SENATE BILL 592
52nd legislature - STATE OF NEW MEXICO - first session, 2015
INTRODUCED BY
George K. Munoz
AN ACT
RELATING TO EDUCATION; DEFINING "SCHOOL BUILDING" AND "PUBLIC SCHOOL BUILDING" WITHIN CERTAIN ARTICLES OF CHAPTER 22 NMSA 1978; REQUIRING EXPENDITURES FROM THE PUBLIC SCHOOL CAPITAL OUTLAY FUND FOR DEBT SERVICE OR LOAN PAYMENTS FOR CERTAIN SCHOOL DISTRICTS; PERMITTING ISSUANCE OF SUPPLEMENTAL SEVERANCE TAX BONDS FOR THOSE EXPENDITURES; MAKING APPROPRIATIONS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. 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.--
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 or other purposes provided 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 [commission on] higher education department."
SECTION 2. 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 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 or other purposes provided 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:
(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."
SECTION 3. Section 22-18-1 NMSA 1978 (being Laws 1967, Chapter 16, Section 228, as amended) is amended to read:
"22-18-1. GENERAL OBLIGATION BONDS--AUTHORITY TO ISSUE.--
A. For purposes of this section, "school building" means a public school building, public school administration building or any related public school structure or facility, including teacher housing in school districts with schools located in sparsely populated, isolated, rural areas, that is owned, acquired or constructed by a school district as necessary to carry out the functions of the school district.
[A.] B. After consideration of the priorities for the school district's capital needs as shown by the facility assessment database maintained by the public school facilities authority and subject to the provisions of Article 9, Section 11 of the constitution of New Mexico and Sections 6-15-1 and 6-15-2 NMSA 1978, a school district may issue general obligation bonds for the purpose of:
(1) erecting, remodeling, making additions to and furnishing school buildings;
(2) purchasing or improving school grounds;
(3) purchasing computer software and hardware for student use in public schools;
(4) providing matching funds for capital outlay projects funded pursuant to the Public School Capital Outlay Act; or
(5) any combination of these purposes.
[B.] C. The bonds shall be fully negotiable and constitute negotiable instruments within the meaning and for all purposes of the Uniform Commercial Code."
SECTION 4. Section 22-24-3 NMSA 1978 (being Laws 1975, Chapter 235, Section 3, as amended) is amended to read:
"22-24-3. DEFINITIONS.--As used in the Public School Capital Outlay Act:
A. "constitutional special schools" means the
New Mexico school for the blind and visually impaired and the New Mexico school for the deaf;
B. "constitutional special schools support spaces" means all facilities necessary to support the constitutional special schools' educational mission that are not included in the constitutional special schools' educational adequacy standards, including, but not limited to, performing arts centers, facilities for athletic competition, school district administration and facility and vehicle maintenance;
C. "council" means the public school capital outlay council;
D. "education technology infrastructure" means the physical hardware used to interconnect education technology equipment for school districts and school buildings necessary to support broadband connectivity as determined by the council;
E. "fund" means the public school capital outlay fund; [and]
F. "school building" means a public school building, public school administration building or any related public school structure or facility, including teacher housing in school districts with schools located in sparsely populated, isolated, rural areas, that is owned, acquired or constructed by a school district as necessary to carry out the functions of the school district; and
[F.] G. "school district" includes state-chartered charter schools and the constitutional special schools."
SECTION 5. Section 22-24-4 NMSA 1978 (being Laws 1975, Chapter 235, Section 4, as amended) is amended to read:
"22-24-4. PUBLIC SCHOOL CAPITAL OUTLAY FUND
CREATED--USE.--
A. The "public school capital outlay fund" is created. Balances remaining in the fund at the end of each fiscal year shall not revert.
B. Except as provided in Subsections G and I through M of this section, money in the fund may be used only for capital expenditures deemed necessary by the council for an adequate educational program.
C. The council may authorize the purchase by the public school facilities authority of portable classrooms to be loaned to school districts to meet a temporary requirement. Payment for these purchases shall be made from the fund. Title to and custody of the portable classrooms shall rest in the public school facilities authority. The council shall authorize the lending of the portable classrooms to school districts upon request and upon finding that sufficient need exists. Application for use or return of state-owned portable classroom buildings shall be submitted by school districts to the council. Expenses of maintenance of the portable classrooms while in the custody of the public school facilities authority shall be paid from the fund; expenses of maintenance and insurance of the portable classrooms while in the custody of a school district shall be the responsibility of the school district. The council may authorize the permanent disposition of the portable classrooms by the public school facilities authority with prior approval of the state board of finance.
D. Applications for assistance from the fund shall be made by school districts to the council in accordance with requirements of the council. Except as provided in Subsection K of this section, the council shall require as a condition of application that a school district have a current five-year facilities plan, which shall include a current preventive maintenance plan to which the school adheres for each public school in the school district.
E. The council shall review all requests for assistance from the fund and shall allocate funds only for those capital outlay projects that meet the criteria of the Public School Capital Outlay Act.
F. Money in the fund shall be disbursed by warrant of the department of finance and administration on vouchers signed by the secretary of finance and administration following certification by the council that an application has been approved or an expenditure has been ordered by a court pursuant to Section 22-24-5.4 NMSA 1978. At the discretion of the council, money for a project shall be distributed as follows:
(1) up to ten percent of the portion of the project cost funded with distributions from the fund or five percent of the total project cost, whichever is greater, may be paid to the school district before work commences with the balance of the grant award made on a cost-reimbursement basis; or
(2) the council may authorize payments directly to the contractor.
G. Balances in the fund may be annually appropriated for the core administrative functions of the public school facilities authority pursuant to the Public School Capital Outlay Act, and, in addition, balances in the fund may be expended by the public school facilities authority, upon approval of the council, for project management expenses; provided that:
(1) the total annual expenditures from the fund for the core administrative functions pursuant to this subsection shall not exceed five percent of the average annual grant assistance authorized from the fund during the three previous fiscal years; and
(2) any unexpended or unencumbered balance remaining at the end of a fiscal year from the expenditures authorized in this subsection shall revert to the fund.
H. Up to ten million dollars ($10,000,000) of the fund may be allocated annually by the council for expenditure in fiscal years 2010 through 2015 for a roof repair and replacement initiative with projects to be identified by the council pursuant to Section 22-24-4.3 NMSA 1978; provided that money allocated pursuant to this subsection shall be expended within two years of the allocation.
I. The fund may be expended annually by the council for grants to school districts for the purpose of making lease payments for classroom facilities, including facilities leased by charter schools. The grants shall be made upon application by the school districts and pursuant to rules adopted by the council; provided that an application on behalf of a charter school shall be made by the school district, but, if the school district fails to make an application on behalf of a charter school, the charter school may submit its own application. The following criteria shall apply to the grants:
(1) the amount of a grant to a school district shall not exceed:
(a) the actual annual lease payments owed for leasing classroom space for schools, including charter schools, in the district; or
(b) seven hundred dollars ($700) multiplied by the number of MEM using the leased classroom facilities; provided that in fiscal year 2009 and in each subsequent fiscal year, this amount shall be adjusted by the percentage change between the penultimate calendar year and the immediately preceding calendar year of the consumer price index for the United States, all items, as published by the United States department of labor;
(2) a grant received for the lease payments of a charter school may be used by that charter school as a state match necessary to obtain federal grants pursuant to the federal No Child Left Behind Act of 2001;
(3) at the end of each fiscal year, any unexpended or unencumbered balance of the appropriation shall revert to the fund;
(4) no grant shall be made for lease payments due pursuant to a financing agreement under which the facilities may be purchased for a price that is reduced according to the lease payments made unless:
(a) the agreement has been approved pursuant to the provisions of the Public School Lease Purchase Act; and
(b) the facilities are leased by a charter school;
(5) if the lease payments are made pursuant to a financing agreement under which the facilities may be purchased for a price that is reduced according to the lease payments made, neither a grant nor any provision of the Public School Capital Outlay Act creates a legal obligation for the school district or charter school to continue the lease from year to year or to purchase the facilities nor does it create a legal obligation for the state to make subsequent grants pursuant to the provisions of this subsection; and
(6) as used in this subsection:
(a) "MEM" means: 1) the average
full-time-equivalent enrollment using leased classroom facilities on the eightieth and one hundred twentieth days of the prior school year; or 2) in the case of an approved charter school that has not commenced classroom instruction, the estimated full-time-equivalent enrollment that will use leased classroom facilities in the first year of instruction, as shown in the approved charter school application; provided that, after the eightieth day of the school year, the MEM shall be adjusted to reflect the full-time-equivalent enrollment on that date; and
(b) "classroom facilities" or "classroom space" includes the space needed, as determined by the minimum required under the statewide adequacy standards, for the direct administration of school activities.
J. In addition to other authorized expenditures from the fund, up to one percent of the average grant assistance authorized from the fund during the three previous fiscal years may be expended in each fiscal year by the public school facilities authority to pay the state fire marshal, the construction industries division of the regulation and licensing department and local jurisdictions having authority from the state to permit and inspect projects for expenditures made to permit and inspect projects funded in whole or in part under the Public School Capital Outlay Act. The public school facilities authority may enter into contracts with the state fire marshal, the construction industries division or the appropriate local authorities to carry out the provisions of this subsection. Such a contract may provide for initial estimated payments from the fund prior to the expenditures if the contract also provides for additional payments from the fund if the actual expenditures exceed the initial payments and for repayments back to the fund if the initial payments exceed the actual expenditures. Money distributed from the fund to the state fire marshal or the construction industries division pursuant to this subsection shall be used to supplement, rather than supplant, appropriations to those entities.
K. Pursuant to guidelines established by the council, allocations from the fund may be made to assist school districts in developing and updating five-year facilities plans required by the Public School Capital Outlay Act; provided that:
(1) no allocation shall be made unless the council determines that the school district is willing and able to pay the portion of the total cost of developing or updating the plan that is not funded with the allocation from the fund. Except as provided in Paragraph (2) of this subsection, the portion of the total cost to be paid with the allocation from the fund shall be determined pursuant to the methodology in Paragraph (5) of Subsection B of Section 22-24-5 NMSA 1978; or
(2) the allocation from the fund may be used to pay the total cost of developing or updating the plan if:
(a) the school district has fewer than an average of six hundred full-time-equivalent students on the eightieth and one hundred twentieth days of the prior school year; or
(b) the school district meets all of the following requirements: 1) the school district has fewer than an average of one thousand full-time-equivalent students on the eightieth and one hundred twentieth days of the prior school year; 2) the school district has at least seventy percent of its students eligible for free or reduced-fee lunch; 3) the state share of the total cost, if calculated pursuant to the methodology in Paragraph (5) of Subsection B of Section 22-24-5 NMSA 1978, would be less than fifty percent; and 4) for all educational purposes, the school district 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.
L. Upon application by a school district, allocations from the fund may be made by the council for the purpose of demolishing abandoned school district facilities, provided that:
(1) the costs of continuing to insure an abandoned facility outweigh any potential benefit when and if a new facility is needed by the school district;
(2) there is no practical use for the abandoned facility without the expenditure of substantial renovation costs; and
(3) the council may enter into an agreement with the school district under which an amount equal to the savings to the district in lower insurance premiums are used to reimburse the fund fully or partially for the demolition costs allocated to the district.
M. Up to ten million dollars ($10,000,000) of the fund may be expended each year in fiscal years 2014 through 2019 for an education technology infrastructure deficiency corrections initiative pursuant to Section [4 of this 2014 act] 22-24-4.5 NMSA 1978; provided that funding allocated pursuant to this section shall be expended within three years of its allocation.
N. In each fiscal year from fiscal year 2016 through fiscal year 2020, an expenditure from the fund shall be made for debt service payments on revenue bonds issued by the Gallup-McKinley county school district, in an amount equal to the lesser of three million dollars ($3,000,000) or the amount in debt service payments due for that fiscal year multiplied by the percentage representing the state share of a project for the school district, as established pursuant to Section 22-24-5 NMSA 1978.
O. In each fiscal year from fiscal year 2016 through fiscal year 2020, an expenditure from the fund shall be made for loan payments for the Zuni public school district, in an amount equal to the lesser of one million dollars ($1,000,000) or the amount in loan payments due for that fiscal year multiplied by the percentage representing the state share of a project for the school district, as established pursuant to Section 22-24-5 NMSA 1978."
SECTION 6. Section 22-25-2 NMSA 1978 (being Laws 1975 (S.S.), Chapter 5, Section 2, as amended) is amended to read:
"22-25-2. DEFINITIONS.--As used in the Public School Capital Improvements Act:
A. "program unit" means the product of the program element multiplied by the applicable cost differential factor, as defined in Section 22-8-2 NMSA 1978; [and]
B. "capital improvements" means expenditures, including payments made with respect to lease-purchase arrangements as defined in the Education Technology Equipment Act or the Public School Lease Purchase Act but excluding any other debt service expenses, for:
(1) erecting, remodeling, making additions to, providing equipment for or furnishing public school buildings;
(2) purchasing or improving public school grounds;
(3) maintenance of public school buildings or public school grounds, including the purchasing or repairing of maintenance equipment and participating in the facility information management system as required by the Public School Capital Outlay Act and including payments under contracts with regional education cooperatives for maintenance support services and expenditures for technical training and certification for maintenance and facilities management personnel, but excluding salary expenses of school district employees;
(4) purchasing activity vehicles for transporting students to extracurricular school activities; or
(5) purchasing computer software and hardware for student use in public school classrooms; and
C. "public school building" means a building for a public school, administration building for a public school and any related structure or facility of a public school, including teacher housing in school districts with schools located in sparsely populated, isolated, rural areas, that is owned, acquired or constructed by a school district as necessary to carry out the functions of the school district."
SECTION 7. Section 22-26-2 NMSA 1978 (being Laws 1983, Chapter 163, Section 2, as amended) is amended to read:
"22-26-2. [DEFINITION] DEFINITIONS.--As used in the Public School Buildings Act:
A. "capital improvements" means expenditures, including payments made with respect to lease-purchase arrangements as defined in the Education Technology Equipment Act but excluding any other debt service expenses, for:
[A.] (1) erecting, remodeling, making additions to, providing equipment for or furnishing public school buildings;
[B.] (2) payments made pursuant to a financing agreement entered into by a school district or a charter school for the leasing of a building or other real property with an option to purchase for a price that is reduced according to payments made;
[C.] (3) purchasing or improving public school grounds;
[D.] (4) purchasing activity vehicles for transporting students to and from extracurricular school activities; provided that this authorization for expenditure does not apply to school districts with a student MEM greater than sixty thousand; or
[E.] (5) administering the projects undertaken pursuant to [Subsections A and C of this section] Paragraphs (1) and (3) of this subsection, including expenditures for facility maintenance software, project management software, project oversight and district personnel specifically related to administration of projects funded by the Public School Buildings Act; provided that expenditures pursuant to this subsection shall not exceed five percent of the total project costs; and
B. "public school building" means a building for a public school, an administration building for a public school or any structure or facility of a public school, including teacher housing in school districts with schools located in sparsely populated, isolated, rural areas, that is owned, acquired or constructed by a school district as necessary to carry out the functions of the school district."
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