pg_0001

SFL/SB 146

Page 1

AN ACT

RELATING TO PUBLIC SCHOOL FACILITIES; AMENDING THE PUBLIC

SCHOOL CAPITAL OUTLAY ACT TO PROVIDE INCREMENTAL FUNDING FOR

PROJECTS IN CERTAIN SCHOOL DISTRICTS, TO REDUCE THE OFFSET

FROM A GRANT AWARD FOR CERTAIN APPROPRIATIONS MADE FOR JOINT

USE WITH A GOVERNMENTAL ENTITY, TO CHANGE THE PROCEDURE FOR

MAKING PAYMENTS FOR EXPENDITURES INCURRED TO INSPECT AND

PERMIT PROJECTS, TO PROVIDE AN INCREASED GRANT AWARD TO THOSE

SCHOOL DISTRICTS WITH AN EXEMPLARY RECORD OF PREVENTIVE

MAINTENANCE AND TO CHANGE THE MEMBERSHIP OF THE PUBLIC SCHOOL

CAPITAL OUTLAY OVERSIGHT TASK FORCE; EXTENDING THE

EXPENDITURE PERIOD FOR A CERTAIN APPROPRIATION; MAKING AN

APPROPRIATION.

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

Section 1. 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 Section 22-24-5.8 NMSA

1978 and in Subsections G through L of this section, money in

the fund may be used only for capital expenditures deemed

pg_0002

SFL/SB 146

Page 2

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 and custody to 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

pg_0003

SFL/SB 146

Page 3

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

pg_0004

SFL/SB 146

Page 4

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 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 thirty million dollars ($30,000,000) of

the fund may be allocated annually by the council in fiscal

years 2006 and 2007 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 all

money allocated pursuant to this subsection shall be expended

prior to September 1, 2008.

I. The fund may be expended annually by the

council in fiscal years 2006 through 2020 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

pg_0005

SFL/SB 146

Page 5

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 increase 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; and provided further that

if the total grants awarded pursuant to this paragraph would

exceed the total annual amount available, the rate specified

in this subparagraph shall be reduced proportionately;

(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

pg_0006

SFL/SB 146

Page 6

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) 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:

(a) a grant shall not be made unless

the council determines that the leased facilities meet the

statewide adequacy standards; and

(b) 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;

(5) the total amount expended from the fund

pursuant to this subsection shall not exceed:

(a) seven million five hundred thousand

dollars ($7,500,000) in fiscal year 2007; and

(b) in fiscal year 2008 and each

subsequent fiscal year, the maximum amount for the previous

fiscal year adjusted by the percentage increase between the

pg_0007

SFL/SB 146

Page 7

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; 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

pg_0008

SFL/SB 146

Page 8

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 authority shall 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.

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

pg_0009

SFL/SB 146

Page 9

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.

pg_0010

SFL/SB 146

Page 10

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."

Section 2. Section 22-24-5 NMSA 1978 (being Laws 1975,

Chapter 235, Section 5, as amended) is amended to read:

"22-24-5. PUBLIC SCHOOL CAPITAL OUTLAY PROJECTS--

APPLICATION--GRANT ASSISTANCE.--

A. Applications for grant assistance, approval of

applications, prioritization of projects and grant awards

shall be conducted pursuant to the provisions of this

section.

B. Except as provided in Sections 22-24-4.3,

22-24-5.4, 22-24-5.6 and 22-24-5.8 NMSA 1978, the following

pg_0011

SFL/SB 146

Page 11

provisions govern grant assistance from the fund for a public

school capital outlay project not wholly funded pursuant to

Section 22-24-4.1 NMSA 1978:

(1) all school districts are eligible to

apply for funding from the fund, regardless of percentage of

indebtedness;

(2) priorities for funding shall be

determined by using the statewide adequacy standards

developed pursuant to Subsection C of this section; provided

that:

(a) the council shall apply the

standards to charter schools to the same extent that they are

applied to other public schools; and

(b) in an emergency in which the health

or safety of students or school personnel is at immediate

risk or in which there is a threat of significant property

damage, the council may award grant assistance for a project

using criteria other than the statewide adequacy standards;

(3) the council shall establish criteria to

be used in public school capital outlay projects that receive

grant assistance pursuant to the Public School Capital Outlay

Act. In establishing the criteria, the council shall

consider:

(a) the feasibility of using design,

build and finance arrangements for public school capital

pg_0012

SFL/SB 146

Page 12

outlay projects;

(b) the potential use of more durable

construction materials that may reduce long-term operating

costs;

flexible utilization of space; and

(d) any other financing or construction

concept that may maximize the dollar effect of the state

grant assistance;

(4) no more than ten percent of the combined

total of grants in a funding cycle shall be used for

retrofitting existing facilities for technology

infrastructure;

(5) except as provided in Paragraph (6), (8)

or (9) of this subsection, the state share of a project

approved and ranked by the council shall be funded within

available resources pursuant to the provisions of this

paragraph. No later than May 1 of each calendar year, a

value shall be calculated for each school district in

accordance with the following procedure:

(a) the final prior year net taxable

value for a school district divided by the MEM for that

school district is calculated for each school district;

(b) the final prior year net taxable

value for the whole state divided by the MEM for the state is

pg_0013

SFL/SB 146

Page 13

calculated;

which the result calculated pursuant to Subparagraph (a) of

this paragraph is more than twice the result calculated

pursuant to Subparagraph (b) of this paragraph, the results

calculated pursuant to Subparagraph (a) of this paragraph are

listed from highest to lowest;

(d) the lowest value listed pursuant to

Subparagraph (c) of this paragraph is subtracted from the

highest value listed pursuant to that subparagraph;

(e) the value calculated pursuant to

Subparagraph (a) of this paragraph for the subject school

district is subtracted from the highest value listed in

Subparagraph (c) of this paragraph;

(f) the result calculated pursuant to

Subparagraph (e) of this paragraph is divided by the result

calculated pursuant to Subparagraph (d) of this paragraph;

(g) the sum of the property tax mill

levies for the prior tax year imposed by each school district

on residential property pursuant to Chapter 22, Article 18

NMSA 1978, the Public School Capital Improvements Act, the

Public School Buildings Act, the Education Technology

Equipment Act and Paragraph (2) of Subsection B of Section

7-37-7 NMSA 1978 is calculated for each school district;

(h) the lowest value calculated

pg_0014

SFL/SB 146

Page 14

pursuant to Subparagraph (g) of this paragraph is subtracted

from the highest value calculated pursuant to that

subparagraph;

(i) the lowest value calculated

pursuant to Subparagraph (g) of this paragraph is subtracted

from the value calculated pursuant to that subparagraph for

the subject school district;

(j) the value calculated pursuant to

Subparagraph (i) of this paragraph is divided by the value

calculated pursuant to Subparagraph (h) of this paragraph;

(k) if the value calculated for a

subject school district pursuant to Subparagraph (j) of this

paragraph is less than five-tenths, then, except as provided

in Subparagraph (n) or (o) of this paragraph, the value for

that school district equals the value calculated pursuant to

Subparagraph (f) of this paragraph;

(l) if the value calculated for a

subject school district pursuant to Subparagraph (j) of this

paragraph is five-tenths or greater, then that value is

multiplied by five-hundredths;

(m) if the value calculated for a

subject school district pursuant to Subparagraph (j) of this

paragraph is five-tenths or greater, then the value

calculated pursuant to Subparagraph (l) of this paragraph is

added to the value calculated pursuant to Subparagraph (f) of

pg_0015

SFL/SB 146

Page 15

this paragraph. Except as provided in Subparagraph (n) or

(o) of this paragraph, the sum equals the value for that

school district;

(n) in those instances in which the

calculation pursuant to Subparagraph (k) or (m) of this

paragraph yields a value less than one-tenth, one-tenth shall

be used as the value for the subject school district;

(o) in those instances in which the

calculation pursuant to Subparagraph (k) or (m) of this

paragraph yields a value greater than one, one shall be used

as the value for the subject school district;

(p) except as provided in Section

22-24-5.7 or 22-24-5.8 NMSA 1978 and except as adjusted

pursuant to Paragraph (6), (8) or (9) of this subsection, the

amount to be distributed from the fund for an approved

project shall equal the total project cost multiplied by a

fraction the numerator of which is the value calculated for

the subject school district in the current year plus the

value calculated for that school district in each of the two

preceding years and the denominator of which is three; and

(q) as used in this paragraph:

1) "MEM" means the average full-time-equivalent enrollment of

students attending public school in a school district on the

eightieth and one hundred twentieth days of the prior school

year; 2) "total project cost" means the total amount

pg_0016

SFL/SB 146

Page 16

necessary to complete the public school capital outlay

project less any insurance reimbursement received by the

school district for the project; and 3) in the case of a

state-chartered charter school that has submitted an

application for grant assistance pursuant to this section,

the "value calculated for the subject school district" means

the value calculated for the school district in which the

state-chartered charter school is physically located;

(6) the amount calculated pursuant to

Subparagraph (p) of Paragraph (5) of this subsection shall be

reduced by the following procedure:

(a) the total of all legislative

appropriations made after January 1, 2003 for nonoperating

purposes either directly to the subject school district or to

another governmental entity for the purpose of passing the

money through directly to the subject school district, and

not rejected by the subject school district, is calculated;

provided that: 1) an appropriation made in a fiscal year

shall be deemed to be accepted by a school district unless,

prior to June 1 of that fiscal year, the school district

notifies the department of finance and administration and the

public education department that the district is rejecting

the appropriation; 2) the total shall exclude any educational

technology appropriation made prior to January 1, 2005 unless

the appropriation was on or after January 1, 2003 and not

pg_0017

SFL/SB 146

Page 17

previously used to offset distributions pursuant to the

Technology for Education Act; 3) the total shall exclude any

appropriation previously made to the subject school district

that is reauthorized for expenditure by another recipient; 4)

the total shall exclude one-half of the amount of any

appropriation made or reauthorized after January 1, 2007 if

the purpose of the appropriation or reauthorization is to

fund, in whole or in part, a capital outlay project that,

when prioritized by the council pursuant to this section

either in the immediately preceding funding cycle or in the

current funding cycle, ranked in the top one hundred fifty

projects statewide; 5) the total shall exclude the

proportionate share of any appropriation made or reauthorized

after January 1, 2008 for a capital project that will be

jointly used by a governmental entity other than the subject

school district. Pursuant to criteria adopted by rule of the

council and based upon the proposed use of the capital

project, the council shall determine the proportionate share

to be used by the governmental entity and excluded from the

total; and 6) unless the grant award is made to the

state-chartered charter school or unless the appropriation

was previously used to calculate a reduction pursuant to this

paragraph, the total shall exclude appropriations made after

January 1, 2007 for nonoperating purposes of a specific

state-chartered charter school, regardless of whether the

pg_0018

SFL/SB 146

Page 18

charter school is a state-chartered charter school at the

time of the appropriation or later opts to become a

state-chartered charter school;

(b) the applicable fraction used for

the subject school district and the current calendar year for

the calculation in Subparagraph (p) of Paragraph (5) of this

subsection is subtracted from one;

Subparagraph (a) of this paragraph for the subject school

district is multiplied by the amount calculated pursuant to

Subparagraph (b) of this paragraph for that school district;

(d) the total amount of reductions for

the subject school district previously made pursuant to

Subparagraph (e) of this paragraph for other approved public

school capital outlay projects is subtracted from the amount

calculated pursuant to Subparagraph (c) of this paragraph;

and

(e) the amount calculated pursuant to

Subparagraph (p) of Paragraph (5) of this subsection shall be

reduced by the amount calculated pursuant to Subparagraph (d)

of this paragraph;

(7) as used in this subsection:

(a) "governmental entity" includes an

Indian nation, tribe or pueblo; and

(b) "subject school district" means the

pg_0019

SFL/SB 146

Page 19

school district that has submitted the application for

funding and in which the approved public school capital

outlay project will be located;

(8) the amount calculated pursuant to

Subparagraph (p) of Paragraph (5) of this subsection, after

any reduction pursuant to Paragraph (6) of this subsection,

may be increased by an additional five percent if the council

finds that the subject school district has been exemplary in

implementing and maintaining a preventive maintenance

program. The council shall adopt such rules as are necessary

to implement the provisions of this paragraph;

(9) the council may adjust the amount of

local share otherwise required if it determines that a school

district has used all of its local resources. Before making

any adjustment to the local share, the council shall consider

whether:

(a) the school district has

insufficient bonding capacity over the next four years to

provide the local match necessary to complete the project

and, for all educational purposes, has a residential property

tax rate of at least ten dollars ($10.00) 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;

pg_0020

SFL/SB 146

Page 20

(b) the school district: 1) has fewer

than an average of eight hundred full-time-equivalent

students on the eightieth and one hundred twentieth days of

the prior school year; 2) has at least seventy percent of its

students eligible for free or reduced-fee lunch; 3) has a

share of the total project cost, as calculated pursuant to

provisions of this section, that would be greater than fifty

percent; and 4) for all educational purposes, 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; or

enrollment growth rate over the previous school year of at

least two and one-half percent; 2) pursuant to its five-year

facilities plan, will be building a new school within the

next two years; and 3) for all educational purposes, has a

residential property tax rate of at least ten dollars

($10.00) 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; and

pg_0021

SFL/SB 146

Page 21

(10) no application for grant assistance

from the fund shall be approved unless the council determines

that:

(a) the public school capital outlay

project is needed and included in the school district's

five-year facilities plan among its top priorities;

(b) the school district has used its

capital resources in a prudent manner;

insurance for buildings of the school district in accordance

with the provisions of Section 13-5-3 NMSA 1978;

(d) the school district has submitted a

five-year facilities plan that includes: 1) enrollment

projections; 2) a current preventive maintenance plan that

has been approved by the council pursuant to Section

22-24-5.3 NMSA 1978 and that is followed by each public

school in the district; 3) the capital needs of charter

schools located in the school district; and 4) projections

for the facilities needed in order to maintain a full-day

kindergarten program;

(e) the school district is willing and

able to pay any portion of the total cost of the public

school capital outlay project that, according to Paragraph

(5), (6), (8) or (9) of this subsection, is not funded with

grant assistance from the fund; provided that school district

pg_0022

SFL/SB 146

Page 22

funds used for a project that was initiated after September

1, 2002 when the statewide adequacy standards were adopted,

but before September 1, 2004 when the standards were first

used as the basis for determining the state and school

district share of a project, may be applied to the school

district portion required for that project;

(f) the application includes the

capital needs of any charter school located in the school

district or the school district has shown that the facilities

of the charter school have a smaller deviation from the

statewide adequacy standards than other district facilities

included in the application; and

(g) the school district has agreed, in

writing, to comply with any reporting requirements or

conditions imposed by the council pursuant to Section

22-24-5.1 NMSA 1978.

C. After consulting with the public school capital

outlay oversight task force and other experts, the council

shall regularly review and update statewide adequacy

standards applicable to all school districts. The standards

shall establish the acceptable level for the physical

condition and capacity of buildings, the educational

suitability of facilities and the need for technological

infrastructure. Except as otherwise provided in the Public

School Capital Outlay Act, the amount of outstanding

pg_0023

SFL/SB 146

Page 23

deviation from the standards shall be used by the council in

evaluating and prioritizing public school capital outlay

projects.

D. The acquisition of a facility by a school

district or charter school pursuant to a financing agreement

that provides for lease payments with an option to purchase

for a price that is reduced according to lease payments made

may be considered a public school capital outlay project and

eligible for grant assistance under this section pursuant to

the following criteria:

(1) no grant shall be awarded unless the

council finds that, prior to the purchase of the facility by

the school district or charter school, the facility will

equal or exceed the statewide adequacy standards and the

building standards for public school facilities;

(2) no grant shall be awarded unless the

school district and the need for the facility meet all of the

requirements for grant assistance pursuant to the Public

School Capital Outlay Act;

(3) the total project cost shall equal the

total payments that would be due under the agreement if the

school district or charter school would eventually acquire

title to the facility;

(4) the portion of the total project cost to

be paid from the fund may be awarded as one grant, but

pg_0024

SFL/SB 146

Page 24

disbursements from the fund shall be made from time to time

as lease payments become due;

(5) the portion of the total project cost to

be paid by the school district or charter school may be paid

from time to time as lease payments become due; and

(6) neither a grant award 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

facility.

E. In order to encourage private capital

investment in the construction of public school facilities,

the purchase of a privately owned school facility that is, at

the time of application, in use by a school district may be

considered a public school capital outlay project and

eligible for grant assistance pursuant to this section if the

council finds that:

(1) at the time of the initial use by the

school district, the facility to be purchased equaled or

exceeded the statewide adequacy standards and the building

standards for public school facilities;

(2) at the time of application, attendance

at the facility to be purchased is at seventy-five percent or

greater of design capacity and the attendance at other

schools in the school district that the students at the

pg_0025

SFL/SB 146

Page 25

facility would otherwise attend is at eighty-five percent or

greater of design capacity; and

(3) the school district and the capital

outlay project meet all of the requirements for grant

assistance pursuant to the Public School Capital Outlay Act;

provided that, when determining the deviation from the

statewide adequacy standards for the purposes of evaluating

and prioritizing the project, the students using the facility

shall be deemed to be attending other schools in the school

district.

F. It is the intent of the legislature that grant

assistance made pursuant to this section allows every school

district to meet the standards developed pursuant to

Subsection C of this section; provided, however, that nothing

in the Public School Capital Outlay Act or the development of

standards pursuant to that act prohibits a school district

from using local funds to exceed the statewide adequacy

standards.

G. Upon request, the council shall work with, and

provide assistance and information to, the public school

capital outlay oversight task force.

H. The council may establish committees or task

forces, not necessarily consisting of council members, and

may use the committees or task forces, as well as existing

agencies or organizations, to conduct studies, conduct

pg_0026

SFL/SB 146

Page 26

surveys, submit recommendations or otherwise contribute

expertise from the public schools, programs, interest groups

and segments of society most concerned with a particular

aspect of the council's work.

I. Upon the recommendation of the public school

facilities authority, the council shall develop building

standards for public school facilities and shall promulgate

other such rules as are necessary to carry out the provisions

of the Public School Capital Outlay Act.

J. No later than December 15 of each year, the

council shall prepare a report summarizing its activities

during the previous fiscal year. The report shall describe

in detail all projects funded, the progress of projects

previously funded but not completed, the criteria used to

prioritize and fund projects and all other council actions.

The report shall be submitted to the public education

commission, the governor, the legislative finance committee,

the legislative education study committee and the

legislature."

Section 3. Section 22-24-5.4 NMSA 1978 (being Laws

2004, Chapter 125, Section 10) is amended to read:

"22-24-5.4. RECALCITRANT SCHOOL DISTRICTS--COURT ACTION

TO ENFORCE CONSTITUTIONAL COMPLIANCE--IMPOSITION OF PROPERTY

TAX.--

A. The council may bring an action against a

pg_0027

SFL/SB 146

Page 27

school district pursuant to the provisions of this section

if, based upon information submitted to the council by the

public school facilities authority, the council determines

that:

(1) the physical condition of a public

school facility in the school district is so inadequate that

the facility or the education received by students attending

the facility is below the minimum required by the

constitution of New Mexico;

(2) the school district is not taking the

necessary steps to bring the facility up to the

constitutionally required minimum; and

(3) either:

(a) the school district has not applied

for the grant assistance necessary to bring the facility up

to minimum constitutional standards; or

(b) the school district is unwilling to

meet all of the requirements for the approval of an

application for grant assistance pursuant to Paragraph (10)

of Subsection B of Section 22-24-5 NMSA 1978.

B. An action brought pursuant to this section

shall be brought by the council in the name of the state

against the school district in the district court for Santa

Fe county.

C. After a hearing and consideration of the

pg_0028

SFL/SB 146

Page 28

evidence, if the court finds that the council's determination

pursuant to Subsection A of this section was correct, the

court shall:

(1) order the council to expend sufficient

resources necessary to bring the facility up to the minimum

level required by the constitution of New Mexico;

(2) order the school district to comply with

Paragraph (10) of Subsection B of Section 22-24-5 NMSA 1978

and to take all other actions necessary to facilitate the

completion of the project ordered pursuant to Paragraph (1)

of this subsection; and

(3) enter a judgment against the school

district for court costs and attorney fees and the necessary

amount to satisfy the school district share, as determined by

the formula prescribed by Subsection B of Section 22-24-5

NMSA 1978, for the project ordered pursuant to Paragraph (1)

of this subsection.

D. The amount of a judgment entered against a

school district pursuant to Paragraph (3) of Subsection C of

this section is a public debt of the school district. If the

court finds that the debt cannot be satisfied with available

school district funds, other than funds needed for the

operation of the public schools and other existing

obligations, the court shall order the imposition of a

property tax on all taxable property allocated to the school

pg_0029

SFL/SB 146

Page 29

district at a rate sufficient to pay the judgment, with

accrued interest, within a reasonable time as determined by

the court. After paying court costs and attorney fees,

amounts received pursuant to this subsection shall be

deposited by the council into the fund."

Section 4. A new section of the Public School Capital

Outlay Act, Section 22-24-5.8 NMSA 1978, is enacted to read:

"22-24-5.8. INCREMENTAL FUNDING FOR PROJECTS IN CERTAIN

SCHOOL DISTRICTS.--

A. A school district receiving grant assistance

from the fund pursuant to Section 22-24-5 NMSA 1978 for a

public school capital outlay project, other than supplemental

grant assistance for increased costs on a project previously

approved, shall receive additional incremental funding from

the fund if the school district and proposed use of the

additional incremental funding qualify pursuant to the

provisions of Subsection B of this section.

B. A school district shall receive the additional

grant if the council determines that:

(1) the school district has a demonstrated

history of providing support to its schools with all

available resources;

(2) in calculating the grant assistance from

the fund for the project pursuant to Section 22-24-5 NMSA

1978, the value calculated for the school district pursuant

pg_0030

SFL/SB 146

Page 30

to Subparagraph (k), (m), (n) or (o) of Paragraph (5) of

Subsection B of that section is equal to or greater than

seven-tenths;

(3) averaged over the previous four property

tax years, the school district had a residential property tax

rate of at least nine dollars ($9.00) 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;

(4) at least seventy percent of the students

in the school district are eligible for free or reduced-fee

lunch;

(5) the school district does not have

sufficient resources to expend on the project so it is

unlikely that the school district will be able to provide its

students with more than the bare minimum;

(6) the political subdivision in which the

school district is located does not have adequate

infrastructure to compensate for the school district's lack

of resources; and

(7) the planned use of the additional grant

will enhance public school education in the school district,

will further the school district's educational plan for

student success and is a prudent use of state money.

pg_0031

SFL/SB 146

Page 31

C. The amount of additional incremental funding

awarded pursuant to this section shall equal the total

project cost multiplied by the lesser of:

(1) the value calculated for the school

district pursuant to Subparagraph (k), (m), (n) or (o) of

Paragraph (5) of Subsection B of Section 22-24-5 NMSA 1978

minus six-tenths; or

(2) twenty-five hundredths.

D. All provisions of the Public School Capital

Outlay Act relating to the expenditure of other grants

awarded from the fund, including those provisions relating to

reporting, oversight, project access and accountability,

apply to the use and expenditure of additional funding made

pursuant to this section."

Section 5. Section 22-24-7 NMSA 1978 (being Laws 2001,

Chapter 338, Section 12, as amended) is amended to read:

"22-24-7. PUBLIC SCHOOL CAPITAL OUTLAY OVERSIGHT TASK

FORCE--CREATION--STAFF.--

A. The "public school capital outlay oversight

task force" is created. The task force consists of

twenty-five members as follows:

(1) the secretary of finance and

administration or the secretary's designee;

(2) the secretary of public education or the

secretary's designee;

pg_0032

SFL/SB 146

Page 32

(3) the speaker of the house of

representatives or the speaker's designee;

(4) the president pro tempore of the senate

or the president pro tempore's designee;

(5) the chairs of the house appropriations

and finance committee, the senate finance committee, the

senate education committee and the house education committee

or their designees;

(6) two minority party members of the house

of representatives, appointed by the New Mexico legislative

council;

(7) two minority party members of the

senate, appointed by the New Mexico legislative council;

(8) a member of the interim legislative

committee charged with the oversight of Indian affairs,

appointed by the New Mexico legislative council, provided

that the member shall rotate annually between a senate member

and a member of the house of representatives;

(9) a member of the house of representatives

and a member of the senate who represent districts with

school districts receiving federal funds commonly known as

"PL 874" funds or "impact aid", appointed by the New Mexico

legislative council;

(10) two public members who have expertise

in education and finance appointed by the speaker of the

pg_0033

SFL/SB 146

Page 33

house of representatives;

(11) two public members who have expertise

in education and finance appointed by the president pro

tempore of the senate;

(12) three public members, two of whom are

residents of school districts that receive grants from the

federal government as assistance to areas affected by federal

activity authorized in accordance with Title 20 of the

United States Code, appointed by the governor; and

(13) three superintendents of school

districts or their designees, two of whom are from school

districts that receive grants from the federal government as

assistance to areas affected by federal activity authorized

in accordance with Title 20 of the United States Code,

appointed by the New Mexico legislative council in

consultation with the governor.

B. The chair of the public school capital outlay

oversight task force shall be elected by the task force. The

task force shall meet at the call of the chair, but no more

than four times per calendar year.

C. Non-ex-officio members of the task force shall

serve at the pleasure of their appointing authorities.

D. The public members of the public school capital

outlay oversight task force shall receive per diem and

mileage pursuant to the Per Diem and Mileage Act.

pg_0034

SFL/SB 146

Page 34

E. The legislative council service, with

assistance from the public school facilities authority, the

department of finance and administration, the public

education department, the legislative education study

committee and the legislative finance committee, shall

provide staff for the public school capital outlay oversight

task force."

Section 6. Laws 2006, Chapter 95, Section 14 is amended

to read:

"Section 14. APPROPRIATIONS.--

A. Two million five hundred thousand dollars

($2,500,000) is appropriated from the public school capital

outlay fund to the public school facilities authority for

expenditure in fiscal years 2006 through 2009 for continuing

the development and implementation of a uniform web-based

facility information management system for the public schools

pursuant to the provisions of Section 22-24-5.3 NMSA 1978.

Any unexpended or unencumbered balance remaining at the end

of fiscal year 2009 shall revert to the public school capital

outlay fund.

B. Three hundred thousand dollars ($300,000) is

appropriated from the public school capital outlay fund to

the public school facilities authority for expenditure in

fiscal years 2007 and 2008 for the purpose of improving the

indoor air quality of public schools by implementing the

pg_0035

SFL/SB 146

Page 35

New Mexico indoor air quality tools for schools program

pursuant to criteria developed by the public school

facilities authority in consultation with the department of

environment, the public education department, the department

of health, the energy, minerals and natural resources

department and the children, youth and families department.

Any unexpended or unencumbered balance remaining at the end

of fiscal year 2008 shall revert to the public school capital

outlay fund."

Section 7. APPROPRIATION--NEW SCHOOL DEVELOPMENT

FUND.--

Three million dollars ($3,000,000) is appropriated from

the public school capital outlay fund to the new school

development fund for expenditure in fiscal year 2009 and

subsequent fiscal years for the purpose of making

distributions to school districts to pay for equipment and

other nonoperating costs unique to the first year of operation

of new schools. Any unexpended or unencumbered balance

remaining at the end of a fiscal year shall not revert.