Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports if they are used for other purposes.

 

Current FIRs (in HTML & Adobe PDF formats) are available on the NM Legislative Website (legis.state.nm.us).  Adobe PDF versions include all attachments, whereas HTML versions may not.  Previously issued FIRs and attachments may also be obtained from the LFC in Suite 101 of the State Capitol Building North.

 

 

F I S C A L    I M P A C T    R E P O R T

 

 

 

SPONSOR

Campos

DATE TYPED

02/08/04

HB

 

 

SHORT TITLE

Severance Tax Bonds For School Improvements

SB

407

 

 

ANALYST

Baca

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY04

FY05

FY04

FY05

$70,000.0

 

 

 

Non-Recurring

STB

(Parenthesis ( ) Indicate Revenue Decreases)

 

Relates to HB 393 & SB 399

 

Relates to Appropriation in the General Appropriation Act

 

SOURCES OF INFORMATION

 

LFC Files

 

Response Received From

New Mexico Public Education Department (PED)

 

SUMMARY

 

Synopsis of Bill

 

Senate Bill 407 authorizes the State Board of Finance to issue supplemental severance tax bonds not to exceed $70 million in FY04 to correct deficiencies pursuant to the Public School Capital Outlay Act.

 

Significant Issues

 

According to the PED analysis, the Deficiencies Correction Unit (DCU) was created during the 2001 legislative session to identify and correct all serious deficiencies in public school buildings and grounds, including charter schools, which may adversely affect the health or safety of students and school personnel.  Since the creation of the DCU, the Public School Capital Outlay Council (PSCOC) has developed a methodology for prioritizing projects and has begun approving allocations from the fund.  The DCU validates, verifies and prioritizes conditions with guidelines adopted by the PSCOC.

 

 For the corrective work, the DCU oversees all aspects of contracts, provides direct oversight of construction, conducts on-site inspections during the work and requires the use of standardized construction documents and processes.

 

The PED further reports that all school districts are eligible for funding regardless of their bonded indebtedness.  It was legislative intent to identify and make awards no later than June 2004, with the funds expended by June 30, 2006 (22-24-4.1 NMSA 1978).  An additional appropriation will further help to get schools to the minimum levels of adequacy.  This bill extends the life for the DCU program that was originally scheduled to sunset in FY 06.  It will be the responsibility of the PSFA to administer all aspects of this program if it is extended.

 

FISCAL IMPLICATIONS

 

The revenue derived from the issuance of supplemental severance tax bonds will not revert to the general fund.

 

OTHER SUBSTANTIVE ISSUES

 

As reported by the PED, an additional allocation to the Deficiencies Correction Program will help supplement critical capital outlay projects funded pursuant to the Public School Capital Outlay Act and allow those funds to be allocated and spread out more widely statewide.  Funds from the deficiencies correction program will not be discounted and subtracted from a district’s PSCOC award as are the direct legislative appropriations.

 

 

 

 

LB/lg:dm