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AN ACT

RELATING TO FINANCE; CREATING AN EXEMPTION FROM THE

GOVERNMENTAL GROSS RECEIPTS TAX FOR UNIVERSITY RECEIPTS FROM

THE IMPOSITION OF AN ATHLETIC FACILITY SURCHARGE; ENACTING

THE UNIVERSITY ATHLETIC FACILITY FUNDING ACT; PERMITTING

CERTAIN UNIVERSITIES TO ISSUE REVENUE BONDS; AUTHORIZING

CERTAIN UNIVERSITIES TO IMPOSE A SURCHARGE ON REVENUES

ARISING FROM ACTIVITIES AT UNIVERSITY ATHLETIC FACILITIES;

MAKING AN APPROPRIATION; DECLARING AN EMERGENCY.

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

Section 1. A new section of the Gross Receipts and

Compensating Tax Act is enacted to read:

"EXEMPTION--GROSS RECEIPTS TAX AND GOVERNMENTAL GROSS

RECEIPTS TAX--ATHLETIC FACILITY SURCHARGE.--Exempted from the

gross receipts tax and from the governmental gross receipts

tax are the receipts of a university from an athletic

facility surcharge imposed pursuant to the University

Athletic Facility Funding Act."

Section 2. SHORT TITLE.--Sections 2 through 11 of this

act may be cited as the "University Athletic Facility Funding

Act".

Section 3. DEFINITIONS.--As used in the University

Athletic Facility Funding Act:

A. "athletic facility revenues" means rentals,

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receipts, fees or other charges imposed by and paid to a

university for the rights to use, operate or manage a

university athletic facility by any person;

B. "athletic facility surcharge" means a surcharge

to be included in each vendor contract on tickets, parking,

souvenirs, concessions, programs, advertising, merchandise,

corporate suites or boxes, broadcast revenues and all other

products or services sold at or related to a university

athletic facility or related to activities occurring at a

university athletic facility;

C. "board" means the board of regents of a

university;

D. "bonds" means athletic facility revenue bonds

issued by a university to pay for some or all of the costs of

designing, purchasing, constructing, remodeling,

rehabilitating, renovating, improving, equipping and

furnishing a university athletic facility;

E. "president" means the president of a university

or a person designated by the president of a university;

F. "university" means a four-year post-secondary

educational institution confirmed by Article 12, Section 11

of the constitution of New Mexico and the main campus of

which is located in a class A county;

G. "university athletic facility" means an indoor

or outdoor athletic facility, including buildings and related

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improvements, primarily designed and intended for university

sporting events, but also available for non-university

sporting events and university and community cultural,

educational and entertainment events;

H. "vendor" means every person, corporation,

partnership or other entity, including a division or

department of a university, providing products or services

sold at or related to a university athletic facility; and

I. "vendor contract" means a written arrangement

between a university and a vendor pursuant to which the

vendor provides products or services sold at or related to

the university athletic facility.

Section 4. ISSUANCE OF BONDS.--

A. With the approval of the higher education

department and the state board of finance, pursuant to a

resolution of the board of regents, a university that has

imposed an athletic facility surcharge may issue athletic

facility revenue bonds to pay for some or all of the costs of

designing, purchasing, constructing, remodeling, renovating,

rehabilitating, improving, equipping or furnishing a

university athletic facility that has a seating capacity of

twelve thousand or more.

B. The bonds shall bear interest at a rate or

rates as authorized in the Public Securities Act, and the

first interest payment may be for any period authorized in

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the Public Securities Act.

C. The bonds shall be secured by athletic facility

revenues and athletic facility surcharge receipts.

D. The university shall establish an "athletic

facility bonding fund" for deposit of all athletic facility

revenues and athletic facility surcharge proceeds. Money in

the fund may be used to pay:

(1) payments of principal, interest or prior

redemption premiums due in connection with, and any other

charges pertaining to, the bonds, including payments into any

sinking fund or reserve fund required by the bond resolution;

(2) costs of operating a university athletic

facility during the life of the bonds, provided that no such

costs shall be paid if there are current payments due

pursuant to Paragraph (1) of this subsection;

(3) costs of constructing, renovating,

equipping, maintaining or improving a university athletic

facility, provided that no such costs shall be paid if there

are current payments due pursuant to Paragraph (1) of this

subsection; or

(4) costs of collecting or administering the

athletic facility surcharge, provided that no such costs

shall be paid if there are current payments due pursuant to

Paragraph (1) of this subsection.

E. Bonds issued pursuant to the University

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Athletic Facility Funding Act shall be payable solely from

the athletic facility bonding fund 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 that act 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 is

pledged.

F. The state does hereby pledge that the athletic

facility bonding fund shall be used only for the purposes

specified in this section and pledged first to pay the debt

service on the bonds. The state further pledges that any law

authorizing the imposition of the athletic facility surcharge

and the dedication of revenues to 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. The university shall not repeal, amend or otherwise

modify the bond resolution or the resolution imposing the

athletic facility surcharge in such a manner that adversely

affects or impairs the athletic facility surcharge or any

bonds secured by a pledge of the athletic facility revenues

and athletic facility surcharge receipts unless the bonds

have been paid in full or provisions have been made for full

payment.

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Section 5. ATHLETIC FACILITY REVENUE BONDS--FULL

AUTHORITY TO ISSUE--BONDS ARE LEGAL INVESTMENTS.--

A. The University Athletic Facility Bonding Act

shall, without reference to any other act of the legislature,

be full authority for the issuance and sale of athletic

facility revenue 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. Athletic facility revenue 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 6. BONDS TAX EXEMPT.--All athletic facility

revenue bonds shall be exempt from taxation by the state or

any of its political subdivisions.

Section 7. AUTHORIZATION OF SURCHARGE AND OTHER FEES--

USE OF PROCEEDS--TRANSFER.--

A. The board may establish by resolution an

athletic facility surcharge of not less than five percent but

not to exceed twenty-five percent of the revenues received by

a vendor pursuant to each vendor contract entered into by the

university.

B. The athletic facility surcharge shall be

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imposed only for the period necessary for payment of

principal and interest on the bonds issued to accomplish the

purpose for which the revenue is dedicated, but the period

shall not exceed thirty years from the date of the resolution

imposing the surcharge.

C. A university that has established an athletic

facility surcharge shall include the surcharge in the terms

of each vendor contract into which it enters.

D. A university may establish charges and fees

deemed necessary by the board or the president for the use,

operation or management of a university athletic facility by

a person other than the university.

Section 8. COLLECTION OF ATHLETIC FACILITY SURCHARGE--

REMITTANCE TO UNIVERSITY.--

A. Upon the sale of a product or service subject

to the athletic facility surcharge, a vendor shall collect

the athletic facility surcharge from the purchaser of that

product or service on behalf of the university and shall act

as a trustee for the surcharge receipts. A purchaser of a

product or service subject to the athletic facility surcharge

shall be charged separately for the athletic facility

surcharge from the cost of the product or service, or the

vendor shall institute accounting controls or procedures

sufficient to identify the amount of the surcharge owed to a

university for each sale, transaction or exchange subject to

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the surcharge. Receipts from the athletic facility surcharge

shall be remitted by a vendor to the president no later than

the tenth day of the month following the collection of the

surcharge.

B. The president shall deposit university athletic

facility revenues and athletic facility surcharge receipts

into the athletic facility bonding fund and act as trustee of

the revenue on behalf of bondholders pursuant to the

University Athletic Facility Funding Act so long as any bonds

remain outstanding.

Section 9. AUDITS.--The board shall provide by

resolution a method to audit or otherwise ensure that vendors

subject to the athletic facility surcharge collect and remit

to the president the full amount of the surcharge receipts

due to the university.

Section 10. ENFORCEMENT--PENALTIES.--

A. An action to enforce the imposition and

collection of an athletic facility surcharge by a vendor may

be brought by a university.

B. A district court may issue an appropriate

judgment, order or remedy to enforce the provisions of a

vendor contract.

C. A judgment issued by a district court requiring

athletic facility surcharge receipts to be paid to a

university by a vendor shall also award interest at an annual

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rate of twelve percent on past due amounts, attorney fees and

costs to a university.

Section 11. LIBERAL INTERPRETATION.--The University

Athletic Facility Funding Act shall be liberally construed to

carry out its purpose.

Section 12. EMERGENCY.--It is necessary for the public

peace, health and safety that this act take effect

immediately.