0001| | 0002| HOUSE BILL 178 | 0003| 43RD LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION, 1998 | 0004| INTRODUCED BY | 0005| MAX COLL | 0006| | 0007| | 0008| | 0009| | 0010| | 0011| AN ACT | 0012| RELATING TO PUBLIC SCHOOL CAPITAL IMPROVEMENTS; ENACTING THE | 0013| PUBLIC SCHOOL CAPITAL EQUALIZATION ACT; AUTHORIZING THE | 0014| ISSUANCE OF SEVERANCE TAX BONDS FOR PUBLIC SCHOOL CAPITAL | 0015| PROJECTS; AMENDING, REPEALING AND ENACTING SECTIONS OF THE | 0016| NMSA 1978; MAKING AN APPROPRIATION. | 0017| | 0018| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0019| Section 1. [|NEW MATERIAL|] SHORT TITLE.--Sections 1 | 0020| through 7 of this act may be cited as the "Public School | 0021| Capital Equalization Act". | 0022| Section 2. [|NEW MATERIAL|] FINDINGS AND PURPOSE.-- | 0023| A. The legislature finds that, because of growth | 0024| rates, income levels, the presence or absence of natural | 0025| resources and other factors, a disparity exists between school | - 1 - 0001| districts concerning their ability to finance public school | 0002| capital improvements. The legislature further finds that | 0003| there is no adequate remedy for the disparity under existing | 0004| law. | 0005| B. The purpose of the Public School Capital | 0006| Equalization Act is to equalize the funding for public school | 0007| capital improvements by providing an equitable procedure for | 0008| allocating state resources and by dedicating one-half of the | 0009| severance tax bonding capacity to public school capital | 0010| improvements. | 0011| Section 3. [|NEW MATERIAL|] DEFINITIONS.--As used in the | 0012| Public School Capital Equalization Act: | 0013| A. "capital project" means: | 0014| (1) constructing, renovating or purchasing | 0015| public school buildings; or | 0016| (2) purchasing or improving public school | 0017| grounds; and | 0018| B. "council" means the public school capital | 0019| outlay council. | 0020| Section 4. [|NEW MATERIAL|] PUBLIC SCHOOL CAPITAL | 0021| EQUALIZATION.-- | 0022| A. A school district in need of funding for a | 0023| capital project may submit an application to the council. | 0024| Each application shall be in a form approved by the council | 0025| and shall include: | - 2 - 0001| (1) a description of the capital project; | 0002| (2) an explanation of the need for the | 0003| capital project; | 0004| (3) a description of efforts used by | 0005| residents of the school district to meet the district's | 0006| capital outlay requirements; | 0007| (4) documentation showing how the school | 0008| district has used its financial resources; | 0009| (5) a calculation showing that the percentage | 0010| of the total debt authorized by law that the school district | 0011| has assumed is greater than fifty percent; | 0012| (6) a five-year facilities plan that includes | 0013| capital priorities and enrollment projections; and | 0014| (7) evidence that the school district can | 0015| meet any requirements for matching funds. | 0016| B. At least once each fiscal year the council | 0017| shall consider all complete applications at a public hearing | 0018| and prioritize the projects based upon the critical need for | 0019| each capital project. | 0020| Section 5. [|NEW MATERIAL|] LEVEL OF STATE FUNDING-- | 0021| SCHOOL DISTRICT MATCH.-- | 0022| A. For each capital project prioritized, the | 0023| council shall calculate the amount of the total capital | 0024| project cost that may be funded with severance tax bond | 0025| proceeds and the amount of the total capital project cost that | - 3 - 0001| the school district shall be required to fund with its own | 0002| resources or with grant assistance pursuant to the Public | 0003| School Capital Outlay Act. | 0004| B. The percentage of the total capital project | 0005| cost that may be funded with severance tax bond proceeds shall | 0006| be calculated by subtracting one hundred from twice the | 0007| percentage of the total debt authorized by law that the school | 0008| district has assumed. | 0009| C. The school district shall match with its own | 0010| funds or with grant assistance pursuant to the Public School | 0011| Capital Outlay Act the portion of the total project cost not | 0012| funded by severance tax bond proceeds. | 0013| D. No capital project shall be funded in phases or | 0014| by installments. The total capital project cost shall include | 0015| an amount sufficient to complete the capital project. | 0016| Section 6. [|NEW MATERIAL|] SEVERANCE TAX BONDS-- | 0017| APPROPRIATION OF PROCEEDS.-- | 0018| A. After estimating the severance tax bonding | 0019| capacity available for capital projects, the council shall | 0020| allocate the capacity, in the prioritized order, to the | 0021| portion of the capital projects to be funded by severance tax | 0022| bond proceeds. When the council finds that the capital | 0023| projects have been developed sufficiently to justify the | 0024| issuance and that the capital projects can proceed to contract | 0025| within a reasonable time, the council shall, by resolution, | - 4 - 0001| request severance tax bonds to be issued in the amount | 0002| necessary to fund the capital projects. | 0003| B. Unless prohibited by the provisions of Section | 0004| 7-27-14 NMSA 1978, the state board of finance shall issue and | 0005| sell severance tax bonds in compliance with the Severance Tax | 0006| Bonding Act in the amount requested by the council. The state | 0007| board of finance shall schedule the issuance and sale of the | 0008| bonds in the most expeditious and economical manner possible. | 0009| The state board of finance shall further take the appropriate | 0010| steps necessary to comply with the Internal Revenue Code of | 0011| 1986, as amended. | 0012| C. Proceeds from the sale of the bonds are | 0013| appropriated to the state department of public education for | 0014| the purpose of paying the portion of the capital projects to | 0015| be funded with the proceeds. Any unexpended or unencumbered | 0016| balance remaining after six months following the completion of | 0017| a capital project shall revert to the severance tax bonding | 0018| fund. | 0019| Section 7. [|NEW MATERIAL|] RULES.--The state department | 0020| of public education may adopt such rules as are necessary to | 0021| carry out the provisions of the Public School Capital | 0022| Equalization Act. | 0023| Section 8. A new Section 7-27-12.1 NMSA 1978 is enacted | 0024| to read: | 0025| "7-27-12.1. [|NEW MATERIAL|] BONDS TO BE ISSUED-- | - 5 - 0001| SPECIFIC AUTHORIZATION.-- | 0002| A. Unless prohibited by the provisions of Section | 0003| 7-27-14 NMSA 1978, the state board of finance shall issue and | 0004| sell severance tax bonds when specifically authorized to do so | 0005| by a law that specifies the amount and purpose of the issue | 0006| and the recipient of the bond proceeds. The board shall issue | 0007| and sell the severance tax bonds only when so instructed by | 0008| resolution of the governing body of the recipient of the bond | 0009| proceeds. | 0010| B. The state board of finance shall also issue and | 0011| sell severance tax bonds authorized by Sections 72-14-36 | 0012| through 72-14-42 NMSA 1978, and such authority as has been | 0013| given to the interstate stream commission to issue and sell | 0014| such bonds is transferred to the state board of finance." | 0015| Section 9. A new Section 7-27-12.2 NMSA 1978 is enacted | 0016| to read: | 0017| "7-27-12.2. [|NEW MATERIAL|] BONDS TO BE ISSUED--PUBLIC | 0018| SCHOOL CAPITAL EQUALIZATION ACT.--Unless prohibited by the | 0019| provisions of Section 7-27-14 NMSA 1978, the state board of | 0020| finance shall issue and sell severance tax bonds when | 0021| requested to do so by resolution of the public school capital | 0022| outlay council pursuant to the Public School Capital | 0023| Equalization Act." | 0024| Section 10. Section 7-27-14 NMSA 1978 (being Laws 1961, | 0025| Chapter 5, Section 11) is amended to read: | - 6 - 0001| "7-27-14. AMOUNT OF TAX--SECURITY FOR BONDS.-- | 0002| A. The legislature shall provide for the continued | 0003| assessment, levy, collection and deposit into the severance | 0004| tax bonding fund of the tax or taxes upon natural resource | 0005| products severed and saved from the soil of the state | 0006| ~[which]~ |that|, together with such other income as may be | 0007| deposited to the fund, will be sufficient to produce an amount | 0008| ~[which]~ |that| is at least the amount necessary to meet | 0009| annual debt service charges on all outstanding severance tax | 0010| bonds. | 0011| ~[B. The state board of finance shall issue no | 0012| severance tax bonds unless the aggregate amount outstanding, | 0013| including any severance tax bonds authorized prior to the | 0014| enactment of this Severance Tax Bonding Act, but not yet | 0015| issued, and including the issue proposed, can be serviced with | 0016| not more than fifty percent of the annual deposits into the | 0017| severance tax bonding fund, as determined by the deposits | 0018| during the preceding fiscal year.]~ | 0019| | B. The state board of finance shall issue no | 0020| severance tax bonds pursuant to Section 7-27-12.1 NMSA 1978 | 0021| unless the aggregate amount outstanding for bonds issued | 0022| pursuant to that section, including the issue proposed, can be | 0023| serviced with not more than one-half of the difference | 0024| between: | 0025| (1) fifty percent of the annual deposits into | - 7 - 0001| the severance tax bonding fund, as determined by the deposits | 0002| during the preceding fiscal year; and | 0003| (2) the amount needed during the current | 0004| fiscal year for any debt service remaining on those severance | 0005| tax bonds outstanding on July 1, 1998. | 0006| C. The state board of finance shall issue no | 0007| severance tax bonds pursuant to Section 7-27-12.2 NMSA 1978 | 0008| unless the aggregate amount outstanding for bonds issued | 0009| pursuant to that section, including the issue proposed, can be | 0010| serviced with not more than one-half of the difference | 0011| between: | 0012| (1) fifty percent of the annual deposits into | 0013| the severance tax bonding fund, as determined by the deposits | 0014| during the preceding fiscal year; and | 0015| (2) the amount needed during the current | 0016| fiscal year for any debt service remaining on those severance | 0017| tax bonds outstanding on July 1, 1998.| | 0018| ~[C.]~ |D.| The provisions of this section shall | 0019| not be modified by the terms of any bonds hereafter issued." | 0020| Section 11. TEMPORARY PROVISION.--All severance tax | 0021| bonds authorized, but not issued, before the effective date of | 0022| this act shall be issued pursuant to Section 7-27-12.1 NMSA | 0023| 1978. | 0024| Section 12. REPEAL.--Section 7-27-12 NMSA 1978 (being | 0025| Laws 1961, Chapter 5, Section 10, as amended) is repealed. | - 8 - 0001| Section 13. EFFECTIVE DATE.--The effective date of the | 0002| provisions of this act is July 1, 1998. |