas Production Equipment
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0024|     Ad Valorem Tax Act; and
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0025|                    (4)  the "taxable value" of "copper mineral
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0001|     property" as those terms are defined in the Copper Production
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0002|     Ad Valorem Tax Act.
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0003|          Section 3.  [<u>NEW MATERIAL</u>]  LOCAL SCHOOL BOARD--
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0004|     AUTHORIZATION TO IMPOSE A TAX FOR SCHOOL DISTRICT OPERATIONAL
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0005|     PURPOSES--RESOLUTION--ELECTION REQUIRED.--
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0006|               A.  A local school board may adopt a resolution
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0007|     authorizing, for school district operational purposes, the
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0008|     imposition of a property tax upon the taxable value of property
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0009|     in the school district.  The total tax imposition that may be
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0010|     authorized under the Local Operational School Levy Act shall
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0011|     not exceed a rate of four dollars ($4.00) on each one thousand
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0012|     dollars ($1,000) of taxable value of property in the school
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0013|     district.
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0014|               B.  The tax authorized pursuant to Subsection A of
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0015|     this section shall not be imposed unless the question of
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0016|     authorizing the imposition of the tax is submitted to the
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0017|     voters of the district.  The local school board shall not
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0018|     submit to the voters at any one election a question authorizing
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0019|     the imposition of a tax under the Local Operational School Levy
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0020|     Act at a rate greater than two dollars ($2.00) on each one
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0021|     thousand dollars ($1,000) of taxable value of property in the
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0022|     school district or for a period of more than ten years. 
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0023|     However, if a tax is imposed pursuant to approval at a special
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0024|     school district election prior to the 1999 regular school
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0025|     district election, the period for which the tax is imposed
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0001|     shall be for a period ending no later than December 31, 2007.
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0002|               C.  During the three years prior to the expiration
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0003|     of any period during which a tax has been authorized to be
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0004|     imposed pursuant to the Local Operational School Levy Act, the
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0005|     local school board may adopt a resolution under Subsection A of
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0006|     this section and submit to the voters of the district the
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0007|     question of authorizing the imposition of a tax under that act
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0008|     for an additional period not to exceed ten years with the tax
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0009|     to be certified and first imposed for the period immediately
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0010|     succeeding the last year of the period the tax was previously
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0011|     authorized to be imposed.
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0012|               D.  Any resolution adopted pursuant to Subsection A
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0013|     of this section shall specify:
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0014|                    (1)  the rate of the proposed tax;
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0015|                    (2)  the date a referendum will be held to
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0016|     submit the question of imposition of the tax to the voters of
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0017|     the school district;
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0018|                    (3)  the period of time the tax is authorized
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0019|     to be imposed; and
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0020|                    (4)  the proposed use of the revenues from the
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0021|     proposed tax.
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0022|               E.  The local school board shall mail the
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0023|     superintendent a copy of the resolution authorizing a tax
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0024|     pursuant to Subsection A of this section within two weeks
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0025|     following its adoption by the local school board.
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0001|               F.  Any amounts received by the school district
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0002|     under the provisions of the Local Operational School Levy Act
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0003|     shall be expended only for operational purposes of the school
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0004|     district.
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0005|          Section 4.  [<u>NEW MATERIAL</u>]  CONDUCT OF ELECTION--
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0006|     BALLOT.--
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0007|               A.  The question of authorizing the imposition of a
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0008|     tax under the Local Operational School Levy Act shall be
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0009|     submitted to the voters at the first regular school district
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0010|     election following the adoption of a resolution pursuant to
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0011|     Section 3 of the Local Operational School Levy Act.  However,
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0012|     if a local school board deems it necessary, it may call a
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0013|     special school district election to submit to the voters the
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0014|     initial question of the authorization of a tax under the Local
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0015|     Operational School Levy Act.  Thereafter, the question of
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0016|     authorizing the imposition of any additional tax under the
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0017|     Local Operational School Levy Act shall be submitted to the
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0018|     voters only at regular school district elections.
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0019|               B.  The proclamation calling the election shall be
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0020|     filed and published as required under the School Election Law
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0021|     and shall specify:
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0022|                    (1)  the date on which the election will be
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0023|     held;
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0024|                    (2)  the question of whether the imposition of
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0025|     a property tax for school district operational purposes shall
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0001|     be authorized pursuant to the Local Operational School Levy Act
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0002|     at a rate not to exceed the rate specified in the authorizing
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0003|     resolution and for the period specified in that resolution;
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0004|                    (3)  the precincts in each county in which the
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0005|     election is to be held and the location of each polling place;
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0006|                    (4)  the hours each polling place will be open;
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0007|     and 
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0008|                    (5)  the date and time of the closing of the
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0009|     registration books by the county clerk as required by law.
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0010|               C.  The ballot shall include the information
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0011|     specified in Paragraph (2) of Subsection B of this section and
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0012|     shall present the voter the choice of voting "for the local
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0013|     operational school levy" or "against the local operational
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0014|     school levy".
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0015|               D.  The election shall be held, conducted and
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0016|     canvassed pursuant to the School Election Law. 
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0017|               E.  The local school board shall notify the
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0018|     superintendent of the results of the election immediately upon
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0019|     completion of the canvass.
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0020|               F.  Any resolution authorizing a tax pursuant to the
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0021|     Local Operational School Levy Act shall be adopted by a date
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0022|     necessary to assure that the results of the election on the
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0023|     question of imposing the tax shall be certified no later than
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0024|     June 15 of the property tax year for which the tax rates will
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0025|     first be certified.
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0001|          Section 5.  [<u>NEW MATERIAL</u>]  IMPOSITION OF TAX--
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0002|     CERTIFICATION BY DEPARTMENT OF FINANCE AND ADMINISTRATION--
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0003|     DISCONTINUANCE OF TAX.--
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0004|               A.  If a majority of the voters voting on the
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0005|     question votes for a local operational school levy pursuant to
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0006|     a resolution adopted under the Local Operational School Levy
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0007|     Act, the tax shall be imposed for the earliest period for which
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0008|     the tax rate may be certified, except as otherwise provided in
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0009|     that act.  The tax rate shall be certified by the department of
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0010|     finance and administration and imposed, administered and
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0011|     collected in accordance with the provisions of the Oil and Gas
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0012|     Ad Valorem Production Tax Act, the Oil and Gas Production
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0013|     Equipment Ad Valorem Tax Act, the Copper Production Ad Valorem
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0014|     Tax Act and the Property Tax Code.
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0015|               B.  If a majority of the voters voting on the
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0016|     question votes against a local operational school levy, the tax
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0017|     shall not be imposed.  The local school board shall not again
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0018|     adopt a resolution authorizing the imposition of a tax under
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0019|     the Local Operational School Levy Act for at least two years
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0020|     after the date of the resolution that the voters rejected.
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0021|               C.  The department of finance and administration
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0022|     shall not certify the tax rates for taxes authorized pursuant
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0023|     to the Local Operational School Levy Act in any year in which
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0024|     the superintendent certifies by July 1 of that year that money
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0025|     in   the local operational school fund for the next school year
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0001|     is not sufficient to meet the demands on the fund.  The tax
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0002|     rates authorized but not certified shall be certified in the
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0003|     first succeeding year for which the necessary appropriation to
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0004|     the local operational school fund for the next school year has
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0005|     been made.  
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0006|               D.  The department of finance and administration
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0007|     shall not certify the tax rate for a tax authorized pursuant to
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0008|     the Local Operational School Levy Act for any school district
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0009|     in the state in any year in which the state department of
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0010|     public education notifies the department of finance and
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0011|     administration by August 1 that the imposition of the taxes or
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0012|     the use of revenues from the taxes would result in:
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0013|                    (1)  the failure to qualify for certification
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0014|     by the secretary of the United States department of education
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0015|     as having in effect for the tax year in which the tax would
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0016|     otherwise be imposed, administered and collected a program of
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0017|     state aid that equalizes expenditures for free public education
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0018|     among local educational agencies in the state; or
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0019|                    (2)  when computed according to 20 U.S.C.
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0020|     7709(d)(1), a proportion of less than eighty percent in any
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0021|     school district.  
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0022|               E.  The local school board may discontinue by
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0023|     resolution the imposition of any tax authorized pursuant to the
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0024|     Local Operational School Levy Act.  The discontinuance
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0025|     resolution shall be mailed to the department of finance and
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0001|     administration and the superintendent no later than June 15 of
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0002|     the year in which a tax rate pursuant to that act is not to be
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0003|     certified.
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0004|          Section 6.  [<u>NEW MATERIAL</u>]  LOCAL OPERATIONAL SCHOOL
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0005|     FUND CREATED--APPROPRIATION.--There is created in the state
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0006|     treasury the "local operational school fund".  The fund shall
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0007|     be invested as other state funds are invested.  Earnings on
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0008|     balances in the local operational school fund shall be credited
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0009|     to the fund, and amounts in the fund are appropriated for the
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0010|     purposes of the Local Operational School Levy Act.
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0011|          Section 7.  [<u>NEW MATERIAL</u>]  STATE GUARANTEE--STATE
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0012|     DISTRIBUTION--REMITTANCE OF EXCESS AMOUNTS.--
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0013|               A.  The state guarantee for a school district that
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0014|     has imposed a tax pursuant to the Local Operational School Levy
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0015|     Act shall be an amount equal to the product obtained by
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0016|     multiplying two and one-half percent by the tax rate certified
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0017|     pursuant to that act and multiplying that product by the forty-
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0018|     day program cost for the school year beginning in any year a
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0019|     tax rate under that act is certified for that district.
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0020|               B.  The state distribution for a district for a
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0021|     school year is an amount that shall not exceed the state
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0022|     guarantee for that district and that is equal to the amount by
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0023|     which the guarantee exceeds the revenue from the tax imposed in
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0024|     that district pursuant to the Local Operational School Levy Act
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0025|     received during the period beginning June 1 of the year during
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0001|     which a tax rate under that act is certified for the district
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0002|     and ending May 31 of the next year.  If a school district is
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0003|     entitled to a state distribution, the superintendent shall
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0004|     distribute the calculated amount from the local operational
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0005|     school fund to the school district not later than June 30 of
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0006|     the calendar year following the year during which the tax rate
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0007|     was certified.
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0008|               C.  If the revenue received during the period June 1
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0009|     to May 31 from the imposition of the tax authorized by the
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0010|     Local Operational School Levy Act exceeds the state guarantee
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0011|     for the school year during which the revenue was received, the
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0012|     local school board shall remit to the local operational school
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0013|     fund by June 30 of the school year an amount equal to the sum
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0014|     of the amounts derived from the following three calculations:
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0015|                    (1)  one-fourth of the amount of revenue that
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0016|     exceeds one hundred twenty-five percent of the state guarantee
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0017|     but is less than one hundred fifty percent of the state
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0018|     guarantee;
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0019|                    (2)  one-half of the amount of revenue that is
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0020|     one hundred fifty percent or more of the state guarantee but
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0021|     less than one hundred seventy-five percent of the state
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0022|     guarantee; and 
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0023|                    (3)  three-fourths of the amount of revenue
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0024|     that is one hundred seventy-five percent or more of the state
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0025|     guarantee.
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0001|               D.  If the balance in the local operational school
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0002|     fund in any fiscal year is insufficient to pay the sum of the
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0003|     distribution amounts determined to be due to all the school
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0004|     districts entitled to a distribution, the amount necessary to
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0005|     pay all distribution amounts in full shall be transferred from
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0006|     the state support reserve fund to the local operational school
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0007|     fund for distribution to school districts as required pursuant
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0008|     to this section.  However, if there is not a sufficient balance
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0009|     in the state support reserve fund to pay both the full state
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0010|     equalization guarantee distribution and the state distributions
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0011|     under this section, the state equalization guarantee
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0012|     distribution shall be made in full and, based on the amount
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0013|     available in the local operational school fund, each state
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0014|     distribution amount due pursuant to this section shall be
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0015|     reduced proportionately.
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0016|               E.  Distributions to school districts made pursuant
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0017|     to the Local Operational School Levy Act shall be supplemental
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0018|     to state equalization guarantee distributions made pursuant to
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0019|     the Public School Finance Act.  In no fiscal year shall the
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0020|     amount of state funding pursuant to the Public School Finance
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0021|     Act be reduced because of the imposition in one or more school
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0022|     districts of a tax under the Local Operational School Levy Act. 
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0023|     The absence of a distribution to a school district under the
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0024|     Local Operational School Levy Act shall not affect the amount
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0025|     of any state equalization guarantee distributions to that
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0001|     district pursuant to the Public School Finance Act.
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0002|          Section 8.  Section 7-37-7.1 NMSA 1978 (being Laws 1979,
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0003|     Chapter 268, Section 1, as amended) is amended to read:
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0004|          "7-37-7.1.  ADDITIONAL LIMITATIONS ON PROPERTY TAX
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0005|     RATES.--
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0006|               A.  Except as provided in Subsections D and E of
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0007|     this section, in setting the general property tax rates for
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0008|     residential and nonresidential property authorized in
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0009|     Subsection B of Section 7-37-7 NMSA 1978, the other rates and
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0010|     impositions authorized in Paragraphs (2) and (3) of Subsection
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0011|     C of Section 7-37-7 NMSA 1978, except the portion of the rate
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0012|     authorized in Paragraph (1) of Subsection A of Section 4-48B-12
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0013|     NMSA 1978 used to meet the requirements of Section 27-10-4 NMSA
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0014|     1978 <u>and except rates authorized pursuant to the Local
</u>    |
<u></u>0015| <u>    Operational School Levy Act</u>, and benefit assessments
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0016|     authorized by law to be levied upon net taxable value of
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0017|     property, assessed value or a similar term, neither the
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0018|     department of finance and administration nor any other entity
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0019|     authorized to set or impose a rate or assessment shall set a
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0020|     rate or impose a tax or assessment that will produce revenue
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0021|     from either residential or nonresidential property in a
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0022|     particular governmental unit in excess of the sum of a dollar
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0023|     amount derived by multiplying the appropriate growth control
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0024|     factor by the revenue due from the imposition on residential or
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0025|     nonresidential property, as appropriate, for the prior property
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0001|     tax year in the governmental unit of the rate, imposition or
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0002|     assessment for the specified purpose plus, for the calculation
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0003|     for the rate authorized for county operating purposes by
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0004|     Subsection B of Section 7-37-7 NMSA 1978 with respect to
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0005|     residential property, any applicable tax rebate adjustment. 
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0006|     The calculation described in this subsection shall be
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0007|     separately made for residential and nonresidential property. 
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0008|     Except as provided in Subsections D and E of this section, no
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0009|     tax rate or benefit assessment that will produce revenue from
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0010|     either class of property in a particular governmental unit in
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0011|     excess of the dollar amount allowed by the calculation shall be
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0012|     set or imposed.  The rates imposed pursuant to Sections 7-32-4
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0013|     and 7-34-4 NMSA 1978 shall be the rates for nonresidential
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0014|     property that would have been imposed but for the limitations
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0015|     in this section.  As used in this section, "growth control
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0016|     factor" is a percentage equal to the sum of "percent change I"
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0017|     plus V where:
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0018|                    (1)  V = <u>(base year value + net new value)</u>,   
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0019|                                    base year value
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0020|     expressed as a percentage, but if the percentage calculated is
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0021|     less than one hundred percent, then V shall be set and used as
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0022|     one hundred percent;
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0023|                    (2)  "base year value" means the value for
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0024|     property taxation purposes of all residential or nonresidential
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0025|     property, as appropriate, subject to valuation under the
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0001|     Property Tax Code in the governmental unit for the specified
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0002|     purpose in the prior property tax year;
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0003|                    (3)  "net new value" means the additional value
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0004|     of residential or nonresidential property, as appropriate, for
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0005|     property taxation purposes placed on the property tax schedule
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0006|     in the current year resulting from the elements in
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0007|     Subparagraphs (a) through (d) of this paragraph reduced by the
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0008|     value of residential or nonresidential property, as
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0009|     appropriate, removed from the property tax schedule in the
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0010|     current year and, if applicable, the reductions described in
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0011|     Subparagraph (e) of this paragraph:
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0012|                         (a)  residential or nonresidential
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0013|     property, as appropriate, valued in the current year that was
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0014|     not valued at all in the prior year;
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0015|                         (b)  improvements to existing residential
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0016|     or nonresidential property, as appropriate; 
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0017|                         (c)  additions to residential or
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0018|     nonresidential property, as appropriate, or values that were
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0019|     omitted from previous years' property tax schedules even if
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0020|     part or all of the property was included on the schedule, but
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0021|     no additions of values attributable to valuation maintenance
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0022|     programs or reappraisal programs shall be included;
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0023|                         (d)  additions to nonresidential property
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0024|     due to increases in annual net production values of mineral
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0025|     property valued in accordance with Section 7-36-23 or 7-36-25
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0001|     NMSA 1978 or due to increases in market value of mineral
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0002|     property valued in accordance with Section 7-36-24 NMSA 1978;
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0003|     and
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0004|                         (e)  reductions to nonresidential
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0005|     property due to decreases in annual net production values of
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0006|     mineral property valued in accordance with Section 7-36-23 or
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0007|     7-36-25 NMSA 1978 or due to decreases in market value of
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0008|     mineral property valued in accordance with Section 7-36-24 NMSA
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0009|     1978; and
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0010|                    (4)  "percent change I" means a percent not in
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0011|     excess of five percent that is derived by dividing the annual
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0012|     implicit price deflator index for state and local government
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0013|     purchases of goods and services, as published in the United
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0014|     States department of commerce monthly publication entitled
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0015|     "survey of current business" or any successor publication, for
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0016|     the calendar year next preceding the prior calendar year into
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0017|     the difference between the prior year's comparable annual index
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0018|     and that next preceding year's annual index if that difference
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0019|     is an increase, and if the difference is a decrease, the
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0020|     "percent change I" is zero.  In the event that the annual
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0021|     implicit price deflator index for state and local government
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0022|     purchases of goods and services is no longer prepared or
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0023|     published by the United States department of commerce, the
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0024|     department shall adopt by regulation the use of any comparable
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0025|     index prepared by any agency of the United States.
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0001|               B.  If, as a result of the application of the
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0002|     limitation imposed under Subsection A of this section, a
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0003|     property tax rate for residential or nonresidential property,
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0004|     as appropriate, authorized in Subsection B of Section 7-37-7
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0005|     NMSA 1978 is reduced below the maximum rate authorized in that
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0006|     subsection, no governmental unit or entity authorized to impose
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0007|     a tax rate under Paragraph (2) of Subsection C of Section
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0008|     7-37-7 NMSA 1978 shall impose any portion of the rate
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0009|     representing the difference between a maximum rate authorized
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0010|     under Subsection B of Section 7-37-7 NMSA 1978 and the reduced
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0011|     rate resulting from the application of the limitation imposed
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0012|     under Subsection A of this section.
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0013|               C.  If the net new values necessary to make the
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0014|     computation required under Subsection A of this section are not
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0015|     available for any governmental unit at the time the calculation
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0016|     must be made, the department of finance and administration
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0017|     shall use a zero amount for net new values when making the
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0018|     computation for the governmental unit.
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0019|               D.  Any part of the maximum tax rate authorized for
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0020|     each governmental unit for residential and nonresidential
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0021|     property by Subsection B of Section 7-37-7 NMSA 1978 that is
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0022|     not imposed for a governmental unit for any property tax year
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0023|     for reasons other than the limitation required under Subsection
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0024|     A of this section may be authorized by the department of
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0025|     finance and administration to be imposed for that governmental
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0001|     unit for residential and nonresidential property for the
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0002|     following tax year subject to the restriction of Subsection D
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0003|     of Section 7-38-33 NMSA 1978.
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0004|               E.  If the base year value necessary to make the
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0005|     computation required under Subsection A of this section is not
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0006|     available for any governmental unit at the time the calculation
    |
0007|     must be made, the department of finance and administration
    |
0008|     shall set a rate for residential and nonresidential property
    |
0009|     that will produce in that governmental unit a dollar amount
    |
0010|     that is not in excess of the property tax revenue due for all
    |
0011|     property for the prior property tax year for the specified
    |
0012|     purpose of that rate in that governmental unit.
    |
0013|               F.  For the purposes of this section:
    |
0014|                    (1)  "nonresidential property" does not include
    |
0015|     any property upon which taxes are imposed pursuant to the Oil
    |
0016|     and Gas Ad Valorem Production Tax Act, the Oil and Gas
    |
0017|     Production Equipment Ad Valorem Tax Act or the Copper
    |
0018|     Production Ad Valorem Tax Act; and
    |
0019|                    (2)  "tax rebate adjustment" means, for those
    |
0020|     counties that have an ordinance in effect providing the
    |
0021|     property tax rebate pursuant to the Income Tax Act for the
    |
0022|     property tax year and that have not imposed for the property
    |
0023|     tax year either a property tax, the revenue from which is
    |
0024|     pledged for payment of the income tax revenue reduction
    |
0025|     resulting from the provision of the property tax rebate, or a
    |
0001|     property transfer tax, the estimated amount of the property tax
    |
0002|     rebate to be allowed with respect to the property tax year, and
    |
0003|     for any other governmental unit or purpose, zero; provided that
    |
0004|     any estimate of property tax rebate to be allowed is subject to
    |
0005|     review for appropriateness and approval by the department of
    |
0006|     finance and administration."
    |
0007|          Section 9.  Section 22-8-25 NMSA 1978 (being Laws 1981,
    |
0008|     Chapter 176, Section 5, as amended by Laws 1993, Chapter 226,
    |
0009|     Section 23 and also by Laws 1993, Chapter 231, Section 14) is
    |
0010|     amended to read:
    |
0011|          "22-8-25.  STATE EQUALIZATION GUARANTEE DISTRIBUTION--
    |
0012|     DEFINITIONS--DETERMINATION OF AMOUNT.--
    |
0013|               A.  The state equalization guarantee distribution is
    |
0014|     that amount of money distributed to each school district to
    |
0015|     ensure that the school district's operating revenue, including
    |
0016|     its local and federal revenues as defined in this section, is
    |
0017|     at least equal to the school district's program cost.
    |
0018|               B.  "Local revenue", as used in this section, means
    |
0019|     ninety-five percent of receipts to the school district derived
    |
0020|     from that amount produced by a school district property tax
    |
0021|     applied at the rate of fifty cents ($.50) to each one thousand
    |
0022|     dollars ($1,000) of net taxable value of property allocated to
    |
0023|     the school district and to the assessed value of products
    |
0024|     severed and sold in the school district as determined under the
    |
0025|     Oil and Gas Ad Valorem Production Tax Act <u>and the Copper
</u>    |
<u></u>0001| <u>    Production Ad Valorem Tax Act</u> and upon the assessed value of
    |
0002|     equipment in the school district as determined under the Oil
    |
0003|     and Gas Production Equipment Ad Valorem Tax Act.
    |
0004|               C.  "Federal revenue", as used in this section,
    |
0005|     <u>excludes amounts that if taken into consideration in the
</u>    |
<u></u>0006| <u>    computation of the state equalization guarantee distribution
</u>    |
<u></u>0007| <u>    will result, under federal law or regulations, in the reduction
</u>    |
<u></u>0008| <u>    or elimination of federal school funding otherwise receivable
</u>    |
<u></u>0009| <u>    by the district, and</u> means: 
    |
0010|                    <u>(1)</u>  ninety-five percent of receipts to the
    |
0011|     school district <s>[excluding amounts which that, if taken into
</s>    |
<s></s>0012| <s>    account in the computation of the state equalization guarantee
</s>    |
<s></s>0013| <s>    distribution, result, under federal law or regulations, in a
</s>    |
<s></s>0014| <s>    reduction in or elimination of federal school funding otherwise
</s>    |
<s></s>0015| <s>    receivable by the school district]</s> derived from the following:
    |
0016|                         <s>[(l)]</s> <u>(a)</u>  the school district's
    |
0017|     share of forest reserve funds distributed in accordance with
    |
0018|     Section 22-8-33 NMSA 1978; and
    |
0019|                         <s>[(2)]</s> <u>(b)</u>  grants from the federal
    |
0020|     government as assistance to those areas affected by federal
    |
0021|     activity authorized in accordance with Sections <s>[236 through
</s>    |
<s></s>0022| <s>    240]</s> <u>7701 through 7714</u> of Title 20 of the United States Code
    |
0023|     (commonly known as "PL 874 funds") or an amount equal to the
    |
0024|     revenue the district was entitled to receive if no application
    |
0025|     was made for such funds but <s>[deducting from those grants the
</s>    |
<s></s>0001| <s>    additional amounts to which school districts would be entitled
</s>    |
<s></s>0002| <s>    because of the provisions of Subparagraph (D) of Paragraph (2)
</s>    |
<s></s>0003| <s>    of Subsection (d) of Section 238 of Title 20 of the United
</s>    |
<s></s>0004| <s>    States Code]</s> <u>excluding from those grants amounts that the
</u>    |
<u></u>0005| <u>    state is prohibited by federal law or regulations from taking
</u>    |
<u></u>0006| <u>    into consideration in the computation of the state equalization
</u>    |
<u></u>0007| <u>    guarantee distribution; or
</u>    |
<u></u>0008| <u>                   (2)  with respect to a school district that
</u>    |
<u></u>0009| <u>    received PL 874 funds and for which a proportion of less than
</u>    |
<u></u>0010| <u>    ninety-five percent is calculated for the purpose of taking PL
</u>    |
<u></u>0011| <u>    874 funds into consideration in determining the state
</u>    |
<u></u>0012| <u>    equalization guarantee distribution, that lesser proportion of
</u>    |
<u></u>0013| <u>    receipts to the school district derived from grants from the
</u>    |
<u></u>0014| <u>    federal government as assistance to those areas affected by
</u>    |
<u></u>0015| <u>    federal activity authorized in accordance with Sections 7701
</u>    |
<u></u>0016| <u>    through 7714 of Title 20 of the United States Code (commonly
</u>    |
<u></u>0017| <u>    known as "PL 874 funds") or an amount equal to the revenue the
</u>    |
<u></u>0018| <u>    district was entitled to receive if no application was made for
</u>    |
<u></u>0019| <u>    such funds but excluding from those grants amounts that the
</u>    |
<u></u>0020| <u>    state is prohibited by federal law or regulations from taking
</u>    |
<u></u>0021| <u>    into consideration in the computation of the state equalization
</u>    |

<u></u>0022| <u>    guarantee distribution.
</u>    |
<u></u>0023| <u>    </u>         D.  To determine the amount of the state
    |
0024|     equalization guarantee distribution, the state superintendent
    |
0025|     shall:
    |
0001|                    (1)  calculate the number of program units to
    |
0002|     which each school district is entitled using the membership of
    |
0003|     the fortieth day of the school year, except for school
    |
0004|     districts with a MEM of 200 or less where the number of program
    |
0005|     units shall be calculated on the fortieth day membership of
    |
0006|     either the prior year or the current year, whichever is
    |
0007|     greater, for all programs except special education, which shall
    |
0008|     be calculated by using the membership on December 1 of the
    |
0009|     school year; or
    |
0010|                    (2)  calculate the number of program units to
    |
0011|     which a school district operating under an approved year-round
    |
0012|     school calendar is entitled using the membership on an
    |
0013|     appropriate date established by the state board;
    |
0014|                    (3)  using the results of the calculations in
    |
0015|     Paragraph (1) or (2) of this subsection and the instructional
    |
0016|     staff training and experience index from the October report of
    |
0017|     the prior school year, establish a total program cost of the
    |
0018|     school district;
    |
0019|                    (4)  calculate the local and federal revenues
    |
0020|     as defined in this section;
    |
0021|                    (5)  deduct the sum of the calculations made in
    |
0022|     Paragraph (4) of this subsection from the program cost
    |
0023|     established in Paragraph (3) of this subsection; and
    |
0024|                    (6)  deduct the total amount of guaranteed
    |
0025|     energy savings contract payments that the state superintendent
    |
0001|     determines will be made to the school district from the public
    |
0002|     school energy efficiency fund during the fiscal year for which
    |
0003|     the state equalization guarantee distribution is being
    |
0004|     computed.
    |
0005|               E.  The amount of the state equalization guarantee
    |
0006|     distribution to which a school district is entitled is the
    |
0007|     balance remaining after the deductions made in Paragraphs (5)
    |
0008|     and (6) of Subsection D of this section.
    |
0009|               F.  The state equalization guarantee distribution
    |
0010|     shall be distributed prior to June 30 of each fiscal year.  The
    |
0011|     calculation shall be based on the local and federal revenues
    |
0012|     specified in this section received from June 1 of the previous
    |
0013|     fiscal year through May 31 of the fiscal year for which the
    |
0014|     state equalization guarantee distribution is being computed. 
    |
0015|     In the event that a district has received more state
    |
0016|     equalization guarantee funds than its entitlement, a refund
    |
0017|     shall be made by the district to the state general fund.
    |
0018|               G.  Notwithstanding the methods of calculating the
    |
0019|     state equalization guarantee distribution in this section and
    |
0020|     Laws 1974, Chapter 8, Section 22, if a school district received
    |
0021|     funds under Section 2391 of Title 42 U.S.C.A. and if the
    |
0022|     federal government takes into consideration grants authorized
    |
0023|     by Sections <s>[236 through 240]</s> <u>7701 through 7714</u> of Title 20
    |
0024|     of the United States Code and all other revenues available to
    |
0025|     the school district in determining the level of federal support
    |
0001|     for the school district for the sixty-fourth and succeeding
    |
0002|     fiscal years, the state equalization guarantee distribution for
    |
0003|     school districts receiving funds under this subsection shall be
    |
0004|     computed as follows:
    |
0005|          fiscal year program cost           prior fiscal year
    |
0006|          excluding special education        state equalization
    |
0007|          for the year for which the         x    guarantee distribution
    |
0008|          state equalization guarantee       excluding special
    |
0009|          <u>distribution is being computed</u>        education 
    |
0010|          
    |
0011|          prior fiscal year program cost
    |
0012|          excluding special education
    |
0013|     plus special education funding in accordance with Paragraphs (1)
    |
0014|     or (2) and (3) of Subsection D of this section and Section 22-8-
    |
0015|     21 NMSA 1978 plus an amount that would be produced by applying a
    |
0016|     rate of eight dollars forty-two and one-half cents ($8.425) to
    |
0017|     each one thousand dollars ($l,000) of net taxable value of
    |
0018|     property as defined in the Property Tax Code for property
    |
0019|     taxation purposes in the school district and to each one
    |
0020|     thousand dollars ($l,000) of the assessed value of products
    |
0021|     severed and sold in the school district as determined under the
    |
0022|     Oil and Gas Ad Valorem Production Tax Act <u>and the Copper
</u>    |
<u></u>0023| <u>    Production Ad Valorem Tax Act</u> and upon the assessed value of
    |
0024|     equipment in the school district as determined under the Oil and
    |
0025|     Gas Production Equipment Ad Valorem Tax Act and then reduced by
    |
0001|     the total amount of guaranteed energy savings contract payments,
    |
0002|     if any, that the state superintendent determines will be made to
    |
0003|     the school district from the public school energy efficiency
    |
0004|     fund during the fiscal year for which the state equalization
    |
0005|     guarantee distribution is being computed, equals the fiscal year
    |
0006|     state equalization guarantee distribution for the year for which
    |
0007|     the state equalization guarantee distribution is being computed.
    |
0008|          If at any time grants from the federal government as
    |
0009|     assistance to those areas affected by federal activity
    |
0010|     authorized in accordance with Sections <s>[236 through 240]</s> <u>7701
</u>    |
<u></u>0011| <u>    through 7714</u> of Title 20 of the United States Code (commonly
    |
0012|     known as "PL 874 funds") are reduced or are no longer available,
    |
0013|     the state equalization guarantee distribution shall be computed
    |
0014|     by the formula contained in this subsection plus an increase by
    |
0015|     fifty percent of the amount the prior year's PL 874 funds exceed
    |
0016|     PL 874 funds for the year for which the state equalization
    |
0017|     guarantee distribution is being computed."
    |
0018|          Section 10.  Section 22-8-31 NMSA 1978 (being Laws 1967,
    |
0019|     Chapter 16, Section 84, as amended) is amended to read:
    |
0020|          "22-8-31.  STATE-SUPPORT RESERVE FUND.--
    |
0021|               A.  The "state-support reserve fund" is created.
    |
0022|               B.  The state-support reserve fund shall be used only
    |
0023|     to augment the appropriations for the state equalization
    |
0024|     guarantee distribution <u>and the distributions pursuant to the
</u>    |
<u></u>0025| <u>    Local Operational School Levy Act</u> in order to <s>[insure]</s>
    |
0001|     <u>ensure</u>, to the extent of the amount undistributed in the fund,
    |
0002|     that the maximum figures for such <s>[distribution]</s>
    |
0003|     <u>distributions</u> established by law shall not be reduced.
    |
0004|               C.  The undistributed money in the state-support
    |
0005|     reserve fund shall be invested by the state treasurer in
    |
0006|     interest-bearing securities of the United States government or
    |
0007|     in certificates of deposit in qualified banks and in savings and
    |
0008|     <s>[loans]</s> <u>loan</u> associations whose deposits are insured with an
    |
0009|     agency of the United States.  The state treasurer may deposit
    |
0010|     money from the state-support reserve fund or any other fund in
    |
0011|     one or more accounts with any such bank or federally insured
    |
0012|     savings and loan association, but the state treasurer, in any
    |
0013|     official capacity, shall not deposit money from <s>[said]</s> <u>that</u>
    |
0014|     fund or any other fund in any one <s>[such]</s> federally insured
    |
0015|     savings and loan association the aggregate of which would exceed
    |
0016|     the amount of federal savings and loan insurance corporation
    |
0017|     insurance for a single public account.  Income from these
    |
0018|     investments shall be periodically credited to the general fund.
    |
0019|               D.  At least forty-five days before the money is
    |
0020|     needed, the <s>[chief]</s> <u>state superintendent</u> shall notify the
    |
0021|     state treasurer in writing of the amount that will be needed for
    |
0022|     <u>the state equalization guarantee</u> distribution. <u>At least
</u>    |
<u></u>0023| <u>    twenty-five days before the money is needed, the state
</u>    |
<u></u>0024| <u>    superintendent shall notify the state treasurer in writing of
</u>    |
<u></u>0025| <u>    the amount that will be needed for transfer to the local
</u>    |
<u></u>0001| <u>    operational school fund for distribution pursuant to the Local
</u>    |
<u></u>0002| <u>    Operational School Levy Act.</u>  The state treasurer shall
    |
0003|     transfer to the local operational school fund the amount
    |
0004|     requested or the remaining unencumbered balance in the state
    |
0005|     support reserve fund after the state equalization guarantee
    |
0006|     distribution amount has been subtracted, whichever is less.
    |
0007|             E.  In the event that local or federal revenues as
    |
0008|     defined in Section <s>[77-6-19 NMSA 1953]</s> <u>22-8-25 NMSA 1978</u> are
    |
0009|     received after May 31 of the fiscal year for which the state
    |
0010|     equalization guarantee distribution is being computed, and it is
    |
0011|     therefore necessary to use money from the state-support reserve
    |
0012|     fund to augment the appropriation for the state equalization
    |
0013|     guarantee distribution, the <s>[chief]</s> <u>state superintendent</u>,
    |
0014|     upon receipt by the school district of the delayed local or
    |
0015|     federal revenues, shall deduct the appropriate amount from the
    |
0016|     current state equalization guarantee distribution to that school
    |
0017|     district and reimburse the state-support reserve fund in the
    |
0018|     amount of the deduction.
    |
0019|             F.  It is the intent of the legislature that the
    |
0020|     <u>state- support reserve</u> fund be reimbursed in the amount of the
    |
0021|     yearly <s>[distribution]</s> <u>distributions</u> by appropriation in the
    |
0022|     year following the distribution so that the fund at the
    |
0023|     beginning of each fiscal year shall have a credit balance of at
    |
0024|     least ten million dollars ($10,000,000).
    |
0025|             G.  Distribution from <s>[this]</s> <u>the state-support
</u>    |
<u></u>0001| <u>    reserve</u> fund shall be made in the same manner and on the same
    |
0002|     basis as the state equalization guarantee distribution."
    |
0003|         Section 11.  EMERGENCY.--It is necessary for the public
    |
0004|     peace, health and safety that this act take effect immediately.
    |
0005|                                     
    |
0006|   
    |
0007|                       FORTY-THIRD LEGISLATURE
    |
0008|                         FIRST SESSION, 1997
    |
0009|   
    |
0010|   
    |
0011|                                                February 28, 1997
    |
0012|   
    |
0013|   Mr. President:
    |
0014|   
    |
0015|       Your WAYS AND MEANS COMMITTEE, to whom has been
    |
0016|   referred
    |
0017|   
    |
0018|                           SENATE BILL 476
    |
0019|   
    |
0020|   has had it under consideration and reports same with
    |
0021|   recommendation that it DO PASS, and thence referred to the
    |
0022|   FINANCE COMMITTEE.
    |
0023|   
    |
0024|                                Respectfully submitted,
    |
0025|   
    |
0001|   
    |
0002|   
    |
0003|                                __________________________________
    |
0004|                                Carlos R. Cisneros, Chairman 
    |
0005|   
    |
0006|   
    |
0007|   
    |
0008|   Adopted_______________________   Not Adopted_______________________
    |
0009|             (Chief Clerk)                          (Chief Clerk)
    |
0010|   
    |
0011|   
    |
0012|                     Date ________________________
    |
0013|   
    |
0014|   
    |
0015|   The roll call vote was <u> 5 </u> For <u> 0 </u> Against
    |
0016|           Yes:    5
    |
0017|           No:     0
    |
0018|                Excused:     Duran, Jennings, McSorley, Nava
    |
0019|           Absent: None
    |
0020|   
    |
0021|   
    |
0022|   S0476WM1
    |
0023|   
    |