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AN ACT

RELATING TO PUBLIC FINANCE; CREATING A SEPARATE

ADMINISTRATIVE FUND FOR THE WASTEWATER FACILITY CONSTRUCTION

LOAN ACT; DEFINING TERMS; MAKING AN APPROPRIATION.

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

Section 1. A new section of the Wastewater Facility

Construction Loan Act is enacted to read:

"CLEAN WATER ADMINISTRATIVE FUND--CREATED--USE.--

A. The "clean water administrative fund" is

created in the state treasury and shall be administered by

the department as agent for the commission. The clean water

administrative fund shall be a dedicated fund, and all money

in the clean water administrative fund is appropriated to the

department to be used solely to administer the wastewater

facility construction loan fund, which may include water

quality planning and water quality analysis and protection

studies if authorized by the department and, if necessary,

the United States environmental protection agency. The

commission may establish procedures, adopt regulations and

set fees as required to administer the clean water

administrative fund in accordance with the Clean Water Act

and state law. The clean water administrative fund shall

consist of money deposited from:

(1) loan administration fees collected by

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the department after the effective date of this section on

loans made from the wastewater facility construction loan

fund;

(2) interest earned on investment of the

clean water administrative fund;

(3) grants from the federal government

allotted to the state for the clean water administrative

fund;

(4) funds as appropriated by the legislature

for administration to implement the provisions of the Clean

Water Act; and

(5) any other public or private money

dedicated to the clean water administrative fund.

B. Money in the clean water administrative fund

not currently needed for the operation of the fund or

otherwise dedicated may be invested according to the

provisions of Chapter 6, Article 10 NMSA 1978, and all

interest earned on such investments shall be credited to the

clean water administrative fund. Money remaining in the

clean water administrative fund at the end of any fiscal year

shall not revert to the general fund but shall accrue to the

credit of the clean water administrative fund.

C. The department shall establish fiscal controls

and accounting procedures that are sufficient to ensure

proper accounting for clean water administrative fund

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payments, disbursements and balances and shall provide an

annual report and an annual independent audit on the clean

water administrative fund to the governor and to the United

States environmental protection agency as required by the

Clean Water Act."

Section 2. Section 74-6A-3 NMSA 1978 (being Laws 1986,

Chapter 72, Section 3, as amended) is amended to read:

"74-6A-3. DEFINITIONS.--As used in the Wastewater

Facility Construction Loan Act:

A. "administrative fee" means a fee assessed and

collected by the department from a local authority on each

loan and expressed as a percentage per year on the

outstanding principal amount of the loan, payable by the

borrower on the same date that principal and interest on the

loan are due, for deposit in the clean water administrative

fund;

B. "commission" means the water quality control

commission;

C. "division" or "department" means the department

of environment;

D. "financial assistance" means loans, the

purchase or refinancing of existing local political

subdivision obligations, loan guarantees, credit enhancement

techniques to reduce interest on loans and bonds, bond

insurance and bond guarantees or any combination of these

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purposes;

E. "fund" means the wastewater facility

construction loan fund;

F. "local authority" means any municipality,

county, incorporated county, sanitation district, water and

sanitation district or any similar district, recognized

Indian tribe or other issuing agency created pursuant to a

joint powers agreement acting on behalf of any entity listed

in this subsection;

G. "operate and maintain" means to perform all

necessary activities, including replacement of equipment or

appurtenances, to ensure the dependable and economical

function of a wastewater facility in accordance with its

intended purpose;

H. "wastewater facility" means a publicly owned

system for treating or disposing of sewage or wastes either

by surface or underground methods, including any equipment,

plant, treatment works, structure, machinery, apparatus or

land, in any combination, that is acquired, used, constructed

or operated for the storage, collection, reduction,

recycling, reclamation, disposal, separation or treatment of

water or wastes or for the final disposal of residues

resulting from the treatment of water or wastes, such as

pumping and ventilating stations, facilities, plants and

works, outfall sewers, interceptor sewers and collector

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sewers and other real or personal property and appurtenances

incident to their use or operation. "Wastewater facility"

also includes a nonpoint source water pollution control

project as eligible under the Clean Water Act;

I. "account" means the wastewater suspense

account;

J. "board" means the state board of finance;

K. "bonds" means wastewater bonds or other

obligations authorized by the commission to be issued by the

board pursuant to the Wastewater Facility Construction Loan

Act;

L. "Clean Water Act" means the federal Clean Water

Act of 1977 and its subsequent amendments or successor

provisions;

M. "federal securities" means direct obligations

of the United States, or obligations the principal and

interest of which are unconditionally guaranteed by the

United States, or an ownership interest in either of the

foregoing;

N. "force account construction" means construction

performed by the employees of a local authority rather than

through a contractor;

O. "holders" means persons who are owners of

bonds, whether registered or not, issued pursuant to the

Wastewater Facility Construction Loan Act;

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P. "issuing resolution" means a formal statement

adopted by the board to issue bonds pursuant to the

Wastewater Facility Construction Loan Act, including any

trust agreement, trust indenture or similar instrument

providing terms and conditions for the bonds to be issued;

and

Q. "recommending resolution" means a formal

statement adopted by the commission recommending to the board

that bonds be issued pursuant to the Wastewater Facility

Construction Loan Act, including any trust agreement, trust

indenture or similar instrument providing the terms and

conditions for the bonds that are issued."

Section 3. Section 74-6A-4 NMSA 1978 (being Laws 1991,

Chapter 172, Section 4) is amended to read:

"74-6A-4. FUND CREATED--ADMINISTRATION.--

A. There is created in the state treasury a

revolving loan fund to be known as the "wastewater facility

construction loan fund", which shall be administered by the

division as agent for the commission and operated as a

separate account. The commission is authorized to establish

procedures and adopt regulations as required to administer

the fund in accordance with the Clean Water Act and state

law. Any regulations relating to the issuance of bonds and

the expenditure of proceeds of bond issues shall be approved

by the board. The commission shall, whenever possible,

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coordinate application procedures and funding cycles with the

New Mexico Community Assistance Act.

B. The following shall be deposited directly in

the fund:

(1) grants from the federal government or

its agencies allotted to the state for capitalization of the

fund;

(2) funds as appropriated by the legislature

to implement the provisions of the Wastewater Facility

Construction Loan Act or to provide state matching funds that

are required by the terms of any federal grant under the

Clean Water Act;

(3) loan principal, interest and penalty

payments if required by the terms of any federal grant under

the Clean Water Act;

(4) money transferred from the account as

needed to fulfill requirements of the Clean Water Act; and

(5) any other public or private money

dedicated to the fund.

C. Money in the fund is appropriated for

expenditure by the commission in a manner consistent with the

terms and conditions of the federal capitalization grants and

the Clean Water Act and may be used:

(1) to provide loans for the construction or

rehabilitation of wastewater facilities;

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(2) to purchase, refund or refinance

obligations incurred by local authorities in the state for

wastewater facilities where the obligations were incurred and

construction commenced after March 7, 1985;

(3) to guarantee, or purchase insurance for,

obligations of local authorities to improve credit market

access or reduce interest rates;

(4) to provide a source of revenue or

security for the payments of principal and interest on bonds

recommended by the commission and issued by the board if the

proceeds of the bonds are deposited in the fund to the extent

provided in the terms of the federal grant;

(5) to provide loan guarantees for similar

revolving funds established by local authorities;

(6) to fund the administrative expenses of

the board, the commission and the division necessary to

implement the provisions of the Wastewater Facility

Construction Loan Act, including but not limited to costs of

servicing loans and issuing bonds, fund start-up costs,

financial management and legal consulting fees and

reimbursement costs for support services from other state

agencies; and

(7) to fund other programs for which the

federal government authorizes use of wastewater grants or to

provide for any other expenditure consistent with the Clean

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Water Act grant program and state law.

D. Pursuant to regulations adopted by the

commission, the division may impose and collect an

administrative fee from each local authority that receives

financial assistance from the fund, which fee shall not

exceed five percent of the total loan amount and which shall

be deposited in the clean water administrative fund.

E. Money not currently needed for the operation of

the fund or otherwise dedicated may be invested according to

the provisions of Chapter 6, Article 10 NMSA 1978, and all

interest earned on such investments shall be credited to the

fund. Money remaining in the fund at the end of any fiscal

year shall not revert to the general fund but shall accrue to

the credit of the fund.

F. Acting as agent for the commission, the

division shall maintain full authority for the operation of

the fund in accordance with applicable federal and state law,

including but not limited to preparing the annual intended

use plan and ensuring that loan recipients are on the state

priority list or otherwise satisfy Clean Water Act

requirements.

G. The division shall establish fiscal controls

and accounting procedures that are sufficient to ensure

proper accounting for fund payments, disbursements and

balances and shall provide an annual report and an annual

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independent audit on the fund to the governor and to the

United States environmental protection agency as required by

the Clean Water Act."

Section 4. EFFECTIVE DATE.--The effective date of the

provisions of this act is July 1, 2007.