SENATE BILL 332

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

INTRODUCED BY

Craig W. Brandt

AN ACT

RELATING TO PUBLIC FINANCE; CHANGING PURPOSES AND AUTHORIZATIONS FOR THE EXPENDITURE OF SUPPLEMENTAL SEVERANCE TAX BOND PROCEEDS; AUTHORIZING THE ISSUANCE OF SEVERANCE TAX BONDS AND SUPPLEMENTAL SEVERANCE TAX BONDS; SUSPENDING PAYMENTS OF REFUNDABLE FILM PRODUCTION TAX CREDITS AND FILM AND TELEVISION TAX CREDITS; REPEALING LAWS 2017, CHAPTER 3, SECTION 2 PERTAINING TO THE REDUCTION OF SCHOOLS' CASH BALANCES; MAKING APPROPRIATIONS; DECLARING AN EMERGENCY.

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

     SECTION 1. SHORT-TERM SUPPLEMENTAL SEVERANCE TAX BONDS--APPROPRIATION OF PROCEEDS.--In fiscal year 2017, the state board of finance may, in compliance with the Severance Tax Bonding Act, issue and sell supplemental severance tax bonds whose terms end on or before the end of the fiscal year in an aggregate amount not to exceed twenty-six million one hundred thousand dollars ($26,100,000) when the secretary of finance and administration certifies the need for the bonds. The state board of finance shall issue and sell the bonds as expeditiously and economically as possible and take the appropriate steps necessary to comply with the federal Internal Revenue Code of 1986, as amended. Proceeds from the sale of the bonds are appropriated to the general fund. The board of finance division of the department of finance and administration shall transfer the proceeds to the general fund for use by the department in fiscal year 2017 to restore the allotments from the general fund for capital project appropriations whose expenditure periods end on or before June 30, 2016.

     SECTION 2. SEVERANCE TAX BONDS--APPROPRIATION OF PROCEEDS.--In fiscal year 2017, the state board of finance may, in compliance with the Severance Tax Bonding Act, issue and sell severance tax bonds in the amount of twenty-six million one hundred thousand dollars ($26,100,000). Upon certification by the public school capital outlay council that the need exists for the issuance of the bonds, the state board of finance shall issue and sell the bonds as expeditiously and economically as possible and take the appropriate steps necessary to comply with the federal Internal Revenue Code of 1986, as amended. The proceeds from severance tax bonds issued are appropriated to the public school capital outlay fund for use by the public school capital outlay council to implement the Public School Capital Outlay Act and are appropriated for expenditure in fiscal years 2018 through 2022. Notwithstanding the provisions of Subsection A of Section 22-24-4 NMSA 1978, the unexpended or unencumbered balance remaining at the end of fiscal year 2022 shall revert to the severance tax bonding fund.

     SECTION 3. 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 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.) and Section 1 of this 2017 act shall be used for the purposes specified in [that paragraph] those provisions.

          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 the supplemental severance tax bonds authorized by:

                (1) 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; and

                (2) Section 1 of this 2017 act upon certification by the secretary of finance and administration of the need to use proceeds from those bonds as outlined in that section."

     SECTION 4. Section 22-8-41 NMSA 1978 (being Laws 1967, Chapter 16, Section 99, as amended by Laws 2017, Chapter 3, Section 1) 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.

          [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 as credit for excess fiscal year 2016 operational fund cash balances in accordance with Section 2 of this 2017 act, and a school district or charter school whose distribution is accordingly reduced shall apply in the amount of that credit its audited fiscal year 2016 operational fund cash balance toward the school district's or charter school's fiscal year 2017 operations.]"

     SECTION 5. TEMPORARY PROVISION--FILM PRODUCTION TAX CREDIT AND FILM AND TELEVISION TAX CREDIT PAYMENT SUSPENSION.--For the period from the effective date of this act through June 30, 2017, notwithstanding the provisions of the Film Production Tax Credit Act, the Tax Administration Act or any other provision of law, the taxation and revenue department shall suspend payments of the refundable portion of the film production tax credit or the film and television tax credit due to any taxpayer claiming a credit until the aggregate amount of payments suspended equals twenty million dollars ($20,000,000). Beginning July 1, 2017, the department shall, in the order they are due, make the payments of the refundable portion of the tax credits that were suspended.

     SECTION 6. REPEAL.--Laws 2017, Chapter 3, Section 2 is repealed.

     SECTION 7. SEVERABILITY.--If, in this act, a change in the use of severance tax bond proceeds or an authorization to expend severance tax bond proceeds is held invalid or otherwise cannot be effectuated, the remainder of the act and any change in the use of severance tax bond proceeds or authorization to expend severance tax bond proceeds shall not be affected.

     SECTION 8. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.

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