0001| HOUSE EDUCATION COMMITTEE SUBSTITUTE FOR | 0002| HOUSE BILLS 189, 8, 18, 333 & 1025 | 0003| 43rd legislature - STATE OF NEW MEXICO - first session, 1997 | 0004| | 0005| | 0006| | 0007| | 0008| | 0009| | 0010| | 0011| AN ACT | 0012| RELATING TO STATE LOTTERY REVENUES; CHANGING THE DISPOSITION OF | 0013| NET REVENUES FOR PUBLIC SCHOOL PURPOSES; CREATING THE LOTTERY | 0014| PUBLIC SCHOOL CAPITAL FUND; CREATING THE LOTTERY TUITION TRUST | 0015| FUND; AMENDING AND ENACTING SECTIONS OF THE NMSA 1978; | 0016| REPEALING A SECTION OF LAWS 1995; MAKING APPROPRIATIONS. | 0017| | 0018| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0019| Section 1. A new section of the New Mexico Lottery Act is | 0020| enacted to read: | 0021| "[NEW MATERIAL] LOTTERY PUBLIC SCHOOL CAPITAL FUND | 0022| CREATED--PURPOSES.-- | 0023| A. The "lottery public school capital fund" is | 0024| created in the state treasury. The fund shall be administered | 0025| by the state department of public education. Earnings from | 0001| investment of the fund shall accrue to the credit of the fund. | 0002| Any balance in the fund at the end of any fiscal year shall | 0003| remain in the fund for use solely for the purposes of the fund. | 0004| B. Money in the lottery public school capital fund | 0005| shall be used only to carry out the provisions of the Public | 0006| School Capital Improvements Act, the Public School Capital | 0007| Outlay Act and the Technology for Education Act and is | 0008| appropriated for those purposes. Annually the state department | 0009| of public education shall determine the amount needed for | 0010| distribution to school districts pursuant to the Public School | 0011| Capital Improvements Act and shall determine the balance in the | 0012| lottery public school capital fund on August 1. Upon the | 0013| determination of the amount to be distributed and the fund | 0014| balance as of August 1, the department shall transfer that | 0015| amount from that balance to the public school capital | 0016| improvements fund for distribution to school districts pursuant | 0017| to the Public School Capital Improvements Act. From any | 0018| portion of the August 1 balance remaining in the lottery public | 0019| school capital fund after the annual distribution to the public | 0020| school capital improvements fund, half shall be transferred to | 0021| the educational technology fund for expenditure in accordance | 0022| with the provisions of the Technology for Education Act and | 0023| half to the public school capital outlay fund for expenditure | 0024| in accordance with the Public School Capital Outlay Act." | 0025| Section 2. A new section of the New Mexico Lottery Act is | 0001| enacted to read: | 0002| "[NEW MATERIAL] LOTTERY TUITION TRUST FUND CREATED-- | 0003| PURPOSE.-- | 0004| A. The "lottery tuition trust fund" is created in the | 0005| state treasury. The fund shall be administered by the commission | 0006| on higher education as a permanent trust fund. Earnings from | 0007| investment of the fund shall accrue to the credit of the fund. | 0008| Any balance in the fund at the end of any fiscal year shall remain | 0009| in the fund and shall not be appropriated for any purpose except | 0010| as provided in this section. | 0011| B. Beginning in fiscal year 2003, an amount not to | 0012| exceed five percent of the balance in the lottery tuition trust | 0013| fund on June 30 of the prior fiscal year may be appropriated | 0014| annually by the legislature to the commission on higher education | 0015| for distribution to New Mexico's public post-secondary educational | 0016| institutions to provide tuition assistance for New Mexico resident | 0017| undergraduates as provided by law." | 0018| Section 3. Section 6-24-23 NMSA 1978 (being Laws 1995, | 0019| Chapter 155, Section 2) is amended to read: | 0020| "6-24-23. LOTTERY TUITION FUND CREATED--PURPOSE.-- | 0021| A. The "lottery tuition fund" is created in the state | 0022| treasury. The fund shall be administered by the commission on | 0023| higher education. Earnings from investment of the fund shall | 0024| accrue to the credit of the fund. Any balance in the fund at the | 0025| end of any fiscal year shall remain in the fund for appropriation | 0001| by the legislature as provided in this section. | 0002| B. Money in the lottery tuition fund [shall be | 0003| available for appropriation by the legislature] is appropriated to | 0004| the commission on higher education for distribution to New | 0005| Mexico's public post-secondary educational institutions to provide | 0006| tuition assistance for New Mexico resident undergraduates as | 0007| provided by law." | 0008| Section 4. Section 6-24-24 NMSA 1978 (being Laws 1995, | 0009| Chapter 155, Section 24) is amended to read: | 0010| "6-24-24. DISPOSITION OF REVENUE.-- | 0011| A. As nearly as practical, an amount equal to at least | 0012| fifty percent of the gross annual revenues from the sale of | 0013| lottery tickets shall be returned to the public in the form of | 0014| lottery prizes. | 0015| B. The authority shall transmit all net revenues to | 0016| the state treasurer, who shall deposit sixty percent of the | 0017| revenues in the lottery public school capital [outlay] fund for | 0018| expenditure pursuant to the provisions of the Public School | 0019| Capital Improvements Act, the Public School Capital Outlay Act and | 0020| [forty] the Technology for Education Act, thirty-two percent in | 0021| the lottery tuition fund and eight percent in the lottery tuition | 0022| trust fund. Estimated net revenues shall be transmitted monthly | 0023| to the state treasurer for deposit in the funds, provided the | 0024| total amount of annual net revenues for the fiscal year shall be | 0025| transmitted no later than August 1 [each] of the following fiscal | 0001| year. | 0002| C. In determining net revenues, operating expenses of | 0003| the lottery include all costs incurred in the operation and | 0004| administration of the lottery and all costs resulting from any | 0005| contracts entered into for the purchase or lease of goods or | 0006| services required by the lottery, including [but not limited to] | 0007| the costs of supplies, materials, tickets, independent audit | 0008| services, independent studies, data transmission, advertising, | 0009| promotion, incentives, public relations, communications, | 0010| commissions paid to lottery retailers, printing, distribution of | 0011| tickets, purchases of annuities or investments to be used to pay | 0012| future installments of winning lottery tickets, debt service and | 0013| payment of any revenue bonds issued, contingency reserves, | 0014| transfers to the reserve fund and any other necessary costs | 0015| incurred in carrying out the provisions of the New Mexico Lottery | 0016| Act. | 0017| D. An amount up to two percent of the gross annual | 0018| revenues shall be set aside as a reserve fund to cover bonuses and | 0019| incentive plans for lottery retailers, special promotions for | 0020| retailers, purchasing special promotional giveaways, sponsoring | 0021| special promotional events, compulsive gambling rehabilitation and | 0022| such other purposes as the board deems necessary to maintain the | 0023| integrity and meet the revenue goals of the lottery. The board | 0024| shall report annually to the governor and each regular session of | 0025| the legislature on the use of the money in the reserve fund. Any | 0001| balance in excess of fifty thousand dollars ($50,000) at the end | 0002| of any fiscal year shall be transferred to the lottery tuition | 0003| fund." | 0004| Section 5. Section 6-24-27 NMSA 1978 (being Laws 1995, | 0005| Chapter 155, Section 27) is amended to read: | 0006| "6-24-27. REVENUE AND BUDGET REPORTS--RECORDS--INDEPENDENT | 0007| AUDITS.-- | 0008| A. The board shall: | 0009| (1) submit quarterly and annual reports to the | 0010| governor, legislative finance committee and lottery oversight | 0011| committee disclosing the total lottery revenue, prizes, | 0012| commissions, ticket costs, operating expenses and net revenues of | 0013| the authority during the reporting period and, in the annual | 0014| report, describe the organizational structure of the authority and | 0015| summarize the functions performed by each organizational division | 0016| within the authority; | 0017| (2) maintain weekly or more frequent records of | 0018| lottery transactions, including the distribution of lottery | 0019| tickets to retailers, revenue received, claims for prizes, prizes | 0020| paid, prizes forfeited and other financial transactions of the | 0021| authority; and | 0022| (3) use the state government fiscal year. | 0023| B. The board shall provide, for informational | 0024| purposes, to the department of finance and administration and the | 0025| legislative finance committee, by December 1 of each year, a copy | 0001| of the annual proposed operating budget for the authority for the | 0002| succeeding fiscal year. This budget proposal shall also be | 0003| accompanied by an estimate of the net revenues to be deposited in | 0004| the [public school capital outlay fund, and] lottery public school | 0005| capital fund, the lottery tuition fund and the lottery tuition | 0006| trust fund for the current and succeeding fiscal years. | 0007| C. The board shall contract with an independent | 0008| certified public accountant or firm for an annual financial audit | 0009| of the authority. The certified public accountant or firm shall | 0010| have no financial interest in any lottery contractor. The | 0011| certified public accountant or firm shall present an audit report | 0012| no later than March 1 for the prior fiscal year. The certified | 0013| public accountant or firm shall evaluate the internal auditing | 0014| controls in effect during the audit period. The cost of this | 0015| financial audit shall be an operating expense of the authority. | 0016| The legislative finance committee may, at any time, order an audit | 0017| of any phase of the operations of the authority, at the expense of | 0018| the authority, and shall receive a copy of the annual independent | 0019| financial audit. A copy of any audit performed by the certified | 0020| public accountant or ordered by the legislative finance committee | 0021| shall be transmitted to the governor, the speaker of the house of | 0022| representatives, the president pro tempore of the senate, the | 0023| legislative finance committee and the lottery oversight | 0024| committee." | 0025| Section 6. Section 21-1-4.4 NMSA 1978 (being Laws 1996, | 0001| Chapter 71, Section 4) is amended to read: | 0002| "21-1-4.4. COMMISSION ON HIGHER EDUCATION--DETERMINATION OF | 0003| TUITION SCHOLARSHIPS--USE OF LOTTERY TUITION FUND.-- | 0004| A. Prior to June 1 of each year, the commission on | 0005| higher education shall determine the amount of money available for | 0006| tuition scholarships at state public post-secondary educational | 0007| institutions. Based on the amount [appropriated by the | 0008| legislature] available from the lottery tuition fund and on the | 0009| projected enrollment at all public post-secondary educational | 0010| institutions, the commission on higher education shall establish | 0011| the percentage of tuition that shall be awarded for qualified | 0012| resident students attending New Mexico public post-secondary | 0013| educational institutions. The percentage of tuition awarded shall | 0014| be the same for each institution, regardless of the actual cost of | 0015| tuition at each institution. | 0016| B. In preparing guidelines for the administration of | 0017| the tuition scholarship program pursuant to Sections 21-1-4.3, | 0018| 21-13-10, 21-16-10.1 and 21-17-6.1 NMSA 1978, the commission on | 0019| higher education shall ensure that tuition scholarships from the | 0020| lottery tuition fund are awarded to students so that they | 0021| supplement and do not replace other tuition scholarships, awards | 0022| or grants given to the students from public or nonprofit sources." | 0023| Section 7. Section 22-15A-9 NMSA 1978 (being Laws 1994, | 0024| Chapter 96, Section 9) is amended to read: | 0025| "22-15A-9. EDUCATIONAL TECHNOLOGY FUND--DISTRIBUTION.-- | 0001| A. Upon annual review and approval of a school | 0002| district's educational technology plan, the bureau shall determine | 0003| a separate distribution from the educational technology fund for | 0004| each school district. | 0005| B. On or before July 31 of each year, the bureau shall | 0006| distribute money in the educational technology fund directly to | 0007| each school district in an amount equal to ninety percent of the | 0008| district's estimated entitlement as determined by the projected | 0009| membership for the school year. A school district's entitlement | 0010| is that portion of the total amount of the annual appropriation | 0011| that the projected membership bears to the projected membership of | 0012| the state. Kindergarten membership shall be calculated on a one- | 0013| half full-time equivalent basis. | 0014| C. On or before January 30 of each year, the bureau | 0015| shall recompute each entitlement using the final funded membership | 0016| for that year and shall allocate the balance of the annual | 0017| appropriation adjusting for any over- or under-projection of | 0018| membership. | 0019| D. Any school district receiving funding pursuant to | 0020| the Technology for Education Act is responsible for the purchase, | 0021| distribution, use and maintenance of educational technology. | 0022| E. As used in this section: | 0023| (1) "annual appropriation" means for any fiscal | 0024| year the sum of appropriations to the educational technology fund | 0025| for the fiscal year and all state lottery revenues distributed to | 0001| the fund and available for distribution in that fiscal year; and | 0002| (2) "membership" means the total enrollment of | 0003| qualified students, as defined in the Public School Finance Act, | 0004| on the current roll of class or school on a specified day. The | 0005| current roll is established by the addition of original entries | 0006| and re-entries minus withdrawals. Withdrawal of students, in | 0007| addition to students formally withdrawn from the public school, | 0008| includes students absent from the public school for as many as ten | 0009| consecutive school days." | 0010| Section 8. Section 22-25-9 NMSA 1978 (being Laws 1975 | 0011| (S.S.), Chapter 5, Section 9, as amended by Laws 1988, Chapter 64, | 0012| Section 44 and also by Laws 1988, Chapter 66, Section 2) is | 0013| amended to read: | 0014| "22-25-9. STATE DISTRIBUTION TO DISTRICT IMPOSING TAX UNDER | 0015| CERTAIN CIRCUMSTANCES.-- | 0016| A. The [director] state superintendent shall | 0017| distribute to any school district that has imposed a tax under the | 0018| Public School Capital Improvements Act an amount from the public | 0019| school capital improvements fund that is equal to the amount by | 0020| which the revenue estimated to be received from the imposed tax, | 0021| at the rate certified by the department of finance and | 0022| administration in accordance with Section 22-25-7 NMSA 1978, | 0023| assuming a one hundred percent collection rate, is less than an | 0024| amount calculated by multiplying the district's first forty-days' | 0025| total program units times thirty-five dollars ($35.00) and further | 0001| multiplying the product obtained by the tax rate approved by the | 0002| qualified electors in the most recent election on the question of | 0003| imposing a tax under the Public School Capital Improvements Act. | 0004| The distribution shall be made each year that the tax is imposed | 0005| in accordance with Section 22-25-7 NMSA 1978; provided that no | 0006| state distribution from the public school capital improvements | 0007| fund may be used for capital improvements to any administration | 0008| building of a school district. In the event that sufficient funds | 0009| are not available in the public school capital improvements fund | 0010| to make the state distribution provided for in this [section] | 0011| subsection, the dollar per program unit figure shall be reduced as | 0012| necessary. | 0013| B. After calculating the amounts to be distributed to | 0014| school districts in Subsection A of this section, the state | 0015| superintendent shall make the same calculation for the same school | 0016| districts using forty-five dollars ($45.00) as the dollar per | 0017| program unit multiplier. Based on that calculation, the state | 0018| superintendent shall make a distribution from the lottery public | 0019| school capital fund to any school district that qualifies for a | 0020| distribution in an amount that is equal to the amount of the | 0021| difference between using thirty-five dollars ($35.00) and forty- | 0022| five dollars ($45.00) as the multiplier in the calculation in | 0023| Subsection A of this section. This amount shall be distributed to | 0024| the school district at the same time as and subject to the | 0025| provisions of the distributions in Subsection A of this section. | 0001| In the event that sufficient funds are not available from the | 0002| balance on August 1 in the lottery public school capital fund to | 0003| make the distributions provided for in this subsection, the dollar | 0004| per program unit multiplier shall be reduced as necessary. In the | 0005| event that sufficient funds are available from the balance on | 0006| August 1 in the lottery public school capital fund to make the | 0007| distributions provided for in this subsection, any excess amount | 0008| remaining shall be distributed equally between the public school | 0009| capital outlay fund and the educational technology fund." | 0010| Section 9. REPEAL.--Laws 1995, Chapter 155, Section 38 is | 0011| repealed. | 0012| Section 10. EFFECTIVE DATE.--The effective date of the | 0013| provisions of this act is July 1, 1997. | 0014|  |