SB0098

SENATE BILL 98

51st legislature - STATE OF NEW MEXICO - first session, 2013

INTRODUCED BY

Carlos R. Cisneros

ENDORSED BY THE LEGISLATIVE FINANCE COMMITTEE

AN ACT

RELATING TO CAPITAL EXPENDITURES; AMENDING THE SEVERANCE TAX BONDING ACT TO TEMPORARILY ALLOW THE STATE BOARD OF FINANCE TO ISSUE SUPPLEMENTAL ROAD SEVERANCE TAX BONDS AND SUPPLEMENTAL HIGHER EDUCATION SEVERANCE TAX BONDS; CLARIFYING THE TYPES OF SUPPLEMENTAL SEVERANCE TAX BONDS; RECONCILING CONFLICTING AMENDMENTS TO THE SAME SECTION OF LAW BY REPEALING LAWS 2001, CHAPTER 37, SECTION 1; MAKING AN APPROPRIATION.

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

SECTION 1. Section 7-27-9 NMSA 1978 (being Laws 1961, Chapter 5, Section 7, as amended) is amended to read:

"7-27-9. BONDS--[TO BE KNOWN AS] SEVERANCE TAX BONDS AND SUPPLEMENTAL SEVERANCE TAX BONDS.--

A. Prior to July 1, 1999, all bonds issued wherein the money in the severance tax bonding fund is pledged for their retirement shall be known as "New Mexico severance tax bonds".

B. After July 1, 1999, there shall be two categories of bonds issued by the state board of finance wherein the money in the severance tax bonding fund is pledged for their retirement. Those bonds shall be known as "New Mexico severance tax bonds" and as "New Mexico supplemental severance tax bonds".

C. From July 1, 2014 through June 30, 2017, New Mexico supplemental severance tax bonds shall include:

(1) supplemental public school severance tax bonds used for public school capital outlay projects, as provided in Subsection A of Section 7-27-12.2 NMSA 1978;

(2) supplemental road severance tax bonds, used for construction, maintenance and improvements of state transportation projects as provided in Subsection D of Section 7-27-12.2 NMSA 1978; and

(3) supplemental higher education severance tax bonds, used for construction, maintenance and improvements of state higher education infrastructure projects as provided in Subsection G of Section 7-27-12.2 NMSA 1978.

D. On and after July 1, 2017, New Mexico supplemental severance tax bonds shall be used for public school capital outlay projects, as provided in Subsection A of Section 7-27-12.2 NMSA 1978."

SECTION 2. Section 7-27-12 NMSA 1978 (being Laws 1961, Chapter 5, Section 10, as amended by Laws 2001, Chapter 37, Section 1 and by Laws 2001, Chapter 338, Section 1) is amended to read:

"7-27-12. WHEN SEVERANCE TAX BONDS TO BE ISSUED--USE OF PROCEEDS.--

A. The state board of finance shall issue and sell all severance tax bonds when authorized to do so by any law that sets out the amount of the issue and the recipient of the money.

B. The state board of finance shall also issue and sell severance tax bonds authorized by Sections 72-14-36 through 72-14-42 NMSA 1978, and such authority as has been given to the interstate stream commission to issue and sell such bonds is transferred to the state board of finance. The state board of finance shall issue and sell all severance tax bonds only when so instructed by resolution of the governing body or by written direction from an authorized officer of the recipient of the bond money.

C. [Except as provided in Subsection D of this section] Proceeds from supplemental severance tax bonds shall be used [only for public school capital outlay projects pursuant to the Public School Capital Outlay Act or the Public School Capital Improvements Act] as follows:

(1) proceeds from supplemental public school severance tax bonds issued pursuant to Subsection A of Section 7-27-12.2 NMSA 1978 shall be used for the purposes specified in that subsection;

[D.] (2) proceeds from supplemental severance tax bonds issued pursuant to Paragraph (2) of Subsection A of Section 19 of Chapter 6 of Laws 1999 (1st S.S.) shall be used for the purposes specified in that paragraph;

[E. Except as provided in Subsection F of this section]

(3) proceeds from supplemental road severance tax bonds issued pursuant to Subsection D of Section 7-27-12.2 NMSA 1978 shall be used for the purposes specified in that subsection; and

(4) proceeds from supplemental higher education severance tax bonds issued pursuant to Subsection G of Section 7-27-12.2 NMSA 1978 shall be used for the purposes specified in that subsection.

D. The state board of finance shall:

(1) issue and sell all supplemental public school severance tax bonds when so instructed by resolution of the public school capital outlay council pursuant to Section 7-27-12.2 NMSA 1978;

(2) issue and sell all supplemental road severance tax bonds when so instructed by resolution of the state transportation commission pursuant to Section 7-27-12.2 NMSA 1978; and

(3) issue and sell all supplemental higher education severance tax bonds when so instructed by resolution of the higher education department pursuant to Section 7-27-12.2 NMSA 1978.

[F.] E. The state board of finance shall issue and sell supplemental severance tax bonds authorized by Paragraph (2) of Subsection A of Section 19 of Chapter 6 of Laws 1999 (1st S.S.) when so instructed by resolution of the [commission on] higher education department."

SECTION 3. Section 7-27-12.2 NMSA 1978 (being Laws 2001, Chapter 338, Section 2, as amended) is amended to read:

"7-27-12.2. SUPPLEMENTAL PUBLIC SCHOOL SEVERANCE TAX BONDS--PUBLIC SCHOOL CAPITAL OUTLAY PROJECTS--SUPPLEMENTAL ROAD AND HIGHER EDUCATION SEVERANCE TAX BONDS.--

A. The public school capital outlay council is authorized to certify by resolution that proceeds of supplemental public school severance tax bonds are needed for expenditures relating to public school capital outlay projects pursuant to the Public School Capital Outlay Act or for the state distribution for public school capital improvements pursuant to the Public School Capital Improvements Act. The resolution shall specify the total amount needed.

B. The state board of finance may issue and sell supplemental public school severance tax bonds in compliance with the Severance Tax Bonding Act when the public school capital outlay council certifies by resolution the need for the issuance of the bonds. The amount of the bonds sold at each sale shall not exceed the lesser of the amount certified by the council or the amount that may be issued pursuant to the restrictions of Section 7-27-14 NMSA 1978.

[C. The state board of finance shall schedule the issuance and sale of the bonds in the most expeditious and economical manner possible.

D.] C. The proceeds from the sale of the supplemental public school severance tax bonds are appropriated as follows:

(1) the amount certified by the secretary of public education as necessary to make the distribution pursuant to Section 22-25-9 NMSA 1978 is appropriated to the public school capital improvements fund for the purpose of carrying out the provisions of the Public School Capital Improvements Act; and

(2) the remainder of the proceeds is appropriated to the public school capital outlay fund for the purpose of carrying out the provisions of the Public School Capital Outlay Act.

D. The state transportation commission is authorized to certify by resolution that proceeds of supplemental road severance tax bonds are needed for eligible projects related to construction, maintenance and improvements of state transportation infrastructure. The resolution shall specify the total amount needed.

E. The state board of finance may issue and sell supplemental road severance tax bonds in compliance with the Severance Tax Bonding Act when the state transportation commission certifies by resolution the need for the issuance of the bonds. The amount of the bonds sold at each sale shall not exceed the lesser of the amount certified by the commission or the amount that may be issued pursuant to the restrictions provided in Section 7-27-14 NMSA 1978.

F. The proceeds from the sale of the supplemental road severance tax bonds are appropriated to the state road fund for eligible projects as provided in Subsection D of this section.

G. The higher education department is authorized to certify by resolution that proceeds of supplemental higher education severance tax bonds are needed for eligible projects related to construction, maintenance and improvements of higher education infrastructure. The resolution shall specify the total amount needed.

H. The state board of finance may issue and sell supplemental higher education severance tax bonds in compliance with the Severance Tax Bonding Act when the higher education department certifies by resolution the need for the issuance of the bonds. The amount of the bonds sold at each sale shall not exceed the lesser of the amount certified by the department or the amount that may be issued pursuant to the restrictions provided in Section 7-27-14 NMSA 1978.

I. The proceeds from the sale of the supplemental higher education severance tax bonds are appropriated to the higher education department for eligible projects as provided in Subsection G of this section.

J. For the purpose of this section, "eligible project" means a project that is ready to begin expending funds within twelve months of issuance of bonds and that has been specifically authorized by law.

K. The state board of finance shall schedule the issuance and sale of supplemental severance tax bonds in the most expeditious and economical manner possible."

SECTION 4. Section 7-27-14 NMSA 1978 (being Laws 1961, Chapter 5, Section 11, as amended) is amended to read:

"7-27-14. AMOUNT OF TAX--SECURITY FOR BONDS.--

A. The legislature shall provide for the continued assessment, levy, collection and deposit into the severance tax bonding fund of the tax or taxes upon natural resource products severed and saved from the soil of the state that, together with such other income as may be deposited to the fund, will be sufficient to produce an amount that is at least the amount necessary to meet annual debt service charges on all outstanding severance tax bonds and supplemental severance tax bonds.

B. Except as otherwise specifically provided by law, the state board of finance shall not issue [no] severance tax bonds unless the aggregate amount of severance tax bonds outstanding, and including the issue proposed, can be serviced with not more than fifty percent of the annual deposits into the severance tax bonding fund, as determined by the deposits during the preceding fiscal year.

C. The state board of finance shall not issue [no] supplemental public school severance tax bonds with a term that extends beyond the fiscal year in which the bonds are issued unless the aggregate amount of severance tax bonds and supplemental severance tax bonds outstanding, and including the issue proposed, can be serviced with not more than sixty-two and one-half percent of the annual deposits into the severance tax bonding fund, as determined by the deposits during the preceding fiscal year.

D. Except as otherwise specifically provided by law, the state board of finance may issue supplemental road severance tax bonds with a term that does not extend beyond the fiscal year in which they are issued if:

(1) the debt service on such supplemental road severance tax bonds when added to the debt service previously paid or scheduled to be paid during that fiscal year on severance tax bonds does not exceed sixty-seven percent of the deposits into the severance tax bonding fund during the preceding fiscal year; and

(2) the debt service for supplemental road severance tax bonds does not exceed four and one-half percent of the deposits into the severance tax bonding fund during the preceding fiscal year.

E. Except as otherwise specifically provided by law, the state board of finance may issue supplemental higher education severance tax bonds with a term that does not extend beyond the fiscal year in which they are issued if:

(1) the debt service on such supplemental higher education severance tax bonds when added to the debt service previously paid or scheduled to be paid during that fiscal year on severance tax bonds and supplemental road severance tax bonds does not exceed seventy-one and one-half percent of the deposits into the severance tax bonding fund during the preceding fiscal year; and

(2) the debt service for supplemental higher education severance tax bonds does not exceed four and one-half percent of the deposits into the severance tax bonding fund during the preceding fiscal year.

[D.] F. Except as otherwise specifically provided by law, the state board of finance may issue supplemental public school severance tax bonds with a term that does not extend beyond the fiscal year in which they are issued if the debt service on such supplemental public school severance tax bonds when added to the debt service previously paid or scheduled to be paid during that fiscal year on severance tax bonds, [and] supplemental public school severance tax bonds, supplemental road severance tax bonds and supplemental higher education severance tax bonds does not exceed ninety-five percent of the deposits into the severance tax bonding fund during the preceding fiscal year.

[E.] G. The provisions of this section shall not be modified by the terms of any severance tax bonds or supplemental severance tax bonds hereafter issued."

SECTION 5. Section 7-27-12 NMSA 1978 (being Laws 1961, Chapter 5, Section 10, as amended by Section 2 of this act) is repealed and a new Section 7-27-12 NMSA 1978 is enacted to read:

"7-27-12. [NEW MATERIAL] WHEN SEVERANCE TAX BONDS TO BE ISSUED.--

A. The state board of finance shall issue and sell all severance tax bonds when authorized to do so by any law that sets out the amount of the issue and the recipient of the money.

C. Except as provided in Subsection D of this section, proceeds from supplemental severance tax bonds shall be used only for public school capital outlay projects pursuant to the Public School Capital Outlay Act or the Public School Capital Improvements Act.

D. Proceeds from supplemental severance tax bonds issued pursuant to Paragraph (2) of Subsection A of Section 19 of Chapter 6 of Laws 1999 (1st S.S.) shall be used for the purposes specified in that paragraph.

E. Except as provided in Subsection F of this section, the state board of finance shall issue and sell all supplemental severance tax bonds when so instructed by resolution of the public school capital outlay council pursuant to Section 7-27-12.2 NMSA 1978.

F. The state board of finance shall issue and sell supplemental severance tax bonds authorized by Paragraph (2) of Subsection A of Section 19 of Chapter 6 of Laws 1999 (1st S.S.) when so instructed by resolution of the higher education department."

SECTION 6. Section 7-27-12.2 NMSA 1978 (being Laws 2001, Chapter 338, Section 2, as amended by Section 3 of this act) is repealed and a new Section 7-27-12.2 NMSA 1978 is enacted to read:

"7-27-12.2. [NEW MATERIAL] SUPPLEMENTAL SEVERANCE TAX BONDS--PUBLIC SCHOOL CAPITAL OUTLAY PROJECTS.--

A. The public school capital outlay council is authorized to certify by resolution that proceeds of supplemental severance tax bonds are needed for expenditures relating to public school capital outlay projects pursuant to the Public School Capital Outlay Act or for the state distribution for public school capital improvements pursuant to the Public School Capital Improvements Act. The resolution shall specify the total amount needed.

B. The state board of finance may issue and sell supplemental severance tax bonds in compliance with the Severance Tax Bonding Act when the public school capital outlay council certifies by resolution the need for the issuance of the bonds. The amount of the bonds sold at each sale shall not exceed the lesser of the amount certified by the council or the amount that may be issued pursuant to the restrictions of Section 7-27-14 NMSA 1978.

C. The state board of finance shall schedule the issuance and sale of the bonds in the most expeditious and economical manner possible.

D. The proceeds from the sale of the bonds are appropriated as follows:

(2) the remainder of the proceeds is appropriated to the public school capital outlay fund for the purpose of carrying out the provisions of the Public School Capital Outlay Act."

SECTION 7. Section 7-27-14 NMSA 1978 (being Laws 1961, Chapter 5, Section 11, as amended by Section 4 of this act) is repealed and a new Section 7-27-14 NMSA 1978 is enacted to read:

"7-27-14. [NEW MATERIAL] AMOUNT OF TAX--SECURITY FOR BONDS.--

B. Except as otherwise specifically provided by law, the state board of finance shall issue no severance tax bonds unless the aggregate amount of severance tax bonds outstanding, and including the issue proposed, can be serviced with not more than fifty percent of the annual deposits into the severance tax bonding fund, as determined by the deposits during the preceding fiscal year.

C. The state board of finance shall issue no supplemental severance tax bonds with a term that extends beyond the fiscal year in which the bonds are issued unless the aggregate amount of severance tax bonds and supplemental severance tax bonds outstanding, and including the issue proposed, can be serviced with not more than sixty-two and

one-half percent of the annual deposits into the severance tax bonding fund, as determined by the deposits during the preceding fiscal year.

D. Except as otherwise specifically provided by law, the state board of finance may issue supplemental severance tax bonds with a term that does not extend beyond the fiscal year in which they are issued if the debt service on such supplemental severance tax bonds when added to the debt service previously paid or scheduled to be paid during that fiscal year on severance tax bonds and supplemental severance tax bonds does not exceed ninety-five percent of the deposits into the severance tax bonding fund during the preceding fiscal year.

E. The provisions of this section shall not be modified by the terms of any severance tax bonds or supplemental severance tax bonds hereafter issued."

SECTION 8. REPEAL.--Laws 2001, Chapter 37, Section 1 is repealed.

SECTION 9. EFFECTIVE DATE.--

A. The effective date of the provisions of Sections 1 through 4 and 8 of this act is July 1, 2014.

B. The effective date of the provisions of Sections 5 through 7 of this act is July 1, 2017.

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