SENATE BILL 35
49th legislature - STATE OF NEW MEXICO - first session, 2009
INTRODUCED BY
Clinton D. Harden
FOR THE NEW MEXICO FINANCE AUTHORITY OVERSIGHT COMMITTEE
AN ACT
RELATING TO THE NEW MEXICO RENEWABLE ENERGY TRANSMISSION AUTHORITY; ADDING THE NEW MEXICO RENEWABLE ENERGY TRANSMISSION AUTHORITY TO THE LIST OF QUALIFIED ENTITIES FOR THE PURPOSES OF THE PUBLIC PROJECT REVOLVING FUND; AUTHORIZING THE NEW MEXICO FINANCE AUTHORITY TO ISSUE AND SUPPORT BONDS AND TO EXTEND CREDIT ENHANCEMENTS FOR RENEWABLE ENERGY PROJECTS; EXEMPTING CERTAIN PROPERTY FROM TAXATION; TRANSFERRING THE RENEWABLE ENERGY TRANSMISSION BONDING FUND AND THE RENEWABLE ENERGY TRANSMISSION AUTHORITY OPERATIONAL FUND FROM THE STATE TREASURY TO THE NEW MEXICO RENEWABLE ENERGY TRANSMISSION AUTHORITY; AMENDING THE NEW MEXICO RENEWABLE ENERGY TRANSMISSION AUTHORITY ACT WITH REGARD TO THE DEPOSIT OF FUNDS AND THE ISSUANCE OF BONDS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. A new section of the New Mexico Finance Authority Act is enacted to read:
"[NEW MATERIAL] BONDS FOR RENEWABLE ENERGY TRANSMISSION PROJECTS.--The authority may issue bonds on behalf of renewable energy electrical transmission and storage projects to be entered into pursuant to the New Mexico Renewable Energy Transmission Authority Act."
Section 2. Section 6-21-3 NMSA 1978 (being Laws 1992, Chapter 61, Section 3, as amended) is amended to read:
"6-21-3. DEFINITIONS.--As used in the New Mexico Finance Authority Act:
A. "authority" means the New Mexico finance authority;
B. "bond" means any bonds, notes, certificates of participation or other evidence of indebtedness;
C. "bondholder" or "holder" means a person who is the owner of a bond, whether registered or not;
D. "emergency public project" means a public project:
(1) made necessary by an unforeseen occurrence or circumstance threatening the public health, safety or welfare; and
(2) requiring the immediate expenditure of money that is not within the available financial resources of the qualified entity as determined by the authority;
E. "public project" means the acquisition, construction, improvement, alteration or reconstruction of assets of a long-term capital nature by a qualified entity, including land; buildings; water rights; water, sewerage and waste disposal systems; streets; airports; municipal utilities; parking facilities; and machinery, furniture and equipment. "Public project" includes all proposed expenditures related to the entire undertaking. "Public project" also includes the acquisition, construction or improvement of real property, buildings, facilities and other assets by the authority for the purpose of leasing the property;
F. "qualified entity" means the state or an agency or institution of the state or a county; municipality; school district; two-year public post-secondary educational institution; land grant corporation; acequia association; public improvement district; federally chartered college located in New Mexico; intercommunity water or natural gas supply association or corporation; special district or community water association; nonprofit foundation or other support organization affiliated with a public university, college or other higher educational institution located in New Mexico; [or] an Indian nation, tribe or pueblo located wholly or partially in New Mexico, including a political subdivision or a wholly owned enterprise of an Indian nation, tribe or pueblo or a consortium of those Indian entities; or the New Mexico renewable energy transmission authority; and
G. "security" or "securities", unless the context indicates otherwise, means bonds, notes or other evidence of indebtedness issued by a qualified entity or leases or certificates or other evidence of participation in the lessor's interest in and rights under a lease with a qualified entity and that are payable from taxes, revenues, rates, charges, assessments or user fees or from the proceeds of funding or refunding bonds, notes or other evidence of indebtedness of a qualified entity or from certificates or evidence of participation in a lease with a qualified entity."
Section 3. Section 6-21-6 NMSA 1978 (being Laws 1992, Chapter 61, Section 6, as amended) is amended to read:
"6-21-6. PUBLIC PROJECT REVOLVING FUND--PURPOSE--
ADMINISTRATION.--
A. The "public project revolving fund" is created within the authority. The fund shall be administered by the authority as a separate account, but may consist of such subaccounts as the authority deems necessary to carry out the purposes of the fund. The authority may establish procedures and adopt rules as required to administer the fund in accordance with the New Mexico Finance Authority Act.
B. Except as otherwise provided in the New Mexico Finance Authority Act, money from payments of principal of and interest on loans and payments of principal of and interest on securities held by the authority for public projects authorized specifically by law shall be deposited in the public project revolving fund. The fund shall also consist of any other money appropriated, distributed or otherwise allocated to the fund for the purpose of financing public projects authorized specifically by law.
C. Money appropriated to pay administrative costs, money available for administrative costs from other sources and money from payments of interest on loans or securities held by the authority, including payments of interest on loans and securities held by the authority for public projects authorized specifically by law, that represents payments for administrative costs shall not be deposited in the public project revolving fund and shall be deposited in a separate account of the authority and may be used by the authority to meet administrative costs of the authority.
D. Except as otherwise provided in the New Mexico Finance Authority Act, money in the public project revolving fund is appropriated to the authority to pay the reasonably necessary costs of originating and servicing loans, grants or securities funded by the fund and to make loans or grants and to purchase or sell securities to assist qualified entities in financing public projects in accordance with the New Mexico Finance Authority Act and pursuant to specific authorization by law for each project.
E. Money in the public project revolving fund not needed for immediate disbursement, including money held in reserve, may be deposited with the state treasurer for
short-term investment pursuant to Section 6-10-10.1 NMSA 1978 or may be invested in direct and general obligations of or obligations fully and unconditionally guaranteed by the United States, obligations issued by agencies of the United States, obligations of this state or any political subdivision of the state, interest-bearing time deposits, commercial paper issued by corporations organized and operating in the United States and rated "prime" quality by a national rating service, other investments permitted by Section 6-10-10 NMSA 1978 or as otherwise provided by the trust indenture or bond resolution, if money is pledged for or secures payment of bonds issued by the authority.
F. The authority shall establish fiscal controls and accounting procedures that are sufficient to assure proper accounting for public project revolving fund payments, disbursements and balances.
G. Money on deposit in the public project revolving fund may be used to make interim loans for a term not exceeding two years to qualified entities for the purpose of providing interim financing for any project approved or funded by the legislature.
H. Money on deposit in the public project revolving fund may be used to acquire securities or to make loans to qualified entities in connection with the small loan program. As used in this subsection, "small loan program" means the program of the authority designed to provide financing for public projects, including projects financed by the New Mexico renewable energy transmission authority or financed by the authority on its behalf, in amounts not to exceed one million dollars ($1,000,000) per project. A public project financed pursuant to the small loan program shall not require specific authorization by law.
I. Money on deposit in the public project revolving fund may be designated as a reserve for any bonds issued by the authority, including bonds payable from sources other than the public project revolving fund, and the authority may covenant in any bond resolution or trust indenture to maintain and replenish the reserve from money deposited in the public project revolving fund after issuance of bonds by the authority.
J. Money on deposit in the public project revolving fund may be used to purchase bonds issued by the authority, which are payable from any designated source of revenues or collateral, or to purchase bonds issued by the New Mexico renewable energy transmission authority. Purchasing and holding the bonds in the public project revolving fund shall not, as a matter of law, result in cancellation or merger of the bonds notwithstanding the fact that the authority as the issuer of the bonds is obligated to make the required debt service payments and the public project revolving fund held by the authority is entitled to receive the required debt service payments.
K. Money on deposit in the public project revolving fund may be used to capitalize other financing programs of the authority or of the New Mexico renewable energy transmission authority authorized by law, either directly or from proceeds of bonds issued by the authority and secured by money in the public project revolving fund."
Section 4. Section 6-21-6.7 NMSA 1978 (being Laws 2003, Chapter 341, Section 5, as amended) is amended to read:
"6-21-6.7. CREDIT ENHANCEMENT ACCOUNT CREATED--USE OF ACCOUNT--RELEASE OF MONEY TO THE GENERAL FUND.--
A. The "credit enhancement account" is created as a separate account within the authority for use only as provided in this section.
B. All cigarette tax proceeds distributed each month to the authority pursuant to Subsection G of Section
7-1-6.11 NMSA 1978 shall be deposited in the credit enhancement account.
C. Amounts deposited in the credit enhancement account may be pledged irrevocably as additional security for the payment of the principal, interest, premiums and expenses on bonds issued by the authority or the New Mexico renewable energy transmission authority for:
(1) designing, constructing, equipping and furnishing additions and improvements to the university of New Mexico hospital and the cancer research and treatment center at the university of New Mexico health sciences center; [and]
(2) land acquisition and the planning, designing, construction and equipping of department of health facilities or improvements to such facilities; and
(3) financing and entering into electrical transmission and storage projects authorized pursuant to the New Mexican Renewable Energy Transmission Authority Act.
D. The authority shall determine monthly upon receipt of cigarette tax proceeds if the individual amounts of cigarette tax proceeds distributed pursuant to Subsection E or Subsection F, respectively, of Section 7-1-6.11 NMSA 1978 are sufficient to meet the monthly amount required for immediate payment or designation for payment of principal, interest, premiums and expenses on bonds additionally secured by the credit enhancement account. Any insufficient amount shall be paid immediately from the credit enhancement account. A payment from the credit enhancement account shall be reimbursed in succeeding months from the individual amount of cigarette tax proceeds distributed pursuant to Subsection E or Subsection F, as applicable, of Section 7-1-6.11 NMSA 1978 in excess of the amount required for immediate payment or designation for payment of principal, interest, premiums and expenses on bonds. All money in the credit enhancement account in excess of the monthly amount required for immediate payment or designation for payment of principal, interest, premiums and expenses on bonds shall be transferred monthly by the authority to the general fund.
E. Upon payment of all principal, interest, premiums and expenses on bonds additionally secured by a pledge of amounts deposited in the credit enhancement account, the authority shall certify to the secretary of taxation and revenue that all obligations for bonds have been fully discharged and shall direct the secretary of taxation and revenue and the state treasurer to cease distributing cigarette tax proceeds to the authority pursuant to Subsection G of Section 7-1-6.11 NMSA 1978 and to distribute those cigarette tax proceeds to the general fund.
F. Any law authorizing the imposition, collection or distribution of the cigarette tax or that affects the cigarette tax shall not be amended, repealed or otherwise directly or indirectly modified so as to impair or reduce debt service coverage for any outstanding revenue bonds that may be secured by a pledge of those cigarette tax proceeds distributed to the credit enhancement account, unless the revenue bonds have been discharged in full or provisions have been made for a full discharge."
Section 5. Section 7-36-3 NMSA 1978 (being Laws 1975, Chapter 218, Section 1, as amended by Laws 2006, Chapter 90, Section 1 and by Laws 2006, Chapter 92, Section 1) is amended to read:
"7-36-3. INDUSTRIAL REVENUE BOND, POLLUTION CONTROL BOND, [AND] ECONOMIC DEVELOPMENT BOND AND RENEWABLE ENERGY TRANSMISSION PROJECT PROPERTY--HEALTH-RELATED EQUIPMENT--TAX STATUS.--
A. Property interests of a lessee in project property held under a lease from a [county or a municipality] New Mexico governmental entity under authority of an industrial revenue bond or pollution control revenue bond act [or], the Statewide Economic Development Finance Act or the New Mexico Renewable Energy Transmission Authority Act are exempt from property taxation for as long as there is an outstanding bonded indebtedness under the terms of the revenue bonds issued for the acquisition of the project property, but in no event for a period of more than thirty years from the date of execution of the first lease of the project to the lessee by the county or municipality or in the case of a project financed pursuant to the New Mexico Renewable Energy Transmission Authority Act, not to exceed thirty years from the date of commencement of project construction.
B. Property interests of a person, other than a public utility, arising out of the purchase of a project authorized by the Industrial Revenue Bond Act, the County Industrial Revenue Bond Act, the Pollution Control Revenue Bond Act, [or] the Statewide Economic Development Finance Act or the New Mexico Renewable Energy Transmission Authority Act are exempt from property taxation for as long as the project purchaser remains liable to the project seller for any part of the purchase price or in the case of a project financed pursuant to the New Mexico Renewable Energy Transmission Authority Act, for as long as the project is operated by the developer or project entity, but not to exceed thirty years from the date of execution of the sale agreement.
C. Property interests of a participating health facility in health-related equipment purchased, acquired, leased, financed or refinanced with the proceeds of bonds issued under the Hospital Equipment Loan Act are exempt from property taxation for as long as the participating health facility remains liable for any amount under any lease, loan or other agreement securing the bonds, but not to exceed thirty years from the date the bonds were issued for the health-related equipment.
D. The exemptions from property taxation under this section are not cumulative; provided, however, that the exemptions may be applied consecutively if subsequent exemptions relate to the financing of a new project or new health-related equipment."
Section 6. Section 62-16A-5 NMSA 1978 (being Laws 2007, Chapter 3, Section 5) is amended to read:
"62-16A-5. RENEWABLE ENERGY TRANSMISSION BONDS--APPROPRIATION OF PROCEEDS.--
A. The authority is authorized to issue and sell revenue bonds, known as "renewable energy transmission bonds", payable [solely] from the renewable energy transmission bonding fund and other sources as the authority may designate, in compliance with the New Mexico Renewable Energy Transmission Authority Act, for the purpose of entering into a project when the authority determines that the project is needed.
B. The net proceeds from the bonds are appropriated to the authority for the purpose of financing or acquiring eligible facilities."
Section 7. Section 62-16A-6 NMSA 1978 (being Laws 2007, Chapter 3, Section 6) is amended to read:
"62-16A-6. RENEWABLE ENERGY TRANSMISSION BONDING FUND CREATED--MONEY IN THE FUND PLEDGED.--
A. The "renewable energy transmission bonding fund" is created in the [state treasury] authority. The fund shall consist of revenues received by the authority from operating or leasing eligible facilities, fees and service charges collected and, if the authority has provided financing for eligible facilities, money from payments of principal and interest on loans. Earnings of the fund shall be credited to the fund. Balances in the fund at the end of any fiscal year shall remain in the fund, except as provided in this section.
B. Money in the fund shall be deposited in a bank designated by the authority in an account or accounts as the authority may establish. Money in accounts shall be withdrawn on the order of persons whom the authority may authorize. All deposits of money shall be secured in such manner as the authority may determine. The state auditor and the state auditor's legally authorized representatives may periodically examine the accounts and books of the authority, including its receipts, disbursements, contracts, leases, sinking funds, investments and any other records and papers relating to its financial standing. The authority shall pay a reasonable fee for the examination as determined by the state auditor.
[B.] C. Money in the renewable energy transmission bonding fund is first pledged for the payment of principal and interest on all bonds issued pursuant to the New Mexico Renewable Energy Transmission Authority Act. Money in the fund is appropriated to the authority for the purpose of paying debt service, including redemption premiums, on the bonds and the expenses incurred in the issuance, payment and administration of the bonds.
[C.] D. On the last day of January and the last day of July of each year, the authority shall estimate the amount needed to make debt service and other payments during the next twelve months from the renewable energy transmission bonding fund on the bonds plus the amount that may be needed for any required reserves. The authority shall transfer to the renewable energy transmission authority operational fund any balance in the renewable energy transmission bonding fund above the estimated amounts.
[D.] E. Bonds issued pursuant to the New Mexico Renewable Energy Transmission Authority Act shall be payable [solely] from the renewable energy transmission bonding fund or, with the approval of the bondholders, such other special funds as may be provided by law and do not create an obligation or indebtedness of the state within the meaning of any constitutional provision. No breach of any contractual obligation incurred pursuant to that act shall impose a pecuniary liability or a charge upon the general credit or taxing power of the state, and the bonds are not general obligations for which the state's full faith and credit is pledged.
[E.] F. The state does hereby pledge that the renewable energy transmission bonding fund shall be used only for the purposes specified in this section and pledged first to pay the debt service on the bonds issued pursuant to the New Mexico Renewable Energy Transmission Authority Act. The state further pledges that any law requiring the deposit of revenues in the renewable energy transmission bonding fund or authorizing expenditures from the fund shall not be amended or repealed or otherwise modified so as to impair the bonds to which the renewable energy transmission bonding fund is dedicated as provided in this section."
Section 8. Section 62-16A-9 NMSA 1978 (being Laws 2007, Chapter 3, Section 9) is amended to read:
"62-16A-9. PROCEDURE FOR SALE OF RENEWABLE ENERGY TRANSMISSION BONDS.--
A. Bonds shall be sold by the authority at such times and in such manner as the authority may elect, either at private sale for a negotiated price or to the highest bidder at public sale for cash at [not less than] par, above par or below par and accrued interest.
B. In connection with any public sale of the bonds, the authority shall publish a notice of the time and place of sale in a newspaper of general circulation in the state and also in a recognized financial journal outside the state. The publication shall be made once each week for two consecutive weeks prior to the date fixed for such sale, the last publication to be two business days prior to the date of sale. The notice shall specify the amount, denomination, maturity and description of the bonds to be offered for sale and the place, day and hour at which sealed bids therefore shall be received. All bids, except those of the state, shall be accompanied by a deposit of two percent of the principal amount of the bonds. Deposits of unsuccessful bidders shall be returned upon rejection of the bid. At the time and place specified in such notice, the authority shall open the bids in public and shall award the bonds, or any part thereof, to the bidder or bidders offering the best price. The authority may reject any or all bids and readvertise.
C. The authority may sell a bond issue, or any part thereof, to the state or to one or more investment bankers or institutional investors at private sale."
Section 9. Section 62-16A-10 NMSA 1978 (being Laws 2007, Chapter 3, Section 10) is amended to read:
"62-16A-10. NEW MEXICO RENEWABLE ENERGY TRANSMISSION AUTHORITY ACT IS FULL AUTHORITY FOR ISSUANCE OF BONDS--BONDS ARE LEGAL INVESTMENTS.--
A. The New Mexico Renewable Energy Transmission Authority Act is, without reference to any other act of the legislature, full authority for the issuance and sale of renewable energy transmission bonds, which bonds shall have all the qualities of investment securities under the Uniform Commercial Code and shall not be invalid for any irregularity or defect or be contestable in the hands of bona fide purchasers or holders thereof for value.
B. The bonds are legal investments for any person or board charged with the investment of any public funds, including, without limitation, the state investment council when making investments on behalf of the state permanent fund or the severance tax permanent fund or other funds in its control and the state treasurer when making investments of the general fund or other funds in the state treasurer's control and are acceptable as security for any deposit of public money."
Section 10. Section 62-16A-12 NMSA 1978 (being Laws 2007, Chapter 3, Section 12) is amended to read:
"62-16A-12. RENEWABLE ENERGY TRANSMISSION BONDS TAX EXEMPT.--All renewable energy transmission bonds are exempt from taxation by the state or any of its political subdivisions. Additionally, all mortgages or other security instruments executed as security for the bonds, all personal or real property acquired through use of bond proceeds, all lease agreements made pursuant to the bonds and revenue derived from any lease or sale of an eligible facility developed pursuant to the bonds are exempt from all taxation by the state or any of its political subdivisions."
Section 11. Section 62-16A-13 NMSA 1978 (being Laws 2007, Chapter 3, Section 13) is amended to read:
"62-16A-13. RENEWABLE ENERGY TRANSMISSION AUTHORITY OPERATIONAL FUND.--The "renewable energy transmission authority operational fund" is created in the [state treasury] authority. The fund shall consist of money appropriated and transferred to the fund. Money in the fund shall be deposited in a bank designated by the authority in an account or accounts as the authority may establish. Money in accounts shall be withdrawn on the order of persons whom the authority may authorize. All deposits of money shall be secured in such manner as the authority may determine. The state auditor and the state auditor's legally authorized representatives may periodically examine the accounts and books of the authority, including its receipts, disbursements, contracts, leases, sinking funds, investments and any other records and papers relating to its financial standing. The authority shall pay a reasonable fee for the examination as determined by the state auditor. Earnings from investment of the fund shall be credited to the fund. Money in the fund is appropriated to the authority for the purpose of carrying out the provisions of the New Mexico Renewable Energy Transmission Authority Act. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not revert. [Disbursements from the fund shall be made upon warrants drawn by the secretary of finance and administration pursuant to vouchers signed by the executive director of the authority.]"
Section 12. TEMPORARY PROVISION--TRANSFER OF MONEY AND RECORDS.--On the effective date of this act:
A. all money in the renewable energy transmission bonding fund and records relating to the renewable energy transmission bonding fund in the state treasury shall be transferred to the renewable energy transmission bonding fund in the New Mexico renewable energy transmission authority; and
B. all money in the renewable energy transmission authority operational fund and records relating to the renewable energy transmission authority operational fund in the state treasury shall be transferred to the renewable energy transmission authority operational fund in the New Mexico renewable energy transmission authority.
Section 13. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2009.
- 20 -