SENATE BILL 454
53rd legislature - STATE OF NEW MEXICO - first session, 2017
INTRODUCED BY
Mimi Stewart
AN ACT
RELATING TO PUBLIC SCHOOLS; PROVIDING FOR A LOCAL OPTION PROPERTY TAX FOR SCHOOL DISTRICT OPERATIONAL PURPOSES; CREATING A FUND; PROVIDING FOR DISTRIBUTION; AMENDING AND ENACTING SECTIONS OF THE NMSA 1978; MAKING AN APPROPRIATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 7 of this act may be cited as the "Local Operational School Levy Act".
SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Local Operational School Levy Act:
A. "department" means the public education department;
B. "first reporting date program costs" means program costs, as defined in the Public School Finance Act, for any school district as calculated using membership, as defined in the Public School Finance Act, on the first reporting date of the applicable school year in that school district;
C. "local school board" means the governing body of a school district;
D. "operational purposes" means those expenditure categories for the general operation of a school district that are defined in department rules for uniform financial accounting and budgeting for school districts;
E. "secretary" means the secretary of public education; and
F. "taxable value of property" means the sum of the following:
(1) the "net taxable value", as that term is defined in the Property Tax Code, of property subject to taxation under the Property Tax Code;
(2) the "assessed value" of "products" as those terms are defined in the Oil and Gas Ad Valorem Production Tax Act;
(3) the "assessed value" of "equipment" as those terms are defined in the Oil and Gas Production Equipment Ad Valorem Tax Act; and
(4) the "taxable value" of "copper mineral property" as those terms are defined in the Copper Production Ad Valorem Tax Act.
SECTION 3. [NEW MATERIAL] LOCAL SCHOOL BOARD--AUTHORIZATION TO IMPOSE A TAX FOR SCHOOL DISTRICT OPERATIONAL PURPOSES--RESOLUTION--ELECTION REQUIRED.--
A. A local school board may adopt a resolution authorizing, for school district operational purposes, the imposition of a property tax upon the taxable value of property in the school district. The total tax imposition that may be authorized under the Local Operational School Levy Act shall not exceed a rate of four dollars ($4.00) on each one thousand dollars ($1,000) of taxable value of property in the school district.
B. The tax authorized pursuant to Subsection A of this section shall not be imposed unless the question of authorizing the imposition of the tax is submitted to the voters of the district. The local school board shall not submit to the voters at any one election a question authorizing the imposition of a tax under the Local Operational School Levy Act at a rate greater than two dollars ($2.00) on each one thousand dollars ($1,000) of taxable value of property in the school district or for a period of more than ten years.
C. During the three years prior to the expiration of any period during which a tax has been authorized to be imposed pursuant to the Local Operational School Levy Act, the local school board may adopt a resolution under Subsection A of this section and submit to the voters of the school district the question of authorizing the imposition of a tax under that act for an additional period not to exceed ten years with the tax to be certified and first imposed for the period immediately succeeding the last year of the period the tax was previously authorized to be imposed.
D. Any resolution adopted pursuant to Subsection A of this section shall specify:
(1) the rate of the proposed tax;
(2) the date on which a referendum will be held to submit the question of imposition of the tax to the voters of the school district;
(3) the period of time for which the tax is authorized to be imposed; and
(4) the proposed use of the revenues from the proposed tax.
E. The local school board shall mail a copy of the resolution authorizing a tax pursuant to Subsection A of this section to the secretary within two weeks following its adoption by the local school board.
F. Any amounts received by the school district under the provisions of the Local Operational School Levy Act shall be expended only for operational purposes of the school district.
SECTION 4. [NEW MATERIAL] CONDUCT OF ELECTION--BALLOT.--
A. The question of authorizing the imposition of a tax under the Local Operational School Levy Act shall be submitted to the voters at the first regular school district election following the adoption of a resolution pursuant to Section 3 of the Local Operational School Levy Act. However, if a local school board deems it necessary, it may call a special school district election to submit to the voters the initial question of the authorization of a tax under the Local Operational School Levy Act. Thereafter, the question of authorizing the imposition of any additional tax under the Local Operational School Levy Act shall be submitted to the voters only at regular school district elections.
B. The proclamation calling the election shall be filed and published as required under the School Election Law and shall specify:
(1) the date on which the election will be held;
(2) the question of whether the imposition of a property tax for school district operational purposes shall be authorized pursuant to the Local Operational School Levy Act at a rate not to exceed the rate specified in the authorizing resolution and for the period specified in that resolution;
(3) the precincts in each county in which the election is to be held and the location of each polling place;
(4) the hours that each polling place will be open; and
(5) the date and time of the closing of the registration books by the county clerk as required by law.
C. The ballot shall include the information specified in Paragraph (2) of Subsection B of this section and shall present the voter the choice of voting "for the local operational school levy" or "against the local operational school levy".
D. The election shall be held, conducted and canvassed pursuant to the School Election Law.
E. The local school board shall notify the secretary of the results of the election immediately upon completion of the canvass.
F. Any resolution authorizing a tax pursuant to the Local Operational School Levy Act shall be adopted by a date necessary to ensure that the results of the election on the question of imposing the tax shall be certified no later than June 15 of the property tax year for which the tax rates will first be certified.
SECTION 5. [NEW MATERIAL] IMPOSITION OF TAX--CERTIFICATION BY THE DEPARTMENT OF FINANCE AND ADMINISTRATION--DISCONTINUANCE OF TAX.--
A. If a majority of the voters voting on the question votes for a local operational school levy pursuant to a resolution adopted under the Local Operational School Levy Act, the tax shall be imposed for the earliest period for which the tax rate may be certified, except as otherwise provided in that act. The tax rate shall be certified by the department of finance and administration and shall be imposed, administered and collected in accordance with the provisions of the Oil and Gas Ad Valorem Production Tax Act, the Oil and Gas Production Equipment Ad Valorem Tax Act, the Copper Production Ad Valorem Tax Act and the Property Tax Code.
B. If a majority of the voters voting on the question votes against a local operational school levy, the tax shall not be imposed. The local school board shall not again adopt a resolution authorizing the imposition of a tax under the Local Operational School Levy Act for at least two years after the date of the resolution that the voters rejected.
C. The department of finance and administration shall not certify the tax rates for taxes authorized pursuant to the Local Operational School Levy Act in any year in which the secretary certifies by July 1 of that year that money in the local operational school fund for the next school year is not sufficient to meet the demands on the fund. The tax rates authorized but not certified shall be certified in the first succeeding year for which the necessary appropriation to the local operational school fund for the next school year has been made.
D. The department of finance and administration shall not certify the tax rate for a tax authorized pursuant to the Local Operational School Levy Act for any school district in the state in any year in which the public education department notifies the department of finance and administration by August 1 that the imposition of the taxes or the use of revenues from the taxes would result in:
(1) the failure to qualify for certification by the secretary of the United States department of education as having in effect for the tax year in which the tax would otherwise be imposed, administered and collected a program of state aid that equalizes expenditures for free public education among local educational agencies in the state; or
(2) when computed according to 20 U.S.C. 7709(d)(1), a proportion of less than eighty percent in any school district.
E. The local school board may discontinue by resolution the imposition of any tax authorized pursuant to the Local Operational School Levy Act. The discontinuance resolution shall be mailed to the department of finance and administration and the secretary no later than June 15 of the year in which a tax rate pursuant to that act is not to be certified.
SECTION 6. [NEW MATERIAL] LOCAL OPERATIONAL SCHOOL FUND CREATED--APPROPRIATION.--There is created in the state treasury the "local operational school fund". The fund shall be invested as other state funds are invested. Earnings on balances in the local operational school fund shall be credited to the fund, and amounts in the fund are appropriated for the purposes of the Local Operational School Levy Act.
SECTION 7. [NEW MATERIAL] STATE GUARANTEE--STATE DISTRIBUTION--REMITTANCE OF EXCESS AMOUNTS.--
A. The state guarantee for a school district that has imposed a tax pursuant to the Local Operational School Levy Act shall be an amount equal to the product obtained by multiplying two and one-half percent by the tax rate certified pursuant to that act and multiplying that product by the first reporting date program cost for the school year beginning in any year a tax rate under that act is certified for that school district.
B. The state distribution for a school district for a school year is an amount that shall not exceed the state guarantee for that school district and that is equal to the amount by which the state guarantee exceeds the revenue from the tax imposed in that school district pursuant to the Local Operational School Levy Act received during the period beginning June 1 of the year during which a tax rate under that act is certified for the school district and ending May 31 of the next year. If a school district is entitled to a state distribution, the secretary shall distribute the calculated amount from the local operational school fund to the school district not later than June 30 of the calendar year following the year during which the tax rate was certified.
C. If the revenue received during the period June 1 to May 31 from the imposition of the tax authorized by the Local Operational School Levy Act exceeds the state guarantee for the school year during which the revenue was received, the local school board shall remit to the local operational school fund by June 30 of the school year an amount equal to the sum of the amounts derived from the following three calculations:
(1) one-fourth of the amount of revenue that exceeds one hundred twenty-five percent of the state guarantee but is less than one hundred fifty percent of the state guarantee;
(2) one-half of the amount of revenue that is one hundred fifty percent or more of the state guarantee but less than one hundred seventy-five percent of the state guarantee; and
(3) three-fourths of the amount of revenue that is one hundred seventy-five percent or more of the state guarantee.
D. If the balance in the local operational school fund in any fiscal year is insufficient to pay the sum of the distribution amounts determined to be due to all the school districts entitled to a distribution, the amount necessary to pay all distribution amounts in full shall be transferred from the state-support reserve fund to the local operational school fund for distribution to school districts as required pursuant to this section. However, if there is not a sufficient balance in the state-support reserve fund to pay both the full state equalization guarantee distribution and the state distributions under this section, the state equalization guarantee distribution shall be made in full and, based on the amount available in the local operational school fund, each state distribution amount due pursuant to this section shall be reduced proportionately.
E. Distributions to school districts made pursuant to the Local Operational School Levy Act shall be supplemental to state equalization guarantee distributions made pursuant to the Public School Finance Act. In no fiscal year shall the amount of state funding pursuant to the Public School Finance Act be reduced because of the imposition in one or more school districts of a tax under the Local Operational School Levy Act. The absence of a distribution to a school district under the Local Operational School Levy Act shall not affect the amount of any state equalization guarantee distributions to that school district pursuant to the Public School Finance Act.
SECTION 8. Section 22-8-25 NMSA 1978 (being Laws 1981, Chapter 176, Section 5, as amended) is amended to read:
"22-8-25. STATE EQUALIZATION GUARANTEE DISTRIBUTION--
DEFINITIONS--DETERMINATION OF AMOUNT.--
A. The state equalization guarantee distribution is that amount of money distributed to each school district to ensure that its operating revenue, including its local and federal revenues as defined in this section, is at least equal to the school district's program cost. For state-chartered charter schools, the state equalization guarantee distribution is the difference between the state-chartered charter school's program cost and the two percent withheld by the department for administrative services.
B. "Local revenue", as used in this section, means seventy-five percent of receipts to the school district derived from that amount produced by a school district property tax applied at the rate of fifty cents ($.50) to each one thousand dollars ($1,000) of net taxable value of property allocated to the school district and to the assessed value of products severed and sold in the school district as determined under the Oil and Gas Ad Valorem Production Tax Act and upon the assessed value of equipment in the school district as determined under the Oil and Gas Production Equipment Ad Valorem Tax Act.
C. "Federal revenue", as used in this section, excludes amounts that, if taken into consideration in the computation of the state equalization guarantee distribution, will result, pursuant to federal law or regulations, in the reduction or elimination of federal school funding otherwise receivable by the school district and means:
(1) receipts to the school district [excluding amounts that, if taken into account in the computation of the state equalization guarantee distribution, result, under federal law or regulations, in a reduction in or elimination of federal school funding otherwise receivable by the school district] derived from the following:
[(1)] (a) seventy-five percent of the school district's share of forest reserve funds distributed in accordance with Section 22-8-33 NMSA 1978; and
[(2)] (b) seventy-five percent of grants from the federal government as assistance to those areas affected by federal activity authorized in accordance with Title 20 of the United States Code, commonly known as "PL 874 funds" or "impact aid"; or
(2) with respect to a school district that received PL 874 funds and for which a proportion of less than seventy-five percent is calculated for the purpose of taking PL 874 funds into consideration in determining the state equalization guarantee distribution, that lesser proportion of receipts to the school district derived from grants from the federal government as assistance to those areas affected by federal activity authorized in accordance with Title 20 of the United States Code.
D. To determine the amount of the state equalization guarantee distribution, the department shall:
(1) calculate the number of program units to which each school district or charter school is entitled using an average of the MEM on the second and third reporting dates of the prior year; or
(2) calculate the number of program units to which a school district or charter school operating under an approved year-round school calendar is entitled using an average of the MEM on appropriate dates established by the department; or
(3) calculate the number of program units to which a school district or charter school with a MEM of two hundred or less is entitled by using an average of the MEM on the second and third reporting dates of the prior year or the fortieth day of the current year, whichever is greater; and
(4) using the results of the calculations in Paragraph (1), (2) or (3) of this subsection and the instructional staff training and experience index from the October report of the prior school year, establish a total program cost of the school district or charter school;
(5) for school districts, calculate the local and federal revenues as defined in this section;
(6) deduct the sum of the calculations made in Paragraph (5) of this subsection from the program cost established in Paragraph (4) of this subsection;
(7) deduct the total amount of guaranteed energy savings contract payments that the department determines will be made to the school district from the public school utility conservation fund during the fiscal year for which the state equalization guarantee distribution is being computed; and
(8) deduct ninety percent of the amount certified for the school district by the department pursuant to the Energy Efficiency and Renewable Energy Bonding Act.
E. Reduction of a school district's state equalization guarantee distribution shall cease when the school district's cumulative reductions equal its proportional share of the cumulative debt service payments necessary to service the bonds issued pursuant to the Energy Efficiency and Renewable Energy Bonding Act.
F. The amount of the state equalization guarantee distribution to which a school district is entitled is the balance remaining after the deductions made in Paragraphs (6) through (8) of Subsection D of this section.
G. The state equalization guarantee distribution shall be distributed prior to June 30 of each fiscal year. The calculation shall be based on the local and federal revenues specified in this section received from June 1 of the previous fiscal year through May 31 of the fiscal year for which the state equalization guarantee distribution is being computed. In the event that a school district or charter school has received more state equalization guarantee funds than its entitlement, a refund shall be made by the school district or charter school to the state general fund."
SECTION 9. Section 22-8-31 NMSA 1978 (being Laws 1967, Chapter 16, Section 84, as amended) is amended to read:
"22-8-31. STATE-SUPPORT RESERVE FUND.--
A. The "state-support reserve fund" is created.
B. The state-support reserve fund shall be used only to augment the appropriations for the state equalization guarantee distribution and the distribution pursuant to the Local Operational School Levy Act in order to [insure] ensure, to the extent of the amount undistributed in the fund, that the maximum figures for such [distribution] distributions established by law shall not be reduced.
C. The undistributed money in the state-support reserve fund shall be invested by the state treasurer in interest-bearing securities of the United States government or in certificates of deposit in qualified banks and in savings and [loans] loan associations whose deposits are insured with an agency of the United States. The state treasurer may deposit money from the state-support reserve fund or any other fund in one or more accounts with any such bank or federally insured savings and loan association, but the state treasurer, in any official capacity, shall not deposit money from [said] that fund or any other fund in any one [such] federally insured savings and loan association the aggregate of which would exceed the amount of federal savings and loan insurance corporation insurance for a single public account. Income from these investments shall be periodically credited to the general fund.
D. At least forty-five days before the money is needed, the [chief] secretary shall notify the state treasurer in writing of the amount that will be needed for the state equalization guarantee distribution. At least twenty-five days before the money is needed, the secretary shall notify the state treasurer in writing of the amount that will be needed for transfer to the local operational school fund for distribution pursuant to the Local Operational School Levy Act. The state treasurer shall transfer to the local operational school fund the amount requested or the remaining unencumbered balance in the state-support reserve fund after the state equalization guarantee distribution amount has been subtracted, whichever is less.
E. In the event that local or federal revenues as defined in Section [77-6-19 NMSA 1953] 22-8-25 NMSA 1978 are received after May 31 of the fiscal year for which the state equalization guarantee distribution is being computed and it is therefore necessary to use money from the state-support reserve fund to augment the appropriation for the state equalization guarantee distribution, the [chief] secretary, upon receipt by the school district of the delayed local or federal revenues, shall deduct the appropriate amount from the current state equalization guarantee distribution to that school district and reimburse the state-support reserve fund in the amount of the deduction.
F. It is the intent of the legislature that the state-support reserve fund be reimbursed in the amount of the yearly distribution by appropriation in the year following the distribution so that the fund at the beginning of each fiscal year shall have a credit balance of at least ten million dollars ($10,000,000).
G. Distribution from [this] the state-support reserve fund shall be made in the same manner and on the same basis as the state equalization guarantee distribution."
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