SENATE BILL 114

53rd legislature - STATE OF NEW MEXICO - first session, 2017

INTRODUCED BY

Steven P. Neville and John Arthur Smith

FOR THE LEGISLATIVE FINANCE COMMITTEE

AN ACT

RELATING TO PUBLIC SCHOOL FINANCE; LIMITING SCHOOL DISTRICTS' AND CHARTER SCHOOLS' FISCAL YEAR 2016 CASH BALANCES BY TAKING CREDITS AGAINST THEIR FISCAL YEAR 2017 STATE EQUALIZATION GUARANTEE DISTRIBUTIONS; MAKING AN APPROPRIATION; DECLARING AN EMERGENCY.

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

     SECTION 1. Section 22-8-41 NMSA 1978 (being Laws 1967, Chapter 16, Section 99, as amended) is amended to read:

     "22-8-41. RESTRICTION ON OPERATIONAL FUNDS--EMERGENCY ACCOUNTS--CASH BALANCES.--

          A. A school district shall not expend money from its operational fund for the acquisition of a building site or for the construction of a new structure, unless the school district has bonded itself to practical capacity or the secretary determines and certifies to the legislative finance committee that the expending of money from the operational fund for this purpose is necessary for an adequate public educational program and will not unduly hamper the school district's current operations.

          B. A school district or charter school may budget out of cash balances carried forward from the previous fiscal year an amount not to exceed five percent of its proposed operational fund expenditures for the ensuing fiscal year as an emergency account. Money in the emergency account shall be used only for unforeseen expenditures incurred after the annual budget was approved and shall not be expended without the prior written approval of the secretary.

          C. In addition to the emergency account, school districts or charter schools may also budget operational fund cash balances carried forward from the previous fiscal year for operational expenditures, exclusive of salaries and payroll, upon specific prior approval of the secretary. The secretary shall notify the legislative finance committee in writing of the secretary's approval of such proposed expenditures. [For fiscal years 2004 and 2005, with the approval of the secretary, a school district or charter school may budget so much of its operational cash balance as is needed for nonrecurring expenditures, including capital outlay.]

          D. Notwithstanding any provision of this section to the contrary, the secretary shall reduce school districts' and charter schools' fiscal year 2017 state equalization guarantee distributions in the amount of fifty million dollars ($50,000,000) as credit for excess fiscal year 2016 operational fund cash balances in accordance with Section 2 of this 2017 act."

     SECTION 2. DISTRIBUTION REDUCTIONS--FISCAL YEAR 2017.--The secretary of public education shall:

          A. apply as a credit toward the fiscal year 2017 state equalization guarantee distribution of each school district and charter school an amount equal to the following:

                (1) fifty million dollars ($50,000,000) divided by the fiscal year 2016 program costs for all school districts and charter schools; and

                (2) that quotient multiplied by the school district's or charter school's fiscal year 2016 program cost;

          B. promptly after the effective date of this 2017 act, notify each school district and charter school of the amount of its credit; and

          C. for each school district and charter school, reduce by the amount of its credit the school district's or charter school's state equalization guarantee distributions evenly over the period remaining in fiscal year 2017.

     SECTION 3. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.