SENATE BILL 198
51st legislature - STATE OF NEW MEXICO - second session, 2014
INTRODUCED BY
Michael S. Sanchez
AN ACT
RELATING TO PUBLIC MONEY; CHANGING THE PROCESS BY WHICH WATER PROJECTS ARE APPLIED FOR, EVALUATED, PRIORITIZED, RECOMMENDED AND FUNDED WITH PUBLIC MONEY; REQUIRING ALL STATE AGENCIES THAT FUND OR ADMINISTER WATER PROJECTS TO PARTICIPATE IN THE WATER PROJECT PROCESS; REQUIRING WATER PROJECT APPLICATIONS TO BE EVALUATED PURSUANT TO THE STATE WATER PLAN AND THE STATE WATER CAPITAL PLAN; MAKING ASSET MANAGEMENT PLANS ELIGIBLE ITEMS FOR PAYMENT FROM LOANS AND GRANTS; CHANGING THE POWERS AND DUTIES OF THE WATER TRUST BOARD; CHANGING THE APPOINTING POWER FOR SOME MEMBERS; CREATING THE WATER TRUST OFFICE; PRESCRIBING POWERS AND DUTIES; REQUIRING THE WATER TRUST BOARD TO DEVELOP A STANDARDIZED APPLICATION FORM AND PROCESS FOR FUNDING WATER PROJECTS; MAKING CERTAIN FUNDS STATE TREASURY FUNDS; REQUIRING CONTINUING LEGISLATIVE OVERSIGHT OF THE ACTIVITIES OF THE WATER TRUST BOARD; AMENDING, REPEALING AND ENACTING SECTIONS OF THE NMSA 1978; MAKING AN APPROPRIATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 72-4A-2 NMSA 1978 (being Laws 2001, Chapter 164, Section 2, as amended) is amended to read:
"72-4A-2. FINDINGS AND PURPOSE.--
A. The legislature finds that:
(1) New Mexico is in a desert where water is a scarce resource;
(2) the economy depends on reasonable and fair allocation of water for all purposes;
(3) the public welfare depends on efficient use and conservation of water;
(4) New Mexico must comply with its delivery obligations under interstate compacts; and
(5) public confidence and support for water use efficiency and conservation is based on a reasonable balance of investments in water infrastructure and management.
B. The legislature finds further that:
(1) there is an extensive need for water projects;
(2) state agencies lack adequate staff and other resources to administer the state's water resources and to complete important projects such as statewide planning and adjudications;
(3) leveraging nonstate funds, particularly federal funds, increasingly depends on the state planning and prioritizing its water project needs and matching those nonstate funds with state appropriations; and
(4) private sector participation in financing water projects depends on adequate revenues as well as state investments to make private capital secure.
C. The legislature finds further that:
(1) the state responsibility for planning and financing water projects is fragmented across state agencies, and the authority and financing decisions are too often made piecemeal and without regard for the total cost of a water project; and
(2) effective use of monetary resources requires an integrated, whole-state approach to the planning and funding of water infrastructure and other water projects.
[B.] D. The purpose of the Water Project Finance Act is to provide for a rational, cogent statewide process for priority ranking of water project applications based on the short- and long-term water capital plan that encourages water use efficiency, resource conservation and protection and fair distribution and allocation of New Mexico's scarce water resources for beneficial purposes of use within the state while assuring consistency with the constitution of New Mexico."
SECTION 2. Section 72-4A-3 NMSA 1978 (being Laws 2001, Chapter 164, Section 3, as amended) is amended to read:
"72-4A-3. DEFINITIONS.--As used in the Water Project Finance Act:
[A. "authority" means the New Mexico finance authority;
B.] A. "board" means the water trust board;
B. "office" means the water trust office;
C. "political subdivision" means a municipality, county, land grant-merced controlled and governed pursuant to Sections 49-1-1 through 49-1-18 or 49-4-1 through 49-4-21 NMSA 1978, regional or local public water utility authority created by statute, irrigation district, conservancy district, special district, acequia, soil and water conservation district, water and sanitation district or an association organized and existing pursuant to the Sanitary Projects Act;
D. "qualifying water project" means a water project [recommended by the board for funding by the legislature; and] approved by the board;
E. "qualifying entity" means a state agency,
a political subdivision of the state [an intercommunity water or natural gas supply association or corporation organized under Chapter 3, Article 28 NMSA 1978], a recognized Indian nation, tribe or pueblo, the boundaries of which are located wholly or partially in New Mexico or an association of such entities created pursuant to the Joint Powers Agreements Act or other authorizing legislation for the exercise of their common powers;
F. "technical review team" means an interagency staff team of technical, financial and other necessary expertise that reviews a water project application;
G. "threshold requirements" means the initial requirements of a water project application that must be satisfied before the application can be evaluated for priority ranking and funding recommendations; and
H. "water project" means a project that meets federal and state requirements and is:
(1) for:
(a) storage, conveyance or delivery of water to end users;
(b) wastewater treatment, collection and disposal;
(c) recoverable water, including brackish water, produced water, gray water and wastewater reuse;
(d) implementation of federal Endangered Species Act of 1973 collaborative programs;
(e) restoration and management of watersheds;
(f) flood control; or
(g) water conservation or recycling, treatment or reuse; and
(2) a project for which the service area is wholly within the boundaries of the state or is determined by the board to be an interstate water project that directly benefits New Mexico."
SECTION 3. Section 72-4A-4 NMSA 1978 (being Laws 2001, Chapter 164, Section 4, as amended) is amended to read:
"72-4A-4. WATER TRUST BOARD CREATED.--
A. The "water trust board" is created and is administratively attached to the office. The board is composed of the following [sixteen] eighteen members:
(1) the state engineer or the state engineer's designee;
(2) the secretary of finance and administration or the secretary's designee;
(3) the executive director of the New Mexico finance authority or the executive director's designee;
(4) the secretary of environment or the secretary's designee;
(5) the secretary of energy, minerals and natural resources or the secretary's designee;
(6) the director of the department of game and fish or the director's designee;
(7) the director of the New Mexico department of agriculture or the director's designee;
(8) the [executive director of the New Mexico municipal league or the executive director's designee] head of a statewide association representing municipalities;
(9) the [executive director of the New Mexico] head of a statewide association [of] representing counties [or the executive director's designee];
(10) [five] seven public members appointed by the [governor and confirmed by the senate and] New Mexico legislative council who represent:
(a) the environmental community;
(b) an irrigation or conservancy district that uses surface water;
(c) an irrigation or conservancy district that uses ground water;
(d) acequia water users; [and]
(e) soil and water conservation districts;
(f) water associations organized under the Sanitary Projects Act, Laws 1947, Chapter 206, Laws 1949, Chapter 79 or Laws 1951, Chapter 52; and
(g) colonias;
(11) one public member appointed by the Indian affairs commission; and
(12) representative of the Navajo Nation who lives in New Mexico appointed by the president of the Navajo Nation [or the president's designee].
B. The chair of the board shall be elected by a quorum of the board members. The board shall meet at the call of the chair or whenever three members submit a request in writing to the chair, but not less often than once each calendar year. A majority of members constitutes a quorum for the transaction of business. The affirmative vote of at least a majority of a quorum present shall be necessary for an action to be taken by the board.
C. Each public member of the board [appointed by the governor] shall be appointed to a four-year term. To provide for staggered terms, two of the initially [governor-appointed] appointed public members shall be appointed for terms of two years and three members for terms of four years. Thereafter, all [governor-appointed] public members shall be appointed for four-year terms. Vacancies in public member positions shall be filled by appointment by the [governor] New Mexico legislative council for the remainder of the unexpired term.
D. Public members of the board shall be reimbursed for attending meetings of the board as provided for nonsalaried public officers in the Per Diem and Mileage Act and shall receive no other compensation, perquisite or allowance.
E. Public members of the board are appointed public officials of the state while carrying out their duties and activities under the Water Project Finance Act.
F. The public members of the water trust board on July 1, 2014 shall finish out the terms for which they were appointed. If a vacancy occurs in a public member's term after July 1, 2014, the New Mexico legislative council shall fill the vacancy by appointment of a qualified person for the remainder of the term."
SECTION 4. Section 72-4A-5 NMSA 1978 (being Laws 2001, Chapter 164, Section 5, as amended) is repealed and a new Section 72-4A-5 NMSA 1978 is enacted to read:
"72-4A-5. [NEW MATERIAL] BOARD--POWERS AND DUTIES.--
A. The board may employ staff, including a director and no more than one deputy or assistant director, and such technical and clerical staff as necessary to implement the provisions of the Water Project Finance Act.
B. The board shall adopt and promulgate such rules as necessary to carry out its duties pursuant to the Water Project Finance Act, including rules that:
(1) establish a standardized water project application form that shall be used by all qualifying entities applying for water project funding in this state;
(2) establish threshold requirements for water project applications;
(3) establish water project ranking priorities, including high priority for those projects that:
(a) address federal Safe Drinking Water Act compliance;
(b) are technically sound and comply with the water capital plan and the state water plan;
(c) address public health and safety issues in a way that fit into longer-term solutions;
(d) have matching contributions from federal, local or private funding sources;
(e) if applicable, have obtained all requisite state and federal permits and authorizations necessary to initiate the project;
(f) have demonstrated capacity to oversee, operate and maintain the water project; and
(g) meet other requirements established by rule of the board for priority ranking; and
(4) govern terms and conditions of loans and grants from the water project fund.
C. The board shall:
(1) hold a public hearing at which qualifying entities that have met threshold requirements have the opportunity to testify on the need for their water projects and public comment pertaining to the projects is received;
(2) determine, with advice from the technical review teams and the state and federal agencies and instrumentalities that have funding available for water projects in New Mexico, the priority rank of each water project and the funding mix of loans and grants that are available for each project;
(3) authorize qualifying water projects based on recommendations from the technical review teams;
(4) develop its water project funding request for the legislature and the governor for capital outlay funds additional to the severance tax bond set-aside and the water trust fund distribution; and
(5) carry out its powers and duties in accordance with the provisions of the Water Project Finance Act or other laws, as applicable."
SECTION 5. A new section of the Water Project Finance Act is enacted to read:
"[NEW MATERIAL] OFFICE--DIRECTOR--STAFF--QUALIFICATIONS--DUTIES.--
A. The "water trust office" is created as the staff agency for the board. The office is an adjunct agency as provided in the Executive Reorganization Act. The board shall appoint a director who shall be well-versed in civil engineering, public finance or other appropriate field and who shall have managerial experience. The director shall be appointed without regard to political affiliation and solely on the basis of qualifications and fitness for the position. The director may be fired only for cause.
B. The director may employ no more than one deputy or assistant director with the approval of the board and, subject to budgetary constraints, may employ or contract with such technical and clerical personnel as necessary to carry out the provisions of this section.
C. The office may enter into contracts, memoranda of understanding, joint powers agreements and other agreements to carry out the provisions of the Water Project Finance Act and the directions of the board.
D. The office shall:
(1) serve as staff to the board;
(2) as directed by the board, provide assistance to qualifying entities and oversight of qualifying water projects, either directly or through participation on a technical review team;
(3) recommend evaluation procedures for adoption by the board to ensure that all applications receive appropriate technical review and financial analyses and that any conditions recommended by the technical review team are appropriate;
(4) assist the board in the development and updating of the water capital plan; and
(5) coordinate receipt of invoices or vouchers and payments to qualifying entities or their fiscal agents from the various funding entities for water project work accomplished and approved for payment."
SECTION 6. A new section of the Water Project Finance Act is enacted to read:
"[NEW MATERIAL] STATEWIDE COMPREHENSIVE MULTIYEAR
CAPITAL PLAN FOR WATER PROJECTS.--The board shall take the lead in developing a statewide comprehensive multiyear "water capital plan" for water infrastructure and other water purposes throughout the state and the types of water projects necessary to meet stated short- and long-term planning strategies, priorities and objectives to provide both water quality and quantity to address public health and safety and the socioeconomic needs of the state. The water capital plan shall be based on the state water plan. The water capital plan shall be updated on a regular basis, but at least biennially, and shall include a discussion of how past and current water projects are affecting priorities, goals and objectives."
SECTION 7. A new section of the Water Project Finance Act is enacted to read:
"[NEW MATERIAL] WATER PROJECTS--INTERAGENCY TECHNICAL REVIEW TEAM--MEMBERS--DUTIES--INTERAGENCY COOPERATION.--
A. Each water project application shall be evaluated by an interagency "technical review team". The following state agencies and the New Mexico finance authority shall participate in technical review teams as necessary and appropriate, and they shall assign the appropriate staff to review water project applications in concert with other members of the teams:
(1) the office;
(2) the interstate stream commission;
(3) the office of the state engineer;
(4) the department of environment;
(5) the department of finance and administration;
(6) the department of game and fish;
(7) the energy, minerals and natural resources department; and
(8) any other state agency that the office requests to assist in evaluating a water project.
B. The technical review team shall:
(1) determine if threshold requirements for a water project application have been met;
(2) evaluate the water project applicant for technical, managerial and financial capacity;
(3) evaluate the application as provided in Section 9 of this 2014 act;
(4) advise the board on best practices and appropriate technical solutions to water project issues;
(5) advise the board on funding packages for ranked projects;
(6) advise and comment on water policy issues pertaining to applications; and
(7) assist the board in the development and updating of the water capital plan."
SECTION 8. A new section of the Water Project Finance Act is enacted to read:
"[NEW MATERIAL] THRESHOLD REQUIREMENTS.--
A. Threshold requirements for evaluation of a water project application shall include that the qualifying entity:
(1) has completed the state engineer's water project questionnaire;
(2) has a financial plan and is in compliance with the Audit Act;
(3) has a rate structure that covers expenses, builds necessary reserves and encourages conservation;
(4) has an asset management plan;
(5) is in full compliance with federal and state laws and state engineer and department of environment regulatory requirements;
(6) has a governance structure adequate for proper direction and oversight of the system that the water project is a part of and that meets all applicable state and federal laws;
(7) has a plan to support the water project development, operation and maintenance;
(8) has an energy efficiency strategy for its water project; and
(9) meets other threshold requirements established by the board.
B. If an applicant does not meet threshold requirements, the technical review team shall work with the applicant to address deficiencies and help the applicant to qualify in the next application period."
SECTION 9. A new section of the Water Project Finance Act is enacted to read:
"[NEW MATERIAL] WATER PROJECTS--APPLICATION--EVALUATION BY TECHNICAL REVIEW TEAM--BOARD RANKINGS--REQUIREMENTS.--
A. The board shall publish a schedule of water project request deadlines each year, including dates for:
(1) notifications of intent to submit an application;
(2) applications;
(3) assignment of applications to technical review teams;
(4) the qualifying entities' hearing to be held by the board;
(5) evaluations and recommendations, including funding types and sources, from the technical review teams to the board; and
(6) review of final recommendations, including priority ranking of water projects and the type and sources of funding for each project, by the board.
B. A qualifying entity shall submit only one application for a water project, even if the water project includes component parts and involves more than one state agency, and may request funding from loans or grants from several sources. The application shall be submitted to the board.
C. The office shall forward the application to a technical review team to determine if the threshold requirements have been met.
D. If the application passes the threshold requirements, the technical review team shall evaluate the application to determine:
(1) if the application proposes the best feasible technical solution to the identified problem;
(2) if the water project is in compliance with applicable state and federal laws and rules adopted in accordance with those laws, including the federal Safe Drinking Water Act, Clean Water Act of 1977, National Environmental Policy Act of 1969 and Endangered Species Act of 1973;
(3) if the water project is in compliance with the office of the state engineer's water rights and permit requirements;
(4) if the water project is consistent with the state water plan and the water capital plan;
(5) the financial and management capability of the applicant; and
(6) other requirements required by rule of the board.
E. The office shall coordinate the technical review team's evaluation, including data collection and analyses, and shall participate as a member of the technical review team in the evaluation of applications and development of recommendations. The recommendations to the board shall include priority ranking and funding types and sources, and may include technical or other substantive conditions to be included in the final water project approval. The technical review team shall endeavor, insofar as practicable, to make a single consensus recommendation for each water project, including priority ranking and a full funding package that specifies funding sources to the board.
F. To be a qualifying water project, the project must be funded as a whole project or be phased in such a way that the result of each phase is a water project with independent utility. The technical review team shall develop a full funding package of the appropriate combination of service rates; state, federal, local and private loans, grants and matching funds; and any other funding sources before ranking a water project as a priority for that year and for the board's consideration.
G. The board shall consider the recommendations of the technical review team and shall take public comments on the recommendations before taking action. The board may change or reject any technical review team recommendation before adopting its own tentative recommendations.
H. After a water project is tentatively adopted by the board, it shall submit the water project and its funding package to the state agencies or other entities from which funding is being sought for their approval or denial of the funding request. If a funding request for a water project is denied by a state agency or other entity, the board may:
(1) consider other funding mixes;
(2) change the water project's priority ranking; or
(3) reject the application.
I. Based on recommendations from the technical review team and feedback from the state agencies and other entities from which funding is sought, the board shall make its final decisions on priority ranking of applications, funding sources and project conditions."
SECTION 10. Section 72-4A-7 NMSA 1978 (being Laws 2001, Chapter 164, Section 7, as amended) is amended to read:
"72-4A-7. CONDITIONS FOR GRANTS AND LOANS.--
A. Grants and loans shall be made only to qualifying entities that:
(1) agree to operate and maintain a water project so that it will function properly over the structural and material design life, which shall not be less than twenty years;
(2) require the contractor of a construction project to post a performance and payment bond in accordance with the requirements of Section 13-4-18 NMSA 1978;
(3) provide written assurance signed by an attorney or provide a title insurance policy that the qualifying entity has proper title, easements and rights of way to the property upon or through which a water project proposed for funding is to be constructed or extended;
(4) meet the requirements of the financial capability set by the board to ensure sufficient revenues to operate and maintain a water project for its useful life and to repay the loan;
(5) agree to properly maintain financial records and to conduct an audit of a project's financial records;
(6) agree to pay costs of originating grants and loans as determined by rules adopted by the board; and
(7) except in the case of an emergency,
submit a water conservation plan with its application if required to do so and one is not on file with the state engineer, pursuant to Section 72-14-3.2 NMSA 1978.
B. Plans and specifications for a water project shall be approved by the [authority, after review and upon the recommendation of the state engineer and the department of environment] technical review team before grant or loan disbursements to pay for construction costs are made to a qualifying entity. Plans and specifications for a water project shall incorporate available technologies and operational design for water use efficiency.
C. Grants and loans shall be made only for eligible items, which include:
(1) to match federal and local cost shares;
(2) engineering feasibility reports and asset management plans;
(3) contracted engineering design;
(4) inspection of construction;
(5) special engineering services;
(6) environmental reports or archaeological clearances and other surveys;
(7) construction;
(8) land acquisition;
(9) easements and rights of way; and
(10) legal costs and fiscal agent fees, as allowed by law."
SECTION 11. Section 72-4A-8 NMSA 1978 (being Laws 2001, Chapter 164, Section 8) is amended to read:
"72-4A-8. WATER TRUST FUND--CREATED--INVESTMENT--DISTRIBUTION.--
A. The "water trust fund" is created in the state treasury. The fund shall consist of money appropriated, donated or otherwise accrued to the fund. Money in the fund shall be invested by the state investment officer as land grant permanent funds are invested pursuant to Chapter 6, Article 8 NMSA 1978. Earnings from investment of the fund shall be credited to the fund. Money in the fund shall not be expended for any purpose, but an annual distribution shall be made to the water project fund in accordance with Subsection B of this section.
B. On July 1 of fiscal year 2003 and on July 1 of each fiscal year thereafter, an annual distribution shall be made from the water trust fund to the water project fund in the amount of four million dollars ($4,000,000) until that amount is less than an amount equal to four and seven-tenths percent of the average of the year-end market values of the water trust fund for the immediately preceding five calendar years. Thereafter, the amount of the annual distribution shall be four and seven-tenths percent of the average of the year-end market values of the water trust fund for the immediately preceding five calendar years or four million dollars ($4,000,000), whichever is less."
SECTION 12. Section 72-4A-9 NMSA 1978 (being Laws 2001, Chapter 164, Section 9, as amended) is amended to read:
"72-4A-9. WATER PROJECT FUND--CREATED--PURPOSE.--
A. The "water project fund" is created as a nonreverting fund in the [New Mexico finance authority] state treasury and shall consist of distributions made to the fund from the water trust fund and payments of principal of and interest on loans for approved water projects. The fund shall also consist of any other money appropriated, distributed or otherwise allocated to the fund for the purpose of supporting water projects pursuant to provisions of the Water Project Finance Act. The fund shall be administered by the [authority] office. Income from investment of the water project fund shall be credited to the fund. Balances in the fund at the end of any fiscal year shall not revert to [the general] any other fund. The water project fund may consist of such subaccounts as the [authority] office deems necessary to carry out the purposes of the fund. The [authority] office may establish procedures and adopt rules as required to administer the fund [and to recover from the fund costs of administering the fund and originating grants and loans].
B. Ten percent of [all] the severance tax bond and water trust fund distributions to the water project [funds] fund shall be dedicated to the state engineer for water rights adjudications, and twenty percent of the money dedicated for water rights adjudications shall be allocated to the administrative office of the courts for the courts' costs associated with those adjudications.
[B.] C. Money in the water project fund may be used to make loans or grants to [qualified] qualifying entities for any qualifying water project [approved by the legislature] and for water rights adjudications.
[C.] D. The board may request the New Mexico finance authority [is authorized] to issue revenue bonds payable from the proceeds of loan repayments made into the water project fund upon a determination by the [authority] office that issuance of the bonds is necessary to replenish the principal balance of the fund. The net proceeds from the sale of the bonds shall be deposited in the water project fund. The bonds shall be authorized and issued by the New Mexico finance authority in accordance with the provisions of the New Mexico Finance Authority Act."
SECTION 13. Section 72-4A-9.1 NMSA 1978 (being Laws 2004, Chapter 85, Section 1) is amended to read:
"72-4A-9.1. ACEQUIA PROJECT FUND.--The "acequia project fund" is created in the state treasury. The fund shall consist of money appropriated, donated or otherwise accrued to the fund. The fund shall be administered by the [authority] office. Income from investment of money in the acequia project fund shall be credited to the fund. Balances in the fund at the end of any fiscal year shall not revert to [the general] any other fund. The acequia project fund may consist of such subaccounts as the [authority] office deems necessary to carry out the purposes of the fund. The [authority] office may establish procedures and adopt rules as required to administer the fund [and to recover from the fund costs of administering the fund]. Money in the acequia project fund may be used to make grants to acequias for any project approved by the [legislature] board."
SECTION 14. Section 72-4A-10 NMSA 1978 (being Laws 2001, Chapter 164, Section 10) is repealed and a new Section 72-4A-10 NMSA 1978 is enacted to read:
"72-4A-10. [NEW MATERIAL] PERIODIC AND ANNUAL REPORTS TO INTERIM COMMITTEES, THE LEGISLATURE AND THE GOVERNOR.--
A. The office shall make periodic reports to the appropriate interim committee that focuses on water issues and to the New Mexico finance authority oversight committee to keep them apprised of the work of the board and office. The board shall submit an annual report by December 1 of each year of the activities of the board and office to the legislature and the governor. The report to the legislature shall be filed with the legislative council service library and the legislative finance committee and provided to the chairs of the appropriate interim and standing committees of the legislature and to interested legislators and other interested persons.
B. The periodic and annual reports shall include:
(1) the current status of qualifying water projects;
(2) the progress of applications through the board's technical review process;
(3) how applications fit with the state water plan and the water capital plan;
(4) the number and kind of applications that did not meet threshold requirements and the reasons for their failure to meet the requirements;
(5) a breakdown of funding sources for priority-ranked water projects;
(6) a discussion of updates to the state water plan and the water capital plan; and
(7) other information requested by legislative committees or that the board deems of interest to the legislature or the governor.
C. The board shall request to present the annual report to appropriate standing committees of the legislature."
SECTION 15. 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; public recreational facilities; public transportation systems; 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, charter school, 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 water, drainage, irrigation or conservancy district or other special district created pursuant to law, nonprofit foundation or other support organization affiliated with a public university, college or other higher educational institution located in New Mexico, including a university research park corporation, 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 a consortium of any two or more qualified entities created pursuant to law; [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; and
H. "water project" means a project that meets federal and state requirements and is:
(1) for:
(a) storage, conveyance or delivery of water to end users;
(b) wastewater treatment, collection and disposal;
(c) recoverable water, including brackish water, produced water, gray water and wastewater reuse;
(d) implementation of federal Endangered Species Act of 1973 collaborative programs;
(e) restoration and management of watersheds;
(f) flood control; or
(g) water conservation or recycling, treatment or reuse; and
(2) a project for which the service area is wholly within the boundaries of the state or is determined by the water trust board to be an interstate water project that directly benefits New Mexico."
SECTION 16. Section 6-21-6.1 NMSA 1978 (being Laws 1994, Chapter 145, Section 2, as amended) is amended to read:
"6-21-6.1. PUBLIC PROJECT REVOLVING FUND--APPROPRIATIONS TO OTHER FUNDS.--
A. The authority and the department of environment may enter into a joint powers agreement pursuant to the Joint Powers Agreements Act for the purpose of describing and allocating duties and responsibilities with respect to creation of an integrated loan and grant program to be financed through issuance of bonds payable from the public project revolving fund. The bonds may be issued in installments or at one time by the authority in amounts authorized by law. The aggregate amount of bonds authorized and outstanding pursuant to this subsection shall not be greater than the amount of bonds that may be annually repaid from an amount not to exceed thirty-five percent of the governmental gross receipts tax proceeds distributed to the public project revolving fund in the preceding fiscal year. The net proceeds may be used for purposes of the [water and wastewater] local government planning fund and the water and wastewater project grant fund, as specified in the New Mexico Finance Authority Act and the Water Project Finance Act, or for purposes of the Wastewater Facility Construction Loan Act, the Rural Infrastructure Act, the Solid Waste Act or the Drinking Water State Revolving Loan Fund Act, as provided in the Water Project Finance Act.
B. Public projects funded pursuant to the Wastewater Facility Construction Loan Act, the Rural Infrastructure Act, the Solid Waste Act or the Drinking Water State Revolving Loan Fund Act shall not require specific authorization by law as required in Sections 6-21-6 and 6-21-8 NMSA 1978.
C. At the end of each fiscal year, after all debt service charges, replenishment of reserves and administrative costs on all outstanding bonds, notes or other obligations payable from the public project revolving fund are satisfied, an aggregate amount not to exceed thirty-five percent of the governmental gross receipts tax proceeds distributed to the public project revolving fund in the preceding fiscal year less all debt service charges and administrative costs of the authority paid in the preceding fiscal year on bonds issued pursuant to this section may be appropriated by the legislature from the public project revolving fund to the following funds for local infrastructure financing; provided that water projects have been priority ranked by the water trust board for the upcoming funding cycle:
(1) the wastewater facility construction loan fund for purposes of the Wastewater Facility Construction Loan Act;
(2) the rural infrastructure revolving loan fund for purposes of the Rural Infrastructure Act;
(3) the solid waste facility grant fund for purposes of the Solid Waste Act;
(4) the drinking water state revolving loan fund for purposes of the Drinking Water State Revolving Loan Fund Act;
(5) the water and wastewater project grant fund for purposes specified in the New Mexico Finance Authority Act; or
(6) the [water and wastewater] local government planning fund for purposes specified in the New Mexico Finance Authority Act.
D. The water trust board, the authority and the department of environment in coordination with the New Mexico finance authority oversight committee may recommend annually to each regular session of the legislature amounts to be appropriated to the funds listed in Subsection C of this section for local infrastructure financing."
SECTION 17. Section 6-21-6.3 NMSA 1978 (being Laws 1999, Chapter 186, Section 2, as amended) is amended to read:
"6-21-6.3. WATER AND WASTEWATER PROJECT GRANT FUND--CREATION--ADMINISTRATION--PURPOSES.--
A. There is created in the authority the "water and wastewater project grant fund", which shall be administered by the authority. The authority shall adopt, in accordance with the New Mexico Finance Authority Act, rules necessary to administer the fund.
B. The following shall be deposited directly into the water and wastewater project grant fund:
(1) the net proceeds from the sale of bonds issued pursuant to the provisions of Section 6-21-6.1 NMSA 1978 for the purposes of the water and wastewater project grant fund and payable from the public project revolving fund;
(2) money appropriated by the legislature to implement the provisions of this section; and
(3) any other public or private money dedicated to the fund.
C. Money in the water and wastewater project grant fund is appropriated to the authority to make grants to qualified entities for water or wastewater public projects [pursuant to specific authorization by law for each project] approved by the water trust board, as provided in the Water Project Finance Act, and to pay administrative costs of the water and wastewater project grant program.
D. The authority shall adopt rules governing the terms and conditions of grants made from the water and wastewater project grant fund. Except in the circumstances set forth in Subsection F of this section, grants may be made from the fund only with participation from the qualified entity in the form of a local match, which shall be determined by a sliding scale based on the qualified entity's financial capacity to pay a portion of the project from local resources. Grants from the water and wastewater project grant fund may be made only as all or part of financing for a complete project after the [authority] water trust board has determined that the financing for the complete project is cost effective.
E. The authority may make grants from the water and wastewater project grant fund to qualified entities for emergency public projects [without specific authorization by law] approved by the water trust board. Each emergency public project shall be designated as such by the authority prior to making the grant. The aggregate amount of grants for emergency public projects in fiscal years 2003, 2004 and 2005 shall not exceed six million dollars ($6,000,000) for each fiscal year. The aggregate amount of grants for emergency public projects in fiscal year 2006 and subsequent fiscal years shall not exceed three million dollars ($3,000,000) for each fiscal year.
F. To encourage consolidation of water or wastewater systems and to discourage proliferation of multiple water or wastewater systems, the authority may determine the local match requirement based on the financial capacity of:
(1) the residents of the geographic area benefitting from the improvements to be financed with the proceeds of the grant received on their behalf by the qualified entity; or
(2) the qualified entity benefitting from the improvements to be financed with the proceeds of the grant when the benefitting qualified entity agrees to consolidate with the qualified entity receiving the grant."
SECTION 18. Section 6-21-8 NMSA 1978 (being Laws 1992, Chapter 61, Section 8, as amended) is amended to read:
"6-21-8. PUBLIC PROJECT FINANCE PROGRAM--LOANS--PURCHASE OR SALE OF SECURITIES.--
A. To implement a program to assist qualified entities in financing public projects, the authority has the powers specified in this section; provided that the authority shall take no action concerning a project financed with money in the public project revolving fund unless the project is specifically authorized by law or by the water trust board in the case of water projects or authorized pursuant to other provisions of the New Mexico Finance Authority Act.
B. The application, evaluation and approval of water projects shall be as provided in the Water Project Finance Act, but the authority's power to provide financing for water projects through the public project finance program and an eligible entity's obligations for water project financing through the authority shall be as provided in this section and Section 6-21-9 NMSA 1978.
C. The authority may:
[A.] (1) make loans to qualified entities that establish one or more dedicated sources of revenue to repay the loan from the authority;
[B.] (2) make, enter into and enforce all contracts necessary, convenient or desirable for the purposes of the authority or pertaining to:
[(1)] (a) a loan to a qualified entity;
[(2)] (b) a grant to a qualified entity from money available to the authority except money in the public project revolving fund;
[(3)] (c) a purchase or sale of securities individually or on a pooled basis; or
[(4)] (d) the performance of its duties and execution of its powers under the New Mexico Finance Authority Act;
[C.] (3) purchase or hold securities at prices and in a manner the authority considers advisable, giving due consideration to the financial capability of the qualified entity, and sell securities acquired or held by it at prices without relation to cost and in a manner the authority considers advisable;
[D.] (4) prescribe the form of application or procedure required of a qualified entity for a loan or purchase of its securities, fix the terms and conditions of the loan or purchase and enter into agreements with qualified entities with respect to loans or purchases;
[E.] (5) charge for its costs and services in review or consideration of a proposed loan to a qualified entity or purchase by the authority of securities, whether or not the loan is made or the securities purchased;
[F.] (6) fix and establish terms and provisions with respect to:
[(1)] (a) a purchase of securities by the authority, including date and maturities of the securities;
[(2)] (b) redemption or payment before maturity; and
[(3)] (c) any other matters that in connection with the purchase are necessary, desirable or advisable in the judgment of the authority;
[G.] (7) to the extent permitted under its contracts with the holders of bonds of the authority, consent to modification of the rate of interest, time and payment of installment of principal or interest, security or any other term of a bond, contract or agreement of any kind to which the authority is a party;
[H.] (8) in connection with the purchase of any securities, consider the ability of the qualified entity to secure financing from other sources and the costs of that financing and the particular public project or purpose to be financed or refinanced with the proceeds of the securities to be purchased by the authority;
[I.] (9) acquire fee simple, leasehold, mortgagor's or mortgagee's interests in real and personal property and to sell, mortgage, convey or lease that property for authority purposes; and
[J.] (10) in the event of default by a qualified entity, enforce its rights by suit or mandamus or may use all other available remedies under state law."
SECTION 19. Section 6-21A-1 NMSA 1978 (being Laws 1997, Chapter 144, Section 1) is amended to read:
"6-21A-1. SHORT TITLE.--[Sections 1 through 9 of this act] Chapter 6, Article 21A NMSA 1978 may be cited as the "Drinking Water State Revolving Loan Fund Act"."
SECTION 20. Section 6-21A-3 NMSA 1978 (being Laws 1997, Chapter 144, Section 3, as amended) is amended to read:
"6-21A-3. DEFINITIONS.--As used in the Drinking Water State Revolving Loan Fund Act:
A. "authority" means the New Mexico finance authority;
B. "department" means the department of environment;
C. "drinking water facility construction project" means the acquisition, design, construction, improvement, expansion, repair or rehabilitation of all or part of any structure, facility or equipment necessary for a drinking water system or water supply system;
D. "drinking water supply facility" means any structure, facility or equipment necessary for a drinking water system or water supply system;
E. "financial assistance" means loans, the purchase or refinancing of debt obligation of a local authority at an interest rate that is less than or equal to the market interest rate in any case in which a debt obligation is incurred after July 1, 1993, loan guarantees, bond insurance or security for revenue bonds issued by the authority;
F. "fund" means the drinking water state revolving loan fund;
G. "local authority" means any municipality, county, incorporated county, sanitation district, water and sanitation district or any similar district, public or private water cooperative or association or any similar organization, public or private community water system or nonprofit noncommunity water system or any other agency created pursuant to a joint powers agreement acting on behalf of any entity listed in this subsection with a publicly owned drinking water system or water supply system that qualifies as a community water system or nonprofit noncommunity system as defined by the Safe Drinking Water Act. "Local authority" does not include systems owned by federal agencies;
H. "operate and maintain" means to perform all necessary activities, including the replacement of equipment or appurtenances, to assure the dependable and economical function of a drinking water facility in accordance with its intended purpose; [and]
I. "Safe Drinking Water Act" means the federal Safe Drinking Water Act as amended in 1996 and its subsequent amendments or successor provisions; and
J. "technical review team" means the team of state agencies and other entities, including the authority, that review drinking water facility construction projects for priority ranking for funding purposes pursuant to the Water Project Finance Act."
SECTION 21. Section 6-21A-4 NMSA 1978 (being Laws 1997, Chapter 144, Section 4, as amended) is amended to read:
"6-21A-4. FUND CREATED--ADMINISTRATION.--
A. There is created in the authority a revolving loan fund to be known as the "drinking water state revolving loan fund", which shall be administered by the authority. The authority is authorized to establish procedures required to administer the fund in accordance with the Safe Drinking Water Act and state laws. [The authority and the department shall, whenever possible, 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 Drinking Water State Revolving Loan Fund Act or to provide state matching funds that are required by the terms of any federal grant under the Safe Drinking Water Act;
(3) loan principal, interest and penalty payments if required by the terms of any federal grant under the Safe Drinking Water Act;
(4) any other public or private money dedicated to the fund; and
(5) revenue transferred from other state revolving funds.
C. Money in the fund is appropriated for expenditure by the authority in a manner consistent with the terms and conditions of the federal capitalization grants and the Safe Drinking Water Act and may be used:
(1) to provide loans for the construction or rehabilitation of drinking water facilities;
(2) to buy or refinance the debt obligation of a local authority at an interest rate that is less than or equal to the market interest rate in any case in which a debt obligation is incurred after July 1, 1993;
(3) to guarantee or purchase insurance for obligations of local authorities to improve credit market access or reduce interest rates;
(4) to provide loan guarantees for similar revolving funds established by local authorities; and
(5) to provide a source of revenue or security for the repayment of principal and interest on bonds issued by the authority if the proceeds of the bonds are deposited in the fund or if the proceeds of the bonds are used to make loans to local authorities to the extent provided in the terms of the federal grant.
D. If needed to cover administrative expenses, pursuant to procedures established by the authority, the authority may impose and collect a fee from each local authority that receives financial assistance from the fund, which fee shall be used solely for the costs of administering the fund and which fee shall be kept outside the fund.
E. Money not currently needed for the operation of the fund or otherwise dedicated may be invested pursuant to the New Mexico Finance Authority Act and all interest earned on such investments shall be credited to the fund. Money remaining in the fund at the end of the fiscal year shall not revert to the general fund but shall accrue to the credit of the fund.
F. The authority shall maintain full authority for the operation of the fund in accordance with applicable federal and state law, including, in cooperation with the department, ensuring the loan recipients are on the [state] water trust board's priority ranking list [or] and otherwise satisfy the Safe Drinking Water Act requirements.
G. The authority shall establish fiscal controls and accounting procedures that are sufficient to assure proper accounting for fund payments, disbursements and balances and shall provide, in cooperation with the department, a biannual report and an annual independent audit on the fund to the governor and to the United States environmental protection agency as required by the Safe Drinking Water Act."
SECTION 22. Section 6-21A-5 NMSA 1978 (being Laws 1997, Chapter 144, Section 5) is amended to read:
"6-21A-5. LOAN PROGRAM--ADMINISTRATION.--
A. The authority shall establish a program to provide financial assistance from the fund to local authorities, individually or jointly, for acquisition, construction or modification of drinking water facilities. The authority is authorized to enter into memoranda of understanding, contracts and other agreements to carry out the provisions of the Drinking Water State Revolving Loan Fund Act, including but not limited to memoranda of understanding, contracts and agreements with federal agencies, the department, the water trust board, local authorities and other parties.
B. The department shall [adopt, by regulation, a system for the] use the water trust board's priority ranking of drinking water facility construction projects requesting financial assistance [and for the development of a priority list], which will be part of the annual intended use plan, as required by the Safe Drinking Water Act.
C. The department shall adopt [regulations] rules or internal procedures addressing the mechanism for the preparation of the annual intended use plan and the content of [such] the plan and shall prepare [such] the plan, with the assistance of the water trust board and the authority, as required by the Safe Drinking Water Act and the capitalization grant agreement. The [department] technical review team shall review all proposals for drinking water facility construction projects, including but not limited to project plans and specifications for compliance with the requirements of the Safe Drinking Water Act and the requirements of state laws and [regulations] rules governing the construction and operation of drinking water supply facilities. The [department] technical review team also shall determine whether a local authority has demonstrated adequate technical and managerial capability to operate the drinking water supply facility for its useful life in compliance with the requirements of the Safe Drinking Water Act and with the requirements of state laws and [regulations] rules governing the operation of drinking water supply facilities.
D. The department and the authority shall enter into an agreement for the purpose of describing and allocating duties and responsibilities with respect to monitoring the construction of drinking water facility construction projects that have been provided financial assistance pursuant to the provisions of the Drinking Water State Revolving Loan Fund Act to ensure compliance with the requirements of the Safe Drinking Water Act and with the requirements of state laws and [regulations] rules governing construction and operation of drinking water supply facilities.
E. The department shall adopt [regulations] rules or internal procedures that do not conflict with the Water Project Finance Act establishing the criteria and method for the distribution of annual capitalization grant funds between the fund and the nonproject activities (set-asides) allowed by the Safe Drinking Water Act and for the description in the intended use plan and annual report of the financial programmatic status of the nonproject activities (set-asides) allowed by the Safe Drinking Water Act.
F. The authority, with the assistance of the department and the water trust board, shall establish procedures to identify affordability criteria for a disadvantaged community and to extend a program to assist such communities.
G. The department shall set up separate accounts outside the fund to use for nonproject activities (set-asides) [activities] authorized under the Safe Drinking Water Act, Sections 1452 (g) and 1452 (k), and the authority shall set up a separate account outside the fund for administration of the fund. The department shall also provide the additional match for Safe Drinking Water Act, Section 1452 (g) (2) activities. H. In consultation with the water trust board, the department shall prepare and submit applications for capitalization grants to the United States environmental protection agency as required by the Safe Drinking Water Act."
SECTION 23. Section 6-21A-6 NMSA 1978 (being Laws 1997, Chapter 144, Section 6) is amended to read:
"6-21A-6. FINANCIAL ASSISTANCE--CRITERIA.--
A. Financial assistance shall be provided only to local authorities that:
(1) meet the requirements for financial capability set by the water trust board and the authority to assure sufficient revenues to operate and maintain the drinking water facility for its useful life and to repay the financial assistance;
(2) appear on the priority list for the fund, developed and maintained by the [department] water trust board, regardless of rank on such list;
(3) are considered by the water trust board, the authority and the department ready to proceed with the project;
(4) demonstrate adequate technical and managerial capability to operate the drinking water facility for its useful life; and
(5) meet other requirements established by the water trust board, the authority and state laws, including but not limited to procurement, recordkeeping and accounting.
B. Loans from the fund shall be made by the authority only to local authorities that establish one or more dedicated sources of revenue to repay the money received from the fund and to provide for operation, maintenance and equipment replacement expenses of the drinking water facility proposed for funding.
C. The authority, with assistance from the department and the water trust board, shall establish procedures addressing methods to provide financial assistance to local authorities in accordance with the criteria set forth in the Safe Drinking Water Act, Section 1452 (a) (3).
D. Each loan made by the authority shall provide that repayment of the loan shall begin not later than one year after completion of construction of the drinking water facility for which the loan was made and shall be repaid in full no later than twenty years after completion of the construction, except in the case of a disadvantaged community [in which case]. The authority may extend the term of the loan to a disadvantaged community, as long as the extended term:
(1) terminates not later than the date that is thirty years after the date of project completion; and
(2) does not exceed the expected design life of the project.
E. Financial assistance may be made with an annual interest rate [which] that is less than a market rate as determined by procedures established by the authority and reported annually in the intended use plan prepared by the department, with the assistance of the authority and the water trust board.
F. Financial assistance pursuant to the Drinking Water State Revolving Loan Fund Act shall not be given to a local authority if the technical review team, the water trust board or the authority determines that the financial assistance is for a drinking water facility to be constructed in fulfillment or partial fulfillment of requirements made of a subdivider under the provisions of the Land Subdivision Act or the New Mexico Subdivision Act.
G. Financial assistance may be made to local authorities that employ or contract with a registered professional engineer to provide and be responsible for engineering services on the drinking water facility. Such services, if the water trust board and the authority determines such services are needed, may include but are not limited to an engineering report, facility plans, environmental evaluations, construction contract documents, supervision of construction and start-up services.
H. Financial assistance shall be made only for eligible items as described by authority procedures and as identified pursuant to the federal Safe Drinking Water Act."
SECTION 24. Section 6-29-1 NMSA 1978 (being Laws 2005, Chapter 146, Section 1) is amended to read:
"6-29-1. SHORT TITLE.--[This act] Chapter 6, Article 29 NMSA 1978 may be cited as the "Tribal Infrastructure Act"."
SECTION 25. Section 6-29-3 NMSA 1978 (being Laws 2005, Chapter 146, Section 3) is amended to read:
"6-29-3. DEFINITIONS.--As used in the Tribal Infrastructure Act:
A. "board" means the tribal infrastructure board;
B. "department" means the Indian affairs department;
C. "financial assistance" means providing grants or loans on terms and conditions approved by the board;
D. "governor" means the governor of New Mexico;
E. "project fund" means the tribal infrastructure project fund;
F. "qualified project" means a tribal infrastructure project selected by the board for financial assistance pursuant to the Tribal Infrastructure Act;
G. "tribe" means a federally recognized Indian nation, tribe or pueblo located wholly or partially in New Mexico or any of its governmental entities or subdivisions; [and]
H. "trust fund" means the tribal infrastructure trust fund; and
I. "water project" means a project that meets federal and state requirements and is:
(1) for:
(a) storage, conveyance or delivery of water to end users;
(b) wastewater treatment, collection and disposal;
(c) recoverable water, including brackish water, produced water, gray water and wastewater reuse;
(d) implementation of federal Endangered Species Act of 1973 collaborative programs;
(e) restoration and management of watersheds;
(f) flood control; or
(g) water conservation or recycling, treatment or reuse; and
(2) a project for which the service area is wholly within the boundaries of the state or is determined by the water trust board to be an interstate water project that directly benefits New Mexico."
SECTION 26. Section 6-29-5 NMSA 1978 (being Laws 2005, Chapter 146, Section 5) is amended to read:
"6-29-5. BOARD--DUTIES.--
A. Except as provided in Subsection B of this section, the board shall:
[A.] (1) adopt rules governing terms, conditions and priorities for providing financial assistance to tribes, including developing application and evaluation procedures and forms and qualifications for applicants and for projects;
[B.] (2) provide financial assistance to tribes for qualified projects on terms and conditions established by the board; and
[C.] (3) authorize funding for qualified projects, including:
[(1)] (a) planning, designing, constructing, improving, expanding or equipping water and wastewater facilities, major water systems, electrical power lines, communications infrastructure, roads, health infrastructure, emergency response facilities and infrastructure needed to encourage economic development;
[(2)] (b) developing engineering feasibility reports for infrastructure projects;
[(3)] (c) inspecting construction of qualified projects;
[(4)] (d) providing special engineering services;
[(5)] (e) completing environmental assessments or archaeological clearances and other surveys for infrastructure projects;
[(6)] (f) acquiring land, easements or rights of way; and
[(7)] (g) paying legal costs and fiscal agent fees associated with development of qualified projects.
B. All applications for water project funding shall be submitted to the water trust board pursuant to the Water Project Finance Act. After a water project application that relates to tribal land has been evaluated and priority ranked by the water trust board, its recommendation on the water project, including loans or grants from the project fund, shall be submitted to the tribal infrastructure board for its approval or rejection of the water trust board's funding request. If the tribal infrastructure board rejects the water trust board's recommendation for funding from the project fund, the water project may be denied by the water trust board."
SECTION 27. Section 6-29-7 NMSA 1978 (being Laws 2005, Chapter 146, Section 7) is amended to read:
"6-29-7. TRIBAL INFRASTRUCTURE PROJECT FUND--
CREATED--PURPOSE--APPROPRIATIONS.--
A. The "tribal infrastructure project fund" is created in the state treasury and:
(1) the department of finance and administration shall administer the project fund;
(2) the project fund shall consist of: (a) distributions made to it from the trust fund;
(b) payments of principal and interest on loans for qualified projects;
(c) other money appropriated by the legislature or distributed or otherwise allocated to the project fund for the purpose of supporting qualified projects; and
(d) income from investment of the money in the project fund that shall be credited to the project fund;
(3) balances in the project fund at the end of a fiscal year shall not revert to the trust fund or to the general fund; and
(4) the project fund may consist of subaccounts as determined to be necessary by the department of finance and administration.
B. The department of finance and administration may establish procedures and adopt rules as required to administer the project fund and to originate grants or loans for qualified projects approved by the board.
C. Beginning in fiscal year 2006 and in subsequent years, the lesser of one percent of the project fund or one hundred thousand dollars ($100,000) is appropriated from the project fund to the department of finance and administration for expenditure in the fiscal year in which it is appropriated, to administer the project fund. Any unexpended or unencumbered balance remaining at the end of any fiscal year shall revert to the project fund.
D. Beginning in fiscal year 2006 and in each subsequent year, the lesser of five percent of the project fund or five hundred thousand dollars ($500,000) is appropriated from the project fund to the Indian affairs department for expenditure in the fiscal year in which it is appropriated to administer the Tribal Infrastructure Act, to pay per diem and mileage as required by that act and for operation of the board. Any unexpended or unencumbered balance remaining at the end of any fiscal year shall revert to the project fund.
E. The balance in the project fund not otherwise appropriated in this section is appropriated to the department of finance and administration for expenditure in fiscal year 2006 and in subsequent fiscal years to carry out the provisions of the Tribal Infrastructure Act by providing grants or loans for qualified projects; provided that in fiscal year 2015 and subsequent fiscal years, grants or loans for water projects shall not be provided unless evaluated, approved and priority ranked by the water trust board. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall revert to the project fund."
SECTION 28. Section 6-30-1 NMSA 1978 (being Laws 2010, Chapter 10, Section 1) is amended to read:
"6-30-1. SHORT TITLE.--[Sections 1 through 8 of this act] Chapter 6, Article 30 NMSA 1978 may be cited as the "Colonias Infrastructure Act"."
SECTION 29. Section 6-30-3 NMSA 1978 (being Laws 2010, Chapter 10, Section 3) is amended to read:
"6-30-3. DEFINITIONS.--As used in the Colonias Infrastructure Act:
A. "authority" means the New Mexico finance authority;
B. "board" means the colonias infrastructure board;
C. "colonia" means a rural community with a population of twenty-five thousand or less located within one hundred fifty miles of the United States-Mexico border that:
(1) has been designated as a colonia by the municipality or county in which it is located because of a:
(a) lack of potable water supply;
(b) lack of adequate sewage systems; or
(c) lack of decent, safe and sanitary housing;
(2) has been in existence as a colonia prior to November 1990; and
(3) has submitted appropriate documentation to the board to substantiate the conditions of this subsection, including documentation that supports the designation of the municipality or county;
D. "financial assistance" means providing grants or loans on terms and conditions approved by the authority;
E. "project fund" means the colonias infrastructure project fund;
F. "qualified entity" means a county, municipality or other entity recognized as a political subdivision of the state;
G. "qualified project" means a capital outlay project selected by the board for financial assistance that is primarily intended to develop colonias infrastructure. A qualified project may include a water system, a wastewater system, solid waste disposal facilities, flood and drainage control, roads or housing infrastructure; but "qualified project" does not include general operation and maintenance, equipment, housing allowance payments or mortgage subsidies; [and]
H. "trust fund" means the colonias infrastructure trust fund; and
I. "water project" means a project that meets federal and state requirements and is:
(1) for:
(a) storage, conveyance or delivery of water to end users;
(b) wastewater treatment, collection and disposal;
(c) recoverable water, including brackish water, produced water, gray water and wastewater reuse;
(d) implementation of federal Endangered Species Act of 1973 collaborative programs;
(e) restoration and management of watersheds;
(f) flood control; or
(g) water conservation or recycling, treatment or reuse; and
(2) a project for which the service area is wholly within the boundaries of the state or is determined by the water trust board to be an interstate water project that directly benefits New Mexico."
SECTION 30. Section 6-30-5 NMSA 1978 (being Laws 2010, Chapter 10, Section 5) is amended to read:
"6-30-5. BOARD--DUTIES.--
A. Except as provided in Subsection B of this section, the board shall:
[A.] (1) promulgate such rules as are necessary to govern the acceptance, evaluation and prioritization of applications submitted by qualified entities for financial assistance;
[B.] (2) after applications have been processed and evaluated by the authority, prioritize the qualified projects for financial assistance; and
[C.] (3) upon such terms and conditions as are established by the authority, recommend the prioritized projects to the authority for financial assistance for:
[(1)] (a) planning, designing, constructing, improving or expanding a qualified project;
[(2)] (b) developing engineering feasibility reports for qualified projects;
[(3)] (c) inspecting construction of qualified projects;
[(4)] (d) providing professional services;
[(5)] (e) completing environmental assessments or archaeological clearances and other surveys for qualified projects;
[(6)] (f) acquiring land, water rights, easements or rights of way; or
[(7)] (g) paying legal costs and fiscal agent fees associated with development of qualified projects.
B. All applications for water project funding shall be submitted to the water trust board pursuant to the Water Project Finance Act. After a water project application that relates to a colonia has been evaluated and priority ranked by the water trust board, its recommendation on the water project, including loans or grants from the project fund, shall be submitted to the colonias infrastructure board for its approval or rejection of the water trust board's funding request. If the colonias infrastructure board rejects the water trust board's recommendation for funding from the project fund, the water project may be denied by the water trust board."
SECTION 31. Section 6-30-6 NMSA 1978 (being Laws 2010, Chapter 10, Section 6) is amended to read:
"6-30-6. AUTHORITY--DUTIES.--The authority shall:
A. provide staff support to the board;
B. administer the project fund;
C. at the direction of the board, process, review and evaluate applications for financial assistance from qualified entities except applications for water projects; and
D. at the direction of the board, administer qualified projects that receive financial assistance."
SECTION 32. Section 6-30-8 NMSA 1978 (being Laws 2010, Chapter 10, Section 8) is amended to read:
"6-30-8. COLONIAS INFRASTRUCTURE PROJECT FUND-- CREATED--PURPOSE--APPROPRIATIONS.--
A. The "colonias infrastructure project fund" is created in the authority and shall be administered by the authority.
B. The project fund shall consist of:
(1) distributions from the trust fund;
(2) payments of principal and interest on loans for qualified projects;
(3) other money appropriated by the legislature or distributed or otherwise allocated to the project fund for the purpose of supporting qualified projects;
(4) the proceeds of severance tax bonds appropriated to the fund for qualified projects; and
(5) income from investment of the project fund that shall be credited to the project fund.
C. Except for severance tax bond proceeds required to revert to the severance tax bonding fund, balances in the project fund at the end of a fiscal year shall not revert to any other fund.
D. The project fund may consist of subaccounts as determined to be necessary by the authority.
E. The authority may establish procedures and adopt rules as required to:
(1) administer the project fund;
(2) originate grants or loans for qualified projects recommended by the board;
(3) recover from the project fund the costs of administering the fund and originating the grants and loans; and
(4) except for water projects, govern the process through which qualified entities may apply for financial assistance from the project fund."
SECTION 33. Section 7-27-10.1 NMSA 1978 (being Laws 2003, Chapter 134, Section 1, as amended) is amended to read:
"7-27-10.1. BONDING CAPACITY--AUTHORIZATION FOR SEVERANCE TAX BONDS--PRIORITY FOR WATER PROJECTS AND TRIBAL INFRASTRUCTURE PROJECTS.--
A. By January 15 of each year, the board of finance division of the department of finance and administration shall estimate the amount of bonding capacity available for severance tax bonds to be authorized by the legislature.
B. The division shall allocate ten percent of the estimated bonding capacity each year for water projects, and the legislature authorizes the state board of finance to issue severance tax bonds in the annually allocated amount for use by the water trust board to fund water projects statewide, except for projects authorized in Subsection E of this section. The water trust board shall certify to the state board of finance the need for issuance of bonds for water projects. The state board of finance may issue and sell the bonds in the same manner as other severance tax bonds in an amount not to exceed the authorized amount provided for in this subsection. If necessary, the state board of finance shall take the appropriate steps to comply with the federal Internal Revenue Code of 1986, as amended. Proceeds from the sale of the bonds are appropriated to the water project fund [in the New Mexico finance authority] for the purposes certified by the water trust board to the state board of finance.
C. The board of finance division shall allocate five percent of the estimated bonding capacity each year for tribal infrastructure projects, and the legislature authorizes the state board of finance to issue severance tax bonds in the annually allocated amount for use by the tribal infrastructure board to fund tribal infrastructure projects. The tribal infrastructure board shall certify to the state board of finance the need for issuance of bonds for tribal infrastructure projects. The state board of finance may issue and sell the bonds in the same manner as other severance tax bonds in an amount not to exceed the authorized amount provided for in this subsection. If necessary, the state board of finance shall take the appropriate steps to comply with the federal Internal Revenue Code of 1986, as amended. Proceeds from the sale of the bonds are appropriated to the tribal infrastructure project fund for the purposes certified by the tribal infrastructure board to the state board of finance.
D. Money from the severance tax bonds provided for in this section shall not be used to pay indirect project costs. Any unexpended balance from proceeds of severance tax bonds issued for a water project or a tribal infrastructure project shall revert to the severance tax bonding fund within six months of completion of the project. The [New Mexico finance authority] water trust board shall monitor and ensure proper reversions of the bond proceeds appropriated for water projects, and the department of finance and administration shall monitor and ensure proper reversions of the bond proceeds appropriated for tribal infrastructure projects.
E. The board of finance division of the department of finance and administration shall:
(1) void the authorization to the water project fund held at the New Mexico finance authority to make grants or loans of severance tax bond proceeds for projects pursuant to Subsection U of Section 1 of Chapter 41 of Laws 2006 for the northwest New Mexico council of governments in McKinley county for a water distribution project and Subsection 25 of Section 1 of Chapter 139 of Laws 2007 for the Navajo Nation division of natural resources department of water resources water management branch for a regional water project in Rio Arriba, Sandoval, McKinley, San Juan and Cibola counties; and
(2) authorize the department of environment to make a grant of the unexpended proceeds of severance tax bonds issued in fiscal years 2006 and 2007 for the purposes of the water project fund to be used for the authorizations identified in Paragraph (1) of this subsection and appropriate to the department of environment five million three hundred seventy-five thousand two hundred forty-four dollars ($5,375,244) for the Navajo Nation division of natural resources department of water resources water management branch for a regional water distribution project in Rio Arriba, Sandoval, McKinley, San Juan and Cibola counties. Any unexpended balance of the funds authorized for expenditure in this section shall revert to the severance tax bonding fund at the end of fiscal year 2013 or upon completion of the project, whichever is earlier.
F. As used in this section:
(1) "tribal infrastructure project" means a qualified project under the Tribal Infrastructure Act; and
(2) "water project" means a [capital outlay project for:
(a) the storage, conveyance or delivery of water to end users;
(b) the implementation of federal Endangered Species Act of 1973 collaborative programs;
(c) the restoration and management of watersheds;
(d) flood prevention; or
(e) conservation, recycling, treatment or reuse of water] project that meets federal and state requirements and is:
(a) for: 1) storage, conveyance or delivery of water to end users; 2) wastewater treatment, collection and disposal; 3) recoverable water, including brackish water, produced water, gray water and wastewater reuse; 4) implementation of federal Endangered Species Act of 1973 collaborative programs; 5) restoration and management of watersheds; 6) flood control; or 7) water conservation or recycling, treatment or reuse; and
(b) a project for which the service area is wholly within the boundaries of the state or is determined by the water trust board to be an interstate water project that directly benefits New Mexico."
SECTION 34. Section 11-6-3 NMSA 1978 (being Laws 1977, Chapter 299, Section 3, as amended) is amended to read:
"11-6-3. DEFINITIONS.--As used in the New Mexico Community Assistance Act:
A. "council" means the New Mexico community development council;
B. "project" means, except as limited by the [state] constitution of New Mexico, the purchase, construction, lease, gift, grant, reconstruction, improvement, option to purchase or other acquisition of educational, cultural, recreational, community, municipal, social service or other facilities by a political subdivision, including but not limited to publicly owned water systems, sewer systems, municipal utilities, roads, streets, highways, curbs, gutters, sidewalks, storm sewers, street lighting, traffic control devices, parking facilities, vocational training and rehabilitation facilities, airports, hospitals, nursing homes, publicly owned mental health, alcohol and drug abuse, child abuse and family counseling facilities, juvenile detention homes, swimming pools, parks, auditoriums, public buildings, libraries, fire and police stations, jails, waste disposal systems and sites, special assessment district improvements and all necessary real and personal property therefor, but does not include facilities for the public schools;
C. "community assistance program" means a program to assist political subdivisions with infrastructure development, which may include but is not limited to:
(1) a grant or loan of funds to the political subdivisions;
(2) gathering data about the political subdivisions;
(3) providing technical assistance to analyze the needs and seek solutions to problems related to infrastructure development in political subdivisions; and
(4) providing technical assistance in seeking funds from sources other than the council;
D. "division" means the local government division of the department of finance and administration; [and]
E. "political subdivision" means any county; incorporated city, town or village; drainage, conservancy, irrigation, water and sanitation or other district; mutual domestic association; public water cooperative association; or community ditch association; and
F. "water project" means a project that meets federal and state requirements and is:
(1) for:
(a) storage, conveyance or delivery of water to end users;
(b) wastewater treatment, collection and disposal;
(c) recoverable water, including brackish water, produced water, gray water and wastewater reuse;
(d) implementation of federal Endangered Species Act of 1973 collaborative programs;
(e) restoration and management of watersheds;
(f) flood control; or
(g) water conservation or recycling, treatment or reuse; and
(2) a project for which the service area is wholly within the boundaries of the state or is determined by the water trust board to be an interstate water project that directly benefits New Mexico."
SECTION 35. Section 11-6-4.1 NMSA 1978 (being Laws 1981 (1st S.S.), Chapter 11, Section 3, as amended) is amended to read:
"11-6-4.1. [REGULATIONS] RULES.--
A. The council, after public hearing, shall adopt [regulations] rules to provide for:
(1) procedures and forms for making grants under the New Mexico Community Assistance Act;
(2) documentation to be provided by the proposed grantee to justify the need for the community assistance program;
(3) procedures for review, evaluation and approval of grants;
(4) procedures for reporting by the grantee of programmatic, organizational and financial information necessary to the review, evaluation and approval of a proposed or existing grant to be funded or [which] that is funded by the council;
(5) a guide for the evaluation of the ability and competence of a proposed or existing grantee to efficiently and adequately provide for the completion of the project;
(6) development and phase-in of a common application form and funding cycle insofar as practical for all state and federal grant or loan programs for local community infrastructure development administered or coordinated by the division;
(7) procedures for the coordination and handling of applications for all state and federal grant or loan programs administered and coordinated by the division; provided that water projects shall follow the procedures specified in the Water Project Finance Act;
(8) procedures to control the number of applications from each political subdivision; and
(9) such other requirements deemed necessary by the council to ensure that the state receives the services for which the legislature appropriated money.
B. [Regulations] Rules adopted by the council shall become effective when filed according to the provisions of the State Rules Act."
SECTION 36. Section 11-6-5.1 NMSA 1978 (being Laws 1984, Chapter 5, Section 7) is amended to read:
"11-6-5.1. POWERS AND DUTIES OF THE DIVISION.--The division, in accordance with [regulations] rules adopted pursuant to Section 11-6-4.1 NMSA 1978, shall have the power and duty to:
A. act as a clearinghouse, provide coordination and handle applications for all state and federal grant or loan programs for local community infrastructure development, except water projects, which shall be applied for, coordinated and ranked as provided in the Water Project Finance Act;
B. develop and adopt, insofar as possible, a common application form and funding cycle for [all] state and federal grant or loan programs for local community infrastructure development, including but not limited to programs under the New Mexico Community Assistance Act, the [Water Supply Construction] Rural Infrastructure Act, the development fund, any state or federal solid waste management program [the federal wastewater treatment construction grants program, any state wastewater treatment construction grant or loan programs] and federal community development block grant funds; provided that water projects eligible for local community infrastructure development funding shall be those priority-ranked projects approved by the water trust board;
[C. forward all applications for federal wastewater treatment construction grants to the water quality control commission or its designated constituent agency within five working days of receipt; provided that the water quality control commission and its designated constituent agency shall have authority for the administration of federal wastewater treatment construction grant funds, including determining eligibility of grant applicants, establishing priority systems and priority lists for grant applicants, technically reviewing grant applications and approving or denying grant applications;
D.] C. administer federal community development block grant funds and all other federal and state grant or loan programs for local community infrastructure development for which the council has oversight responsibility or where such administration is not otherwise provided for by law; [and
E.] D. make and enter into all contracts and agreements necessary or incident to its duties and the execution of its powers under the New Mexico Community Assistance Act; and
E. participate as required by the Water Project Finance Act on technical review teams to evaluate local water infrastructure applications and make recommendations to the water trust board on priority ranking of applications, with their proposed funding packages."
SECTION 37. Section 11-6-6 NMSA 1978 (being Laws 1977, Chapter 299, Section 6, as amended) is amended to read:
"11-6-6. COMMUNITY ASSISTANCE APPLICATION REQUIREMENTS.--
A. A political subdivision desiring a grant of funds from the council for projects other than water projects shall file an application for a grant of funds with the council, which shall contain at least the following:
(1) a general description of the proposed project and a general description of related existing facilities, if any;
(2) a general description of all real estate, if any, necessary for the proposed project;
(3) preliminary plans and other documents necessary to show the type, structure and general character of the proposed project;
(4) estimates of cost of the proposed project;
(5) a general description and statement of value of any property, real or personal, of the political subdivision applied or to be applied to the proposed project;
(6) a statement of cash funds previously applied or currently held by or on behalf of the political subdivision [which] that are available for and are to be applied to the proposed project;
(7) evidence of the arrangement made by the political subdivision for the financing of all costs of the proposed project in excess of the requested assistance from the council;
(8) evidence that the political subdivision has the organizational and technical competence to [utilize] use the requested funds efficiently; and
(9) evidence that the political subdivision can properly operate and maintain the facility to be constructed for its useful life.
B. After receipt of an application for a grant of funds, the division shall provide copies of the application to appropriate state agencies, [who] which shall have fifteen working days to review the application and communicate their comments to the council. The division shall also review all applications and submit its recommendations to the council. In deciding whether [or not] to approve assistance funds, the council except as provided by applicable federal law shall consider, but is not limited to:
(1) the health and safety of the residents to be served by the proposed project;
(2) the needs of other political subdivisions for infrastructure development funding; and
(3) other sources of funds available to the political subdivision to fund the proposed project.
C. All action shall be taken by vote of a majority of the members of the council.
D. The division shall, upon a decision by the council to approve assistance funds to a political subdivision, notify all appropriate state agencies of the project and request that they monitor it to assure that all statutes and rules [and regulations] are compiled with and that standards are maintained."
SECTION 38. Section 11-6-6.1 NMSA 1978 (being Laws 1979, Chapter 166, Section 4, as amended) is amended to read:
"11-6-6.1. REQUIREMENTS.--
A. No project [which] that will result in increased demand for water in the area of the project shall be recommended for approval by the council until the water trust board has certified to the council [is satisfied] that the political subdivision either holds or can acquire water rights sufficient to meet the increase in demand. Nothing in this subsection shall be construed to require any political subdivision to submit information in an application under Section 11-6-6 NMSA 1978, which information would not be required under that section.
B. The council shall not approve a grant of funds for any political subdivision unless the council is satisfied that the political subdivision has taken all reasonable steps to use other sources of funding.
C. Of the grants made in any one fiscal year, at least fifteen percent of the dollar amount shall be made to counties with populations of less than fifteen thousand and other political subdivisions with populations of less than three thousand or on behalf of areas with populations of less than three thousand. For such grants, regardless of funding source, the council may, if it finds such to be in the public interest, waive any requirements to use other sources of funding.
D. No grant in excess of five hundred thousand dollars ($500,000) for any one project shall be made to a political subdivision in any one fiscal year; provided that this maximum does not apply to state funds for matching federal wastewater treatment facility construction grants.
E. In making grants from state funds that are not limited to a particular type of project, the council shall give priority to the needs of political subdivisions [impacted] affected either by rapid growth or loss of tax base."
SECTION 39. Section 74-6A-4 NMSA 1978 (being Laws 1991, Chapter 172, Section 4, as amended) is amended to read:
"74-6A-4. WASTEWATER FACILITY CONSTRUCTION LOAN 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] rules as required to administer the fund in accordance with the Clean Water Act and state law. Any [regulations] rules 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, 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 the Water Project Finance Act and may be used:
(1) to provide loans for the construction or rehabilitation of wastewater facilities;
(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 Water Act grant program and state law.
D. Pursuant to [regulations] rules 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] and shall prepare the annual intended use plan and [ensuring] ensure that loan recipients are on the [state] water trust board's priority list [or otherwise] and 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 independent audit on the fund to the governor and to the United States environmental protection agency as required by the Clean Water Act."
SECTION 40. Section 74-6A-7 NMSA 1978 (being Laws 1991, Chapter 172, Section 5) is amended to read:
"74-6A-7. LOAN PROGRAM--ADMINISTRATION.--[A.] The division shall establish a program to provide financial assistance to local authorities, individually or jointly, for acquisition, construction or modification of wastewater facilities. The division as agent of the commission is authorized to enter into contracts and other agreements with federal agencies, local authorities and other parties to carry out the provisions of the Wastewater Facility Loan Construction Act [including but not limited to contracts and agreements with federal agencies, local authorities and other parties.
B. The commission shall adopt a system for the ranking of wastewater facility construction projects for financial assistance]."
SECTION 41. Section 74-6A-8 NMSA 1978 (being Laws 1991, Chapter 172, Section 6) is amended to read:
"74-6A-8. FINANCIAL ASSISTANCE--CRITERIA.--
A. Financial assistance shall be provided only to local authorities that:
(1) meet the requirements for financial capability set by the [division] water trust board to assure sufficient revenues to operate and maintain the wastewater facility for its useful life and to repay the financial assistance;
(2) agree to operate and maintain the wastewater facility so that the facility will function properly over its structural and material design life;
(3) agree to maintain separate project accounts, to maintain project accounts properly in accordance with generally accepted governmental accounting standards and to conduct an audit of the project's financial records;
(4) provide a written assurance, signed by an attorney, that the local authority has or will acquire proper title, easements and rights of way to the property upon or through which the wastewater facility proposed for funding is to be constructed or extended;
(5) require the contractor of the wastewater facility construction project to post a performance and payment bond in accordance with the requirements of Section 13-4-18 NMSA 1978 and its subsequent amendments and successor provisions;
(6) provide a written notice of completion and start of operation of the wastewater facility;
(7) appear on the water trust board's priority ranking list [of the fund, regardless of rank on such list]; and
(8) provide such information to the division as required by the commission in order to comply with the provisions of the Clean Water Act and state law.
B. Loans shall be made only to local authorities that establish one or more dedicated sources of revenue to repay the money received from the commission and to provide for operation, maintenance and equipment replacement expenses. A local authority, any existing statute to the contrary notwithstanding, may do any of the following:
(1) obligate itself to pay to the commission at periodic intervals a sum sufficient to provide all or any part of bond debt service with respect to the bonds recommended by the commission and issued by the board to fund the loan for the wastewater facility project of the local authority and pay over the debt service to the account of the wastewater facility project for deposit to the fund;
(2) fulfill any obligation to pay the commission by the issuance of bonds, notes or other obligations in accordance with the laws authorizing issuance of local authority obligations; provided, however, that notwithstanding the provisions of [Sections] Section 4-54-3 or 6-15-5 NMSA 1978 or other statute or law requiring the public sale of local authority obligations, such obligations may be sold at private sale to the commission at the price and upon the terms and conditions the local authority shall determine;
(3) levy, collect and pay over to the commission and obligate itself to continue to levy, collect and pay over to the commission the proceeds of one or more of the following:
(a) sewer or waste disposal service fees or charges;
(b) licenses, permits, taxes and fees;
(c) special assessments on the property served or benefited by the wastewater facility project; [and] or
(d) other revenue available to the local authority;
(4) undertake and obligate itself to pay its contractual obligation to the commission solely from the proceeds from any of the sources specified in Paragraph (3) of this subsection or, in accordance with the laws authorizing issuance of local authority obligations, impose upon itself a general obligation pledge to the commission additionally secured by a pledge of any of the sources specified in Paragraph (3) of this subsection; [and] or
(5) enter into agreements, perform acts and delegate functions and duties as its governing body shall determine is necessary or desirable to enable the division as agent for the commission to fund a loan to the local authority to aid it in the construction or acquisition of a wastewater facility project.
C. Each loan made by the division as agent for the commission shall provide that repayment of the loan shall begin not later than one year after completion of construction of the wastewater facility project for which the loan was made and shall be repaid in full no later than twenty years after completion of the construction. All principal and interest on loan payments shall be deposited in the fund.
D. Financial assistance shall be made with an annual interest rate to be five percent or less as determined by the commission.
E. A zero-percent interest rate may be approved by the division when the following conditions have been met by the local authority:
(1) the local authority's average user cost is at least fifteen dollars ($15.00) per month or a higher amount as determined by the commission; and
(2) the local authority's median household income is less than three-fourths of the statewide nonmetropolitan median household income.
F. A local authority may use the proceeds from financial assistance received under the Wastewater Facility Construction Loan Act to provide a local match or any other nonfederal share of a wastewater facility construction project as allowed pursuant to the Clean Water Act.
G. Financial assistance received pursuant to the Wastewater Facility Construction Loan Act shall not be used by a local authority on any wastewater facility project constructed in fulfillment or partial fulfillment of requirements made of a subdivider under the provisions of the Land Subdivision Act or the New Mexico Subdivision Act.
H. Financial assistance shall be made only to local authorities that employ or contract with a registered professional engineer to provide and be responsible for engineering services on the wastewater facility project. Such services include but are not limited to an engineering report, construction contract documents, supervision of construction and start-up services.
I. Financial assistance shall be made only for eligible items. For financial assistance composed entirely of state funds, eligible items include but are not limited to the costs of engineering feasibility reports, contracted engineering design, inspection of construction, special engineering services, start-up services, contracted construction, materials purchased or equipment leased for force account construction, land or acquisition of existing facilities, but eligible items do not include the costs of water rights and local authority administrative costs. For financial assistance made from federal funds, eligible items are those identified pursuant to the Clean Water Act.
J. In the event of default by the local authority, the commission may enforce its rights by suit or mandamus or may [utilize] use all other available remedies under state law."
SECTION 42. Section 75-1-3 NMSA 1978 (being Laws 1973, Chapter 333, Section 3, as amended) is amended to read:
"75-1-3. RURAL INFRASTRUCTURE REVOLVING LOAN FUND CREATED--ADMINISTRATION--EMERGENCY FUND.--
A. [A special fund is created to be known as] The "rural infrastructure revolving loan fund" is created in the state treasury. Money appropriated to the fund or to the department to carry out the provisions of the Rural Infrastructure Act may be used to make loans and grants to local authorities, individually or jointly, for water supply, wastewater or solid waste facilities. [Appropriations made to the fund but not expended at the end of the fiscal year for which appropriated] Money in the fund shall not revert to the general fund but shall accrue to the credit of the fund. Earnings on the balance in the fund shall be credited to the fund. In addition, when the proceeds from the issuance of severance tax bonds appropriated to the fund are deposited in the state treasury, interest earned on that money during the period from deposit in the state treasury until the actual transfer of the money to the fund shall be credited to the fund.
B. Ten percent of any appropriation to the fund or to the department to carry out the provisions of the Rural Infrastructure Act shall be set aside for emergency grants and loans pursuant to Section 75-1-5 NMSA 1978.
C. All water supply, wastewater and solid waste facilities shall be designed in compliance with the engineering requirements established by the secretary after consulting with and considering the recommendations of the professional engineering societies operating in New Mexico. The secretary shall also establish, by [regulation] rule, guidelines for the ranking of solid waste projects for top priority based on public health needs.
D. All applications for water supply facilities or wastewater supply facilities shall be submitted to the water trust board as provided in the Water Project Finance Act. After the applications have been evaluated by technical review teams and priority ranked by the water trust board, its recommendations on water supply facilities and wastewater supply facilities, including loans or grants from the fund, shall be submitted to the department for its approval or rejection of the funding request. If the department rejects the water trust board's recommendation for funding from the fund, the water supply facility or wastewater supply facility project may be denied by the water trust board.
[D.] E. The department shall administer the fund and shall make grant and loan disbursements in accordance with the Rural Infrastructure Act. The secretary shall adopt [regulations] rules to govern the application procedure and requirements for disbursing grants and loans under the Rural Infrastructure Act, including requirements consistent with the purpose of the act for determining the eligibility and priority of local authorities for such grants and loans.
[E.] F. Receipts from the repayment of loans, including loans approved by the state board of finance pursuant to Section 75-1-5 NMSA 1978, shall be deposited in the fund by the department, including receipts from the repayment of loans made pursuant to appropriations to carry out the purposes of the Water Supply Construction Act made prior to the effective date of the Rural Infrastructure Act.
[F.] G. Money in the fund is appropriated to the department to carry out the provisions of the Rural Infrastructure Act. The department may allocate up to two percent of the total balance in the fund to pay for administrative expenses necessary to carry out the provisions of the Rural Infrastructure Act. Money allocated for administrative expenses shall be placed in a separate administrative account in the fund to be used solely for administrative expenses, and the department shall at the beginning of the fiscal year determine the projected administrative costs for the year and deposit in the account the appropriate amount; provided that the amount to be deposited does not exceed two percent of the total balance in the fund. Money in the account shall remain in the account at the end of a fiscal year.
[G.] H. Loans and grants made pursuant to the provisions of the Rural Infrastructure Act shall not be used by the local authority on any project constructed in fulfillment or partial fulfillment of requirements made of a subdivider by the provisions of the Land Subdivision Act or the New Mexico Subdivision Act."
SECTION 43. Section 75-1-4 NMSA 1978 (being Laws 1973, Chapter 333, Section 4, as amended) is amended to read:
"75-1-4. CONDITIONS FOR GRANTS AND LOANS.--
A. Grants and loans shall be made only to local authorities that:
(1) agree to operate and maintain the water supply, wastewater or solid waste facilities so that the facilities will function properly over the structural and material design life, which shall not be less than twenty years;
(2) require the contractor of the construction project to post a performance and payment bond in accordance with the requirements of Section 13-4-18 NMSA 1978;
(3) provide a written assurance, signed by an attorney, that the local authority has proper title, easements and rights of way to the property upon or through which the water supply, wastewater or solid waste facility proposed for funding is to be constructed or extended;
(4) meet the requirements of the financial capability set by the [department] water trust board to assure sufficient revenues to operate and maintain the facility for its useful life and to repay the loan;
(5) pledge sufficient revenues for repayment of the loan, provided that such revenues may by law be pledged for that purpose; and
(6) agree to properly maintain financial records and to conduct an audit of the project's financial records.
B. Except as otherwise provided in the Rural Infrastructure Act, a loan shall be for a period of time not to exceed twenty years. Loans may be interest free or bear an annual interest rate set by the secretary that is at or below market interest rates. The repayment of loans shall be in annual, quarterly or monthly installments, as approved by the department, beginning one year after completion of the project. The repayment of the interest on the loan accumulated during the design and construction of a project may be included in the final loan amount, but it shall not be counted in determining the maximum loan amount.
C. No loan recipient eligible to receive a grant under the Rural Infrastructure Act shall receive grants in any one year totaling more than five hundred thousand dollars ($500,000).
D. The maximum assistance, including both loans and grants, that a local authority may receive under the Rural Infrastructure Act in any one year is two million dollars ($2,000,000).
E. Plans and specifications for a water supply, wastewater or solid waste facility construction project shall be approved by the department before grant or loan disbursements to pay for construction costs are made to a local authority. Interim loan disbursements to pay for engineering and other professional services may be made by the department prior to the approval of the plans and specifications.
F. Privately owned water supply, wastewater or solid waste facilities are not eligible for assistance under the Rural Infrastructure Act.
G. Grants and loans shall be made only for eligible items. Eligible items include but are not limited to the costs of engineering feasibility reports, contracted engineering design, inspection of construction, special engineering services, archaeological surveys and contracted construction. The costs of water rights, land, system acquisition, easements and rights of way, refinancing of program loans, legal costs and fiscal agents' fees are eligible items only for loan funds. Local authority administrative costs shall not be included as eligible items.
H. The department may:
(1) conduct periodic reviews of the operation of a local authority that has received funding from the department;
(2) require the local authority to submit information relevant to the loan to the department;
(3) require the submission of financial reports relevant to the ability of the local authority to repay the loan; and
(4) review and require changes to the rate-setting analysis that supports the loan payments.
I. In the event the local authority fails to make the prescribed loan repayment, the department is authorized to set solid waste, water or wastewater user rates in the area of the local authority's jurisdiction in order to provide sufficient money for repayment of the loan and proper operation and maintenance. Funds sufficient to provide for repayment of the loan and proper operation and maintenance shall be identified through a rate-setting analysis that will ensure enough revenue to cover yearly expenses and emergencies, a reserve fund for nonmajor capital items and equitable pay for staff. The rate-setting analysis may be reviewed and changed on a yearly basis if necessary.
J. The department may enforce its rights as provided by law."
SECTION 44. Section 75-2-4 NMSA 1978 (being Laws 1975, Chapter 265, Section 4, as amended) is amended to read:
"75-2-4. INTERSTATE STREAM COMMISSION--ADDITIONAL POWERS AND DUTIES.--In addition to its other powers and duties, the interstate stream commission shall:
A. meet upon the call of its [chairman] chair;
B. review and approve or deny water research, conservation or development project proposals submitted to the commission by [institutions of higher learning, political subdivisions or other appropriate nonprofit research or development entities] the water trust board on the basis of potential merit, benefit to the state and feasibility;
C. adopt guidelines for project [preparation, review, application and] approval;
D. upon approval of a project, allocate available funds for [such] the water research, conservation or development project; provided that:
(1) no single project shall receive more than forty percent of the total available funds;
(2) no less than forty percent of the total available funds shall be allocated for conservation or development projects [which] that have the potential of providing immediate solutions to problems facing the people of the state; and
(3) no funds appropriated to the water research, conservation and development fund shall be used for water distribution system construction, including [but not limited to] irrigation canals, acequias, reservoirs, dams or domestic or municipal water distribution systems;
E. adopt reporting and monitoring procedures for evaluation of research, conservation or development projects being conducted by recipients of disbursements under the Water Research, Conservation and Development Act, and after making the appropriate evaluation of the project, make arrangements for termination of the project, if so indicated;
F. report annually to the governor, [and] the legislature and the water trust board on the status of the various research, conservation or development projects, including a report on total funds expended under [this] the Water Research, Conservation and Development Act, including the amounts and sources of outside matching funds; and
G. expend no more than fifteen thousand dollars ($15,000) from the water research, conservation and development fund for the administrative purposes of the Water Research, Conservation and Development Act during any fiscal year."
SECTION 45. APPROPRIATION.--Seven hundred fifty thousand dollars ($750,000) is appropriated from the general fund to the office of the state engineer for expenditure in fiscal year 2015 to establish the water trust office. Any unexpended or unencumbered balance remaining at the end of fiscal year 2015 shall revert to the general fund.
SECTION 46. REPEAL.--Sections 72-4A-5.1 and 72-4A-6 NMSA 1978 (being Laws 2003, Chapter 131, Section 2 and Laws 2003, Chapter 137, Section 2 and Laws 2001, Chapter 164, Section 6, as amended) are repealed.
SECTION 47. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2014.
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