SENATE BILL 185

49th legislature - STATE OF NEW MEXICO - second session, 2010

INTRODUCED BY

Michael S. Sanchez

AN ACT

RELATING TO PUBLIC EXPENDITURES; AUTHORIZING SHORT-TERM SEVERANCE TAX BONDS TO BE ISSUED IN FISCAL YEAR 2011 FOR THE PURPOSE OF AVOIDING SALARY REDUCTIONS MADE BY THE SECOND SESSION OF THE FORTY-NINTH LEGISLATURE FOR EMPLOYEES WHOSE SALARIES ARE DERIVED FROM THE GENERAL FUND; AUTHORIZING FUND TRANSFERS TO AVOID SALARY REDUCTIONS FOR EMPLOYEES WHOSE SALARIES ARE DERIVED FROM OTHER STATE FUNDS; MAKING APPROPRIATIONS.

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

     Section 1. SHORT-TERM SEVERANCE TAX BONDS ISSUED IN FISCAL YEAR 2011 TO AVOID SALARY REDUCTIONS.--

          A. In fiscal year 2011, when the secretary of finance and administration certifies the need for the bonds, the state board of finance may issue and sell severance tax bonds with a term that does not extend beyond the end of fiscal year 2011 in an aggregate amount not to exceed seventy-six million three hundred thousand dollars ($76,300,000) for the purposes stated in this section.

          B. The state board of finance shall schedule the issuance and sale of the bonds in the most expeditious and economical manner possible. The state board of finance shall further take the appropriate steps necessary to comply with the Internal Revenue Code of 1986, as amended.

          C. Proceeds from the sale of the bonds shall be used to avoid a salary reduction enacted by the second session of the forty-ninth legislature for public employees whose salary is derived from the general fund. The proceeds are appropriated as follows:

                (1) sixteen million eight hundred thousand dollars ($16,800,000) is appropriated to the department of finance and administration for expenditure in fiscal year 2011 to avoid the salary reduction for employees in budgeted positions in the executive, legislative and judicial branches. The department of finance and administration shall distribute a sufficient amount to each agency to avoid the appropriate salary reduction for those employees whose salaries are reduced in the General Appropriation Act of 2010. Any unexpended or unencumbered balance remaining at the end of fiscal year 2011 shall revert to the severance tax bonding fund;

                (2) forty million five hundred thousand dollars ($40,500,000) is appropriated to the state equalization guarantee distribution to supplement the appropriation made in the General Appropriation Act of 2010 and is intended to avoid the salary reduction for public school employees made in that act;

                (3) nine hundred thousand dollars ($900,000) is appropriated to the transportation distribution to supplement the appropriation made in the General Appropriation Act of 2010 and is intended to avoid the salary reduction for transportation employees made in that act; and

                (4) eighteen million one hundred thousand dollars ($18,100,000) is appropriated to the higher education department for expenditure in fiscal year 2011 to avoid the salary reduction for faculty and staff of four- and two-year post-secondary educational institutions. The higher education department shall distribute a sufficient amount to each institution to avoid the appropriate salary reduction for those employees whose salaries are reduced in the General Appropriation Act of 2010. Any unexpended or unencumbered balance remaining at the end of fiscal year 2011 shall revert to the severance tax bonding fund.

          D. If the appropriation made in Paragraph (1) or (4) of Subsection C of this section is insufficient to fully avoid the salary reductions, then the appropriated amount shall be distributed proportionately so that each employee's salary will be reduced by the same percentage.

          E. Notwithstanding the provisions of any other law, the severance tax bonds authorized and sold pursuant to this section and the appropriation of bond proceeds shall be deemed to be for a project for purposes of the Severance Tax Bonding Act.

          F. The authorization in this section to issue severance tax bonds is contingent upon the enactment into law by the second session of the forty-ninth legislature of a provision in the General Appropriation Act of 2010 that reduces the salaries of public employees whose salaries are derived from the general fund.

     Section 2. AUTHORITY TO AVOID SALARY REDUCTIONS FOR EMPLOYEES WHOSE SALARIES ARE NOT DERIVED FROM THE GENERAL FUND.--For those state employees whose salaries are referenced in or received as a result of nongeneral fund appropriations in the General Appropriation Act of 2010 and whose salaries have been reduced in that act, the department of finance and administration shall transfer from the appropriate fund to the appropriate agency the amount required to avoid a salary reduction of up to two percent, and such amounts are appropriated for expenditure in fiscal year 2011. Any unexpended balances remaining at the end of fiscal year 2011 shall revert to the appropriate fund.