HOUSE BILL 601
54th legislature - STATE OF NEW MEXICO - first session, 2019
David M. Gallegos and Sheryl Williams Stapleton and
Rachel A. Black and Phelps Anderson and Gregg Schmedes
RELATING TO PUBLIC SCHOOL FINANCE; SEQUESTERING UP TO TEN PERCENT OF A SCHOOL DISTRICT'S OR CHARTER SCHOOL'S CASH BALANCE FROM NONSCHOOL PURPOSES OR FROM LEGISLATIVE CREDITING THROUGH THE STATE EQUALIZATION GUARANTEE DISTRIBUTION; MAKING AN APPROPRIATION.
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.
[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.]
D. School districts and charter schools shall sequester the following amounts of their cash balances for emergencies, and that money shall not be available for further appropriation by the legislature for non-district or non-charter school purposes or to be taken credit for as a means to reduce the state equalization guarantee distribution:
(1) for very small school districts with fewer than two hundred MEM, ten percent;
(2) for small school districts with two hundred to two thousand MEM, seven percent;
(3) for mid-size school districts with two thousand one to twenty-five thousand MEM, five percent; and
(4) for large school districts with over twenty-five thousand MEM, three percent."
SECTION 2. APPROPRIATION.--Forty million eight hundred thousand dollars ($40,800,000) is appropriated from the general fund to the public education department for expenditure in fiscal year 2020 to restore the operational fund cash balances of the school districts and charter schools whose fiscal year 2017 state equalization guarantee distributions were reduced in accordance with Laws 2017, Chapter 3, Section 2. The department shall distribute to each of those school districts and charter schools the amount of its reduction pursuant to that section. Any unexpended or unencumbered balance remaining at the end of fiscal year 2020 shall revert to the general fund.
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