SENATE BILL 326

52nd legislature - STATE OF NEW MEXICO - first session, 2015

INTRODUCED BY

Stuart Ingle

AN ACT

RELATING TO PUBLIC FINANCE; PROVIDING FOR INCREASED DISTRIBUTIONS TO THE SEVERANCE TAX PERMANENT FUND BY PHASING IN REDUCTIONS TO SUPPLEMENTAL SEVERANCE TAX BONDING CAPACITY.

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

     SECTION 1. 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 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] the following percentages of the average of the deposits into the severance tax bonding fund during the [preceding] current fiscal year as estimated by the division and the deposits into the severance tax bonding fund for each of the immediately preceding four fiscal years:

                (1) for fiscal year 2016, ninety-five percent;

                (2) for fiscal year 2017, ninety-three percent;

                (3) for fiscal year 2018, ninety-one percent;

                (4) for fiscal year 2019, eighty-nine percent;

                (5) for fiscal year 2020, eighty-seven percent; and

                (6) for fiscal year 2021 and each subsequent fiscal year, eighty-five percent.

          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.

          F. For the purposes of this section, "division" means the board of finance division of the department of finance and administration."

     SECTION 2. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2015.

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