House Bill text for HB0323

HOUSE BILL 323

48th legislature - STATE OF NEW MEXICO - first session, 2007

INTRODUCED BY

Rick Miera

FOR THE PUBLIC SCHOOL CAPITAL OUTLAY OVERSIGHT TASK FORCE

AN ACT

RELATING TO PUBLIC SCHOOLS; AUTHORIZING REVENUE BONDS FOR THE PURPOSE OF PROVIDING THE MATCH REQUIRED FOR GRANTS TO STATE- CHARTERED CHARTER SCHOOLS PURSUANT TO THE PUBLIC SCHOOL CAPITAL OUTLAY ACT; CREATING THE CHARTER SCHOOL BONDING FUND; PROVIDING FOR DISTRIBUTIONS OF GROSS RECEIPTS TAX REVENUE AND CERTAIN DISTRIBUTIONS PURSUANT TO THE PUBLIC SCHOOL CAPITAL IMPROVEMENTS ACT TO THE FUND; AUTHORIZING AN ADDITIONAL PROPERTY TAX LEVY TO BE APPROVED BY THE VOTERS PURSUANT TO THE PUBLIC SCHOOL CAPITAL IMPROVEMENTS ACT; MAKING AN APPROPRIATION.

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

Section 1. A new section of the Tax Administration Act is enacted to read:

"[NEW MATERIAL] DISTRIBUTION--CHARTER SCHOOL BONDING FUND--GROSS RECEIPTS TAX.--A distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the charter school bonding fund from the net receipts attributable to the gross receipts tax imposed by the Gross Receipts and Compensating Tax Act in an amount necessary, as determined by the New Mexico finance authority, to make the required debt service payments on charter school bonds issued pursuant to the Charter Schools Act and the New Mexico Finance Authority Act. The distribution shall be made:

A. after the required distribution pursuant to Section 7-1-6.4 NMSA 1978;

B. contemporaneously with other distributions of net receipts attributable to the gross receipts tax for payment of debt service on outstanding bonds or to a fund dedicated for that purpose; and

C. prior to any other distribution of net receipts attributable to the gross receipts tax."

Section 2. A new section of the Charter Schools Act is enacted to read:

"[NEW MATERIAL] CHARTER SCHOOL BONDS AUTHORIZED--CONDITIONS--PROCEDURE.--

A. The New Mexico finance authority is authorized to issue and sell from time to time revenue bonds, known as "charter school bonds", in an amount outstanding at any one time not to exceed twenty million dollars ($20,000,000), payable solely from the charter school bonding fund, in compliance with the Charter Schools Act and the New Mexico Finance Authority Act for the purpose of providing funding for the capital needs of state-chartered charter schools as determined pursuant to the Public School Capital Outlay Act. The bonds may be issued when the division has certified the need for the bonds and the conditions of Subsection C of this section have been satisfied.

B. The net proceeds from the bonds are appropriated to the division for the purpose of providing the share of the cost of a capital outlay project for a state-chartered charter school that is not funded from the public school capital outlay fund.

C. Bonds shall not be issued pursuant to this section unless:

(1) a state-chartered charter school has applied for grant assistance pursuant to the Public School Capital Outlay Act;

(2) the public school capital outlay council has awarded a grant to the state-chartered charter school from the public school capital outlay fund contingent upon the issuance of charter school bonds to provide the share of the project cost that will not be funded from the public school capital outlay fund; and

(3) the division has determined that the state-chartered charter school has no other available money to use for the capital outlay project.

D. Each series of bonds shall be issued pursuant to the provisions of the New Mexico Finance Authority Act, except as otherwise provided in the Charter Schools Act or the Public School Capital Outlay Act."

Section 3. A new section of the Charter Schools Act is enacted to read:

"[NEW MATERIAL] CHARTER SCHOOL BONDING FUND--PLEDGE OF MONEY IN THE FUND.--

A. The "charter school bonding fund" is created as a special fund within the New Mexico finance authority. The fund shall be administered by the New Mexico finance authority as a special account. The fund shall consist of gross receipts tax revenues distributed to the fund by law, money distributed to the fund pursuant to the provisions of the Public School Capital Improvements Act and other transfers and appropriations made to the fund. Earnings of the fund shall be credited to the fund.

B. Money in the charter school bonding fund shall be pledged irrevocably by the New Mexico finance authority for the payment of principal and interest on all charter school bonds issued pursuant to the Charter Schools Act and the New Mexico Finance Authority Act. Money in the fund is appropriated to the New Mexico finance authority for the purpose of paying debt service, including redemption premiums, on the bonds and the expenses incurred in the issuance, payment and administration of the bonds.

C. On the last day of January and July of each year, the New Mexico finance authority shall estimate the amount needed to make debt service payments on the charter school bonds issued pursuant to the Charter Schools Act and the New Mexico Finance Authority Act plus the amount that may be needed for any required reserves, administrative expenses or other obligations coming due during the next twelve months from the charter school bonding fund. If the balance in the fund exceeds the amount needed, an amount shall be transferred to the general fund, equal to the lesser of:

(1) the excess amount in the fund; or

(2) the total distributions of gross receipts tax revenue previously made to the fund minus the total of previous transfers to the general fund pursuant to this subsection.

D. Charter school bonds issued pursuant to the Charter Schools Act and the New Mexico Finance Authority Act shall be payable solely from the charter school bonding fund or such other special funds as may be provided by law and do not create an obligation or indebtedness of the state within the meaning of any constitutional provision. A breach of any contractual obligation incurred pursuant to those acts shall not impose a pecuniary liability or a charge upon the general credit or taxing power of the state, and the bonds are not general obligations for which the state's full faith and credit are pledged.

E. The state does hereby pledge that the charter school bonding fund shall be used only for the purposes specified in this section and pledged first to pay the debt service on the charter school bonds. The state further pledges that any law authorizing the distribution of taxes or other revenues to the fund or authorizing expenditures from the fund shall not be amended or repealed or otherwise modified so as to impair the bonds to which the fund is dedicated as provided in this section."

Section 4. A new section of the Charter Schools Act is enacted to read:

"[NEW MATERIAL] CHARTER SCHOOL BONDS--FULL AUTHORITY TO ISSUE--BONDS ARE LEGAL INVESTMENTS.--

A. The Charter Schools Act and the New Mexico Finance Authority Act shall, without reference to any other act of the legislature, be the full authority for the issuance and sale of charter school bonds, which bonds shall have all the qualities of investment securities under the Uniform Commercial Code and shall not be invalid for any irregularity or defect or be contestable in the hands of bona fide purchasers or holders of the bonds for value.

B. Charter school bonds are legal investments for any person or board charged with the investment of any public funds and are acceptable as security for any deposit of public money."

Section 5. A new section of the Charter Schools Act is enacted to read:

"[NEW MATERIAL] BONDS TAX EXEMPT.--All charter school bonds shall be exempt from taxation by the state or any of its political subdivisions."

Section 6. Section 22-24-5 NMSA 1978 (being Laws 1975, Chapter 235, Section 5, as amended) is amended to read:

"22-24-5. PUBLIC SCHOOL CAPITAL OUTLAY PROJECTS--APPLICATION--GRANT ASSISTANCE.--

A. Applications for grant assistance, the approval of applications, the prioritization of projects and grant awards shall be conducted pursuant to the provisions of this section.

B. Except as provided in Sections 22-24-4.3, 22-24-5.4, [and] 22-24-5.6 and 22-24-5.8 NMSA 1978, the following provisions govern grant assistance from the fund for a public school capital outlay project not wholly funded pursuant to Section 22-24-4.1 NMSA 1978:

(1) all school districts are eligible to apply for funding from the fund, regardless of percentage of indebtedness;

(2) priorities for funding shall be determined by using the statewide adequacy standards developed pursuant to Subsection C of this section; provided that:

(a) the council shall apply the standards to charter schools to the same extent that they are applied to other public schools; and

(b) in an emergency in which the health or safety of students or school personnel is at immediate risk or in which there is a threat of significant property damage, the council may award grant assistance for a project using criteria other than the statewide adequacy standards;

(3) the council shall establish criteria to be used in public school capital outlay projects that receive grant assistance pursuant to the Public School Capital Outlay Act. In establishing the criteria, the council shall consider:

(a) the feasibility of using design, build and finance arrangements for public school capital outlay projects;

(b) the potential use of more durable construction materials that may reduce long-term operating costs; and

(4) no more than ten percent of the combined total of grants in a funding cycle shall be used for retrofitting existing facilities for technology infrastructure;

(5) except as provided in Paragraph (6) or (8) of this subsection, the state share of a project approved and ranked by the council shall be funded within available resources pursuant to the provisions of this paragraph. No later than May 1 of each calendar year, a value shall be calculated for each school district in accordance with the following procedure:

(a) the final prior year net taxable value for a school district divided by the MEM for that school district is calculated for each school district;

(b) the final prior year net taxable value for the whole state divided by the MEM for the state is calculated;

(c) excluding any school district for which the result calculated pursuant to Subparagraph (a) of this paragraph is more than twice the result calculated pursuant to Subparagraph (b) of this paragraph, the results calculated pursuant to Subparagraph (a) of this paragraph are listed from highest to lowest;

(d) the lowest value listed pursuant to Subparagraph (c) of this paragraph is subtracted from the highest value listed pursuant to that subparagraph;

(e) the value calculated pursuant to Subparagraph (a) of this paragraph for the subject school district is subtracted from the highest value listed in Subparagraph (c) of this paragraph;

(f) the result calculated pursuant to Subparagraph (e) of this paragraph is divided by the result calculated pursuant to Subparagraph (d) of this paragraph;

(g) the sum of the property tax mill levies for the prior tax year imposed by each school district on residential property pursuant to Chapter 22, Article 18 NMSA 1978, the Public School Capital Improvements Act, the Public School Buildings Act, the Education Technology Equipment Act and Paragraph (2) of Subsection B of Section 7-37-7 NMSA 1978 is calculated for each school district;

(h) the lowest value calculated pursuant to Subparagraph (g) of this paragraph is subtracted from the highest value calculated pursuant to that subparagraph;

(i) the lowest value calculated pursuant to Subparagraph (g) of this paragraph is subtracted from the value calculated pursuant to that subparagraph for the subject school district;

(j) the value calculated pursuant to Subparagraph (i) of this paragraph is divided by the value calculated pursuant to Subparagraph (h) of this paragraph;

(k) if the value calculated for a subject school district pursuant to Subparagraph (j) of this paragraph is less than five-tenths, then, except as provided in Subparagraph (n) or (o) of this paragraph, the value for that school district equals the value calculated pursuant to Subparagraph (f) of this paragraph;

(l) if the value calculated for a subject school district pursuant to Subparagraph (j) of this paragraph is five-tenths or greater, then that value is multiplied by five-hundredths;

(m) if the value calculated for a subject school district pursuant to Subparagraph (j) of this paragraph is five-tenths or greater, then the value calculated pursuant to Subparagraph (l) of this paragraph is added to the value calculated pursuant to Subparagraph (f) of this paragraph. Except as provided in Subparagraph (n) or (o) of this paragraph, the sum equals the value for that school district;

(n) in those instances in which the calculation pursuant to Subparagraph (k) or (m) of this paragraph yields a value less than one-tenth, one-tenth shall be used as the value for the subject school district;

(o) in those instances in which the calculation pursuant to Subparagraph (k) or (m) of this paragraph yields a value greater than one, one shall be used as the value for the subject school district;

(p) except as provided in Section

22-24-5.7 NMSA 1978 and except as reduced pursuant to Paragraph (6) of this subsection, the amount to be distributed from the fund for an approved project shall equal the total project cost multiplied by a fraction, the numerator of which is the value calculated for the subject school district in the current year plus the value calculated for that school district in each of the two preceding years and the denominator of which is three; and

(q) as used in this paragraph: 1) "MEM" means the average full-time-equivalent enrollment of students attending public school in a school district on the eightieth and one hundred twentieth days of the prior school year; and 2) "total project cost" means the total amount necessary to complete the public school capital outlay project less any insurance reimbursement received by the school district for the project;

(6) the amount calculated pursuant to Subparagraph (p) of Paragraph (5) of this subsection shall be reduced by the following procedure:

(a) the total of all legislative appropriations made after January 1, 2003 for nonoperating purposes either directly to the subject school district or to another governmental entity for the purpose of passing the money through directly to the subject school district, and not rejected by the subject school district, but excluding educational technology appropriations made prior to January 1, 2005 and reauthorizations of appropriations previously made to the subject school district, is calculated; provided that an appropriation made in a fiscal year shall be deemed to be accepted by a school district unless, prior to June 1 of that fiscal year, the school district notifies the department of finance and administration and the public education department that the district is rejecting the appropriation; provided further that the total shall be increased by an amount, certified to the council by the department, equal to the educational technology appropriations made to the subject school district on or after January 1, 2003 and prior to January 1, 2005 and not previously used to offset distributions pursuant to the Technology for Education Act;

(b) the applicable fraction used for the subject school district and the current calendar year for the calculation in Subparagraph (p) of Paragraph (5) of this subsection is subtracted from one;

(c) the value calculated pursuant to Subparagraph (a) of this paragraph for the subject school district is multiplied by the amount calculated pursuant to Subparagraph (b) of this paragraph for that school district;

(d) the total amount of reductions for the subject school district previously made pursuant to Subparagraph (e) of this paragraph for other approved public school capital outlay projects is subtracted from the amount calculated pursuant to Subparagraph (c) of this paragraph; and

(e) the amount calculated pursuant to Subparagraph (p) of Paragraph (5) of this subsection shall be reduced by the amount calculated pursuant to Subparagraph (d) of this paragraph;

(7) as used in Paragraphs (5) and (6) of this subsection, "subject school district" means the school district that has submitted the application for funding and in which the approved public school capital outlay project will be located;

(8) the council may adjust the amount of local share otherwise required if it determines that a school district has used all of its local resources. Before making any adjustment to the local share, the council shall consider whether:

(a) the school district has insufficient bonding capacity over the next four years to provide the local match necessary to complete the project and, for all educational purposes, has a residential property tax rate of at least ten dollars ($10.00) on each one thousand dollars ($1,000) of taxable value, as measured by the sum of all rates imposed by resolution of the local school board plus rates set to pay interest and principal on outstanding school district general obligation bonds;

(b) the school district: 1) has fewer than an average of eight hundred full-time-equivalent students on the eightieth and one hundred twentieth days of the prior school year; 2) has at least seventy percent of its students eligible for free or reduced-fee lunch; 3) has a share of the total project cost, as calculated pursuant to provisions of this section, that would be greater than fifty percent; and 4) for all educational purposes, has a residential property tax rate of at least seven dollars ($7.00) on each one thousand dollars ($1,000) of taxable value, as measured by the sum of all rates imposed by resolution of the local school board plus rates set to pay interest and principal on outstanding school district general obligation bonds; or

(c) the school district has: 1) an enrollment growth rate over the previous school year of at least two and one-half percent; 2) pursuant to its five-year facilities plan, will be building a new school within the next two years; and 3) for all educational purposes, has a residential property tax rate of at least ten dollars ($10.00) on each one thousand dollars ($1,000) of taxable value, as measured by the sum of all rates imposed by resolution of the local school board plus rates set to pay interest and principal on outstanding school district general obligation bonds; and

(9) no application for grant assistance from the fund shall be approved unless the council determines that:

(a) the public school capital outlay project is needed and included in the school district's

five-year facilities plan among its top priorities;

(b) the school district has used its capital resources in a prudent manner;

(c) the school district has provided insurance for buildings of the school district in accordance with the provisions of Section 13-5-3 NMSA 1978;

(d) the school district has submitted a five-year facilities plan that includes: 1) enrollment projections; 2) a current preventive maintenance plan that has been approved by the council pursuant to Section 22-24-5.3 NMSA 1978 and that is followed by each public school in the district; 3) the capital needs of charter schools located in the school district; and 4) projections for the facilities needed in order to maintain a full-day kindergarten program;

(e) the school district is willing and able to pay any portion of the total cost of the public school capital outlay project that, according to Paragraph (5), (6) or (8) of this subsection, is not funded with grant assistance from the fund; provided that school district funds used for a project that was initiated after September 1, 2002 when the statewide adequacy standards were adopted, but before September 1, 2004 when the standards were first used as the basis for determining the state and school district share of a project, may be applied to the school district portion required for that project;

(f) the application includes the capital needs of any charter school located in the school district or the school district has shown that the facilities of the charter school have a smaller deviation from the statewide adequacy standards than other district facilities included in the application; and

(g) the school district has agreed, in writing, to comply with any reporting requirements or conditions imposed by the council pursuant to Section 22-24-5.1 NMSA 1978.

C. After consulting with the public school capital outlay oversight task force and other experts, the council shall regularly review and update statewide adequacy standards applicable to all school districts. The standards shall establish the acceptable level for the physical condition and capacity of buildings, the educational suitability of facilities and the need for technological infrastructure. Except as otherwise provided in the Public School Capital Outlay Act, the amount of outstanding deviation from the standards shall be used by the council in evaluating and prioritizing public school capital outlay projects.

D. It is the intent of the legislature that grant assistance made pursuant to this section allows every school district to meet the standards developed pursuant to Subsection C of this section; provided, however, that nothing in the Public School Capital Outlay Act or the development of standards pursuant to that act prohibits a school district from using local funds to exceed the statewide adequacy standards.

E. Upon request, the council shall work with, and provide assistance and information to, the public school capital outlay oversight task force.

F. The council may establish committees or task forces, not necessarily consisting of council members, and may use the committees or task forces, as well as existing agencies or organizations, to conduct studies, conduct surveys, submit recommendations or otherwise contribute expertise from the public schools, programs, interest groups and segments of society most concerned with a particular aspect of the council's work.

G. Upon the recommendation of the public school facilities authority, the council shall develop building standards for public school facilities and shall promulgate other such rules as are necessary to carry out the provisions of the Public School Capital Outlay Act.

H. No later than December 15 of each year, the council shall prepare a report summarizing its activities during the previous fiscal year. The report shall describe in detail all projects funded, the progress of projects previously funded but not completed, the criteria used to prioritize and fund projects and all other council actions. The report shall be submitted to the public education commission, the governor, the legislative finance committee, the legislative education study committee and the legislature."

Section 7. A new section of the Public School Capital Outlay Act, Section 22-24-5.8 NMSA 1978, is enacted to read:

"22-24-5.8. [NEW MATERIAL] PROCEDURES FOR A STATE- CHARTERED CHARTER SCHOOL.--A state-chartered charter school may apply for grant assistance for a capital project pursuant to the Public School Capital Outlay Act. All of the provisions of that act apply to such an application except:

A. the portion of the cost of the project to be paid from the fund shall be calculated pursuant to Paragraph (5) of Subsection B of Section 22-24-5 NMSA 1978 using data from the school district in which the state-chartered charter school is located;

B. the amount calculated pursuant to Subparagraph (p) of Paragraph (5) of Subsection B of Section 22-24-5 NMSA 1978 shall not be reduced pursuant to Paragraph (6) of that subsection but shall be reduced by the total of all legislative appropriations made after January 1, 2007 for nonoperating purposes either directly to the charter school or to another governmental entity for the purpose of passing the money through directly to the charter school. The reduction shall be made regardless of whether the charter school is a state-chartered charter school at the time of the appropriation or later opts to become a state-chartered charter school; and

C. in determining, pursuant to Subparagraph (e) of Paragraph (9) of Subsection B of Section 22-24-5 NMSA 1978, whether the state-chartered charter school is able to pay the portion of the total cost of the capital outlay project that is not funded with grant assistance from the fund, the council may award the grant assistance contingent upon the issuance of charter school bonds."

Section 8. Section 22-25-1 NMSA 1978 (being Laws 1975 (S.S.), Chapter 5, Section 1) is amended to read:

"22-25-1. SHORT TITLE.--[This act] Chapter 22, Article 25 NMSA 1978 may be cited as the "Public School Capital Improvements Act"."

Section 9. Section 22-25-3 NMSA 1978 (being Laws 1975 (S.S.), Chapter 5, Section 3, as amended) is amended to read:

"22-25-3. AUTHORIZATION FOR LOCAL SCHOOL BOARD TO SUBMIT QUESTION OF CAPITAL IMPROVEMENTS TAX IMPOSITION--DISTRIBUTION OF A PORTION OF THE PROCEEDS TO THE CHARTER SCHOOL BONDING FUND.--

A. A local school board may adopt a resolution to submit to the qualified electors of the school district the question of whether a property tax should be imposed upon the net taxable value of property allocated to the school district under the Property Tax Code at a rate not to exceed that specified in the resolution for the purpose of capital improvements [in the school district]. The resolution shall:

[A.] (1) identify the capital improvements for which the revenue proposed to be produced will be used, and, if a state-chartered charter school is physically located in the district, shall include a statement that a portion of the revenue will be used for capital improvements at state-chartered charter schools;

[B.] (2) specify the rate of the proposed tax, which shall not exceed two dollars ($2.00) on each one thousand dollars ($1,000) of net taxable value of property allocated to the school district under the Property Tax Code;

[C.] (3) specify the date an election will be held to submit the question of imposition of the tax to the qualified electors of the district; and

[D.] (4) limit the imposition of the proposed tax to no more than six property tax years.

B. Revenue from a tax approved by the qualified electors on or after July 1, 2007 and attributable to state- chartered charter schools located within the school district shall be distributed by the county treasurer directly to the charter school bonding fund. The amount of tax revenue attributable to each state-chartered charter school shall be determined each year and shall be the same proportion of the revenue as the full-time-equivalent enrollment of the state- chartered charter school on the fortieth day of the prior school year is to the total such enrollment in the district; provided that, in the case of a state-chartered charter school that had not commenced classroom instruction in the prior school year, the proportion shall be based on the estimated full-time-equivalent enrollment of the charter school and the school district on the fortieth day of the current school year, as determined by the department. The secretary shall calculate and notify the county treasurer of the proportion of the revenue to be distributed to the charter school bonding fund."

Section 10. A new section of the Public School Capital Improvements Act, Section 22-25-3.1 NMSA 1978, is enacted to read:

"22-25-3.1. [NEW MATERIAL] AUTHORIZATION FOR ADDITIONAL MILLAGE.--

A. In addition to the tax imposed pursuant to Section 22-25-3 NMSA 1978, a local school board may adopt a resolution to submit to the qualified electors of the school district the question of whether a property tax should be imposed upon the net taxable value of property allocated to the school district under the Property Tax Code at a rate not to exceed that specified in the resolution for the purpose of capital improvements in the school district. The resolution shall:

(1) identify the capital improvements for which the revenue proposed to be produced will be used, and, if a state-chartered charter school is physically located in the district, shall include a statement that a portion of the revenue will be used for capital improvements at state-chartered charter schools;

(2) specify the rate of the proposed tax, which shall not exceed one dollar ($1.00) on each one thousand dollars ($1,000) of net taxable value of property allocated to the school district under the Property Tax Code;

(3) specify the date an election will be held to submit the question of imposition of the tax to the qualified electors of the school district; and

(4) limit the imposition of the proposed tax to no more than six property tax years.

B. Revenue from a tax authorized by this section and approved by the qualified electors and attributable to state-chartered charter schools located within the school district shall be distributed by the county treasurer directly to the charter school bonding fund. The amount of tax revenue attributable to each state-chartered charter school shall be determined each year and shall be the same proportion of the revenue as the full-time-equivalent enrollment of the state- chartered charter school on the fortieth day of the prior school year is to the total such enrollment in the district; provided that, in the case of a state-chartered charter school that had not commenced classroom instruction in the prior school year, the proportion shall be based on the estimated full-time-equivalent enrollment of the charter school and the school district on the fortieth day of the current school year, as determined by the department. The secretary shall calculate and notify the county treasurer of the proportion of the revenue to be distributed to the charter school bonding fund.

C. All provisions of the Public School Capital Improvements Act that apply to the tax imposition provided for in Section 22-25-3 NMSA 1978 apply to the tax imposition provided for in this section except that a tax imposed pursuant to this section shall not be taken into account when calculating the state distribution pursuant to Section 22-25-9 NMSA 1978."

Section 11. Section 22-25-7 NMSA 1978 (being Laws 1975 (S.S.), Chapter 5, Section 7, as amended) is amended to read:

"22-25-7. IMPOSITION OF TAX--LIMITATION ON EXPENDITURES.--If as a result of an election held in accordance with the Public School Capital Improvements Act a majority of the qualified electors voting on the question vote in favor of the imposition of the tax, the tax rate shall be certified, unless the local school board requests by resolution that a rate be discontinued, by the department of finance and administration at the rate specified in the resolution authorized under Section 22-25-3 or 22-25-3.1 NMSA 1978 or at any lower rate required by operation of the rate limitation provisions of Section 7-37-7.1 NMSA 1978 upon the rate specified in the resolution and be imposed at the rate certified in accordance with the provisions of the Property Tax Code. The revenue produced by the tax and, except as provided in Subsection F, G or H of Section 22-25-9 NMSA 1978, any state distribution [resulting] to the district under the Public School Capital Improvements Act shall be expended only for the capital improvements specified in the authorizing resolution."

Section 12. Section 22-25-9 NMSA 1978 (being Laws 1975 (S.S.), Chapter 5, Section 9, as amended) is amended to read:

"22-25-9. STATE DISTRIBUTION TO SCHOOL DISTRICT IMPOSING TAX UNDER CERTAIN CIRCUMSTANCES.--

A. Except as provided in Subsection C, [or] G or H of this section, the secretary shall distribute to any school district that has imposed a tax [under the Public School Capital Improvements Act] authorized pursuant to Section 22-25-3 NMSA 1978 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, at the rate authorized pursuant to Section 22-25-3 NMSA 1978 and 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 the school district's first forty days' total program units by the amount specified in Subsection B 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; provided that no state distribution from the public school capital improvements fund may be used for capital improvements to any administration building of a school district. 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.

B. In calculating the state distribution pursuant to Subsection A of this section, the following amounts shall be used:

(1) the amount calculated pursuant to Subsection D of this [subsection] section per program unit; and

(2) an additional amount certified to the secretary by the public school capital outlay council. No later than June 1 of each year, the council shall determine the amount needed in the next fiscal year for public school capital outlay projects pursuant to the Public School Capital Outlay Act and the amount of revenue, from all sources, available for the projects. If, in the sole discretion of the council, the amount available exceeds the amount needed, the council may certify an additional amount pursuant to this paragraph; provided that the sum of the amount calculated pursuant to this paragraph plus the amount in Paragraph (1) of this subsection shall not result in a total statewide distribution that, in the opinion of the council, exceeds one-half of the total revenue estimated to be received from taxes imposed pursuant to the Public School Capital Improvements Act.

C. For any fiscal year, notwithstanding the amount calculated to be distributed pursuant to Subsections A and B of this section, except as provided in Subsection G or H of this section, a 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 E of this section, multiplied by the school district's first forty days' total program units and further multiplying the product obtained by the approved tax rate.

D. For purposes of calculating the distribution pursuant to Subsection B of this section, the amount used in Paragraph (1) of that subsection shall equal sixty dollars ($60.00) in fiscal year 2006 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.

E. For purposes of calculating the minimum distribution pursuant to Subsection C of this section, the amount used in that subsection shall equal five dollars ($5.00) through fiscal year 2005 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.

F. In expending distributions made pursuant to this section, school districts shall give priority to maintenance projects, including payments under contracts for maintenance support services. In addition, distributions made pursuant to this section may be expended by school districts for the school district portion of the total project cost for roof repair or replacement required by Section 22-24-4.3 NMSA 1978.

G. If a serious deficiency in a roof of a public school facility has been corrected pursuant to Section 22-24-4.4 NMSA 1978 and the school district has refused to pay its share of the cost as determined by that section, until the public school capital outlay fund is reimbursed in full for the share attributed to the district, the distribution calculated pursuant to this section shall not be made to the school district but shall be made to the public school capital outlay fund.

H. An amount attributable to state-chartered charter schools located in a school district shall not be distributed to the school district but shall be distributed by the secretary from the public school capital improvements fund to the charter school bonding fund. The total amount that would otherwise be distributed to a school district pursuant to this section, without considering the provisions of this subsection, shall be reduced by the amount attributable to the state-chartered charter schools located in that school district. The amount attributable to each state-chartered charter school shall be determined each year as follows:

(1) the full-time-equivalent enrollment of the state-chartered charter school on the fortieth day of the prior school year is divided by the total such enrollment at all public schools in the district; provided that, in the case of a state-chartered charter school that had not commenced classroom instruction in the prior school year, the estimated full-time-equivalent enrollment of the charter school and the school district on the fortieth day of the current school year shall be used, as determined by the department; and

(2) the amount attributable to the state- chartered charter school equals the quotient calculated in Paragraph (1) of this subsection multiplied by the total amount that would otherwise be distributed to the school district pursuant to this section, without considering the provisions of this subsection.

[H.] I. 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 13. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2007.

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