0001| SENATE BILL 1112
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0002| 43rd legislature - STATE OF NEW MEXICO - first session, 1997
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0003| INTRODUCED BY
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0004| JOSEPH A. FIDEL
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0005|
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0006|
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0007|
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0008|
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0009|
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0010| AN ACT
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0011| RELATING TO RURAL INFRASTRUCTURE; AMENDING THE RURAL
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0012| INFRASTRUCTURE ACT; TRANSFERRING ADMINISTRATION OF THE ACT AND
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0013| THE RURAL INFRASTRUCTURE REVOLVING LOAN FUND TO THE NEW MEXICO
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0014| FINANCE AUTHORITY; AMENDING CERTAIN SECTIONS OF THE NMSA 1978.
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0015|
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0016| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0017| Section 1. Section 75-1-2 NMSA 1978 (being Laws 1973,
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0018| Chapter 333, Section 2, as amended) is amended to read:
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0019| "75-1-2. DEFINITIONS.--As used in the Rural
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0020| Infrastructure Act:
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0021| [A. "division" means the environmental improvement
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division of the health and environment department]
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0023| A. "authority" means the New Mexico finance
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0024| authority;
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0025| B. "board" means the environmental improvement
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0001| board;
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0002| C. "department" means the department of
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0003| environment;
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0004| [C.] D. "fund" means the rural infrastructure
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0005| revolving loan fund;
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0006| [D.] E. "local authority" means any
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0007| incorporated city, town or village, county, mutual domestic
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0008| association, public water cooperative association or sanitation
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0009| district whose water supply facility serves a population of
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0010| less than ten thousand;
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0011| [E.] F. "operate and maintain" means all
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0012| necessary activities, including but not limited to replacement
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0013| of equipment or appurtenances to assure the dependable and
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0014| economical function of a water supply facility in accordance
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0015| with its intended purpose; and
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0016| [F.] G. "water supply facility" includes but is
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0017| not limited to the source of supply of water, pumping
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0018| equipment, storage facilities, transmission lines, treatment
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0019| works and distribution systems."
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0020| Section 2. Section 75-1-3 NMSA 1978 (being Laws 1973,
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0021| Chapter 333, Section 3, as amended) is amended to read:
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0022| "75-1-3. FUND CREATED--ADMINISTRATION--EMERGENCY FUND.--
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0023| A. A special fund is created at the authority to
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0024| be known as the "rural infrastructure revolving loan fund".
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0025| Money appropriated to the fund or to the [division]
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0001| authority to carry out the provisions of the Rural
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0002| Infrastructure Act may be used to make loans and grants to
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0003| local authorities, individually or jointly, for water supply
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0004| facilities. Appropriations made to the fund but not expended
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0005| at the end of the fiscal year for which appropriated shall not
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0006| revert to the general fund but shall accrue to the credit of
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0007| the fund. Earnings on the balance in the fund shall be
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0008| credited to the fund. In addition, when the proceeds from the
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0009| issuance of severance tax bonds appropriated to the fund are
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0010| deposited in the state treasury, interest earned on that money
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0011| during the period from deposit in the state treasury until the
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0012| actual transfer of the money to the fund shall be credited to
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0013| the fund.
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0014| B. Ten percent of any appropriation to the fund or
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0015| to the [division] authority to carry out the provisions of
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0016| the Rural Infrastructure Act shall be set aside for emergency
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0017| grants and loans pursuant to Section 75-1-5 NMSA 1978.
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0018| C. All water supply facilities shall be designed
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0019| in compliance with the engineering requirements established by
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0020| the board after consulting with and considering the
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0021| recommendations of the professional engineering societies
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0022| operating in New Mexico. The [board] department shall also
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0023| establish, by regulations, guidelines for the ranking of
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0024| projects for top priority based on public health needs.
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0025| D. The [division] authority shall administer
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0001| the fund and shall make grant and loan disbursements in
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0002| accordance with the Rural Infrastructure Act. The [board]
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0003| authority shall adopt regulations to govern the application
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0004| procedure and requirements for disbursing grants and loans
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0005| under the Rural Infrastructure Act, including requirements
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0006| consistent with the purpose of the act for determining the
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0007| eligibility [and priority] of local authorities [for] to
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0008| receive such grants and loans. The [division] authority
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0009| shall coordinate its application procedures and funding cycle
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0010| pursuant to the New Mexico Community Assistance Act.
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0011| E. Receipts from the repayment of loans, including
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0012| loans approved by the state board of finance pursuant to
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0013| Section 75-1-5 NMSA 1978, shall be deposited in the fund by the
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0014| [division] authority, including receipts from the repayment
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0015| of loans made pursuant to appropriations to carry out the
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0016| purposes of the Water Supply Construction Act made prior to the
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0017| effective date of the Rural Infrastructure Act.
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0018| F. Loans and grants made pursuant to the provisions
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0019| of the Rural Infrastructure Act shall not be used by the local
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0020| authority on any project constructed in fulfillment or partial
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0021| fulfillment of requirements made of a subdivider by the
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0022| provisions of the Land Subdivision Act or the New Mexico
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0023| Subdivision Act.
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0024| G. The balance of the fund at the state treasurer
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0025| shall be transferred on the effective date of this 1997 act to
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0001| the authority.
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0002| H. All loans and grants held by the department
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0003| shall be transferred on the effective date of this 1997 act to
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0004| the authority."
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0005| Section 3. Section 75-1-4 NMSA 1978 (being Laws 1973,
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0006| Chapter 333, Section 4, as amended) is amended to read:
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0007| "75-1-4. CONDITIONS FOR GRANTS AND LOANS.--
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0008| A. Grants and loans shall be made only to local
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0009| authorities that:
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0010| (1) agree to operate and maintain the water
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0011| supply facilities so that the facilities will function properly
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0012| over the structural and material design life, which shall not
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0013| be less than twenty years;
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0014| (2) require the contractor of the construction
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0015| project to post a performance and payment bond in accordance
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0016| with the requirements of Section 13-4-18 NMSA 1978;
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0017| (3) provide a written assurance, signed by an
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0018| attorney, that the local authority has proper title, easements
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0019| and rights-of-way to the property upon or through which the
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0020| water supply facility proposed for funding is to be constructed
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0021| or extended;
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0022| (4) meet the requirements of the financial
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0023| capability set by the [division] authority to assure
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0024| sufficient revenues to operate and maintain the facility for
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0025| its useful life and to repay the loan;
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0001| (5) pledge sufficient revenues for repayment
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0002| of the loan, provided that such revenues may by law be pledged
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0003| for that purpose; and
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0004| (6) agree to properly maintain financial
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0005| records and to conduct an audit of the project's financial
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0006| records.
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0007| B. Except as otherwise provided in the Rural
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0008| Infrastructure Act, a loan shall be for a period of time not to
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0009| exceed twenty years with an annual subsidized interest [rate
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of five percent on the unpaid balance, unless, in order to
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comply with federal arbitrage requirements, the state board of
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finance upon issuance and sale of bonds appropriated to the
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fund specifies a lower rate of interest on such loan to match
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the interest rate upon bonds funding the project, and] to be
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0015| determined by the authority periodically and provided that it
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0016| does not exceed fifty percent of the average interest of non-
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0017| taxable bonds issued the previous year by the authority for the
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0018| construction of water system improvements. The actual
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0019| procedure to determine interest rates shall be promulgated
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0020| under the authority's regulation. A loan shall not exceed
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0021| five hundred thousand dollars ($500,000) in any one year. The
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0022| repayment of loans shall be in equal annual installments
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0023| beginning one year after completion of the project. The
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0024| repayment of the interest on the loan accumulated during the
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0025| design and construction of a project may be included in the
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0001| final loan amount, but it shall not be counted in determining
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0002| the maximum loan amount.
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0003| C. No loan recipient eligible to receive a grant
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0004| under the Rural Infrastructure Act shall receive grants in any
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0005| one year totaling more than two hundred thousand dollars
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0006| ($200,000).
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0007| D. The maximum assistance, including both loans and
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0008| grants, which a local authority may receive under the Rural
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0009| Infrastructure Act is five hundred thousand dollars ($500,000).
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0010| E. Plans and specifications for a water supply
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0011| facility construction project shall be approved by the
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0012| [division] authority before grant or loan disbursements to
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0013| pay for construction costs are made to a local authority.
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0014| Interim loan disbursements to pay for engineering and other
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0015| professional services may be made by the [division]
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0016| authority prior to the approval of the plans and
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0017| specifications.
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0018| F. Privately owned water supply facilities are not
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0019| eligible for assistance under the Rural Infrastructure Act.
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0020| G. Grants and loans shall be made only for eligible
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0021| items. Eligible items include but are not limited to the costs
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0022| of engineering feasibility reports, contracted engineering
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0023| design, inspection of construction, special engineering
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0024| services, archaeological surveys and contracted construction.
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0025| The costs of water rights, land, system acquisition, easements
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0001| and rights-of-way, refinancing of delinquent program loans,
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0002| legal costs and fiscal agents' fees are eligible items only for
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0003| loan funds. Local authority administrative costs shall not be
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0004| included as eligible items.
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0005| H. In the event the local authority fails to make
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0006| the prescribed loan repayment, the [division] authority is
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0007| authorized to set water user rates in the area of the local
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0008| authority's jurisdiction in order to provide sufficient money
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0009| for repayment of this loan and proper operation and
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0010| maintenance.
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0011| I. In the event of default, the authority shall
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0012| have the power to enforce its rights by suit or mandamus or may
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0013| use all of the available remedies under state law."
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0014| Section 4. Section 75-1-5 NMSA 1978 (being Laws 1987,
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0015| Chapter 175, Section 4, as amended) is amended to read:
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0016| "75-1-5. EMERGENCY LOANS AND GRANTS.--Ten percent of the
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0017| proceeds of each severance tax bond issuance or other
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0018| appropriation for the purpose of carrying out the provisions of
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0019| the Rural Infrastructure Act shall be reserved for emergencies
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0020| and shall be allocated by the [division] authority only
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0021| upon approval of the state board of finance. The department
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0022| shall make the recommendation to the state board of finance on
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0023| any emergency request. This amount shall not be deposited in
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0024| the fund but shall be kept in a separate account by the
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0025| authority and shall be allocated only for emergency loans and
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0001| grants. Emergency loans and grants shall be made in accordance
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0002| with the applicable provisions for loans pursuant to the Rural
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0003| Infrastructure Act; provided that a grant shall not exceed two
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0004| hundred thousand dollars ($200,000). At the end of the third
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0005| quarter of each fiscal year, the unexpended balance of the
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0006| reserved amount may be transferred by the [division]
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0007| authority to the fund for use in accordance with the Rural
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0008| Infrastructure Act."
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0009| Section 5. Section 75-1-6 NMSA 1978 (being Laws 1988,
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0010| Chapter 28, Section 7, as amended) is amended to read:
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0011| "75-1-6. AVERAGE RESIDENTIAL USER COST REDUCTION GRANTS
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0012| AND ZERO PERCENT LOANS.--
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0013| A. No more than twenty-five percent of the proceeds
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0014| of each severance tax bond issuance or other appropriation for
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0015| the purpose of carrying out the provisions of the Rural
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0016| Infrastructure Act shall be reserved for average residential
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0017| user cost reduction grants [or zero percent loans] to reduce
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0018| average residential user cost to a reasonable level for
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0019| eligible financially needy loan recipients whose water supply
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0020| facilities serve less than three thousand persons.
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0021| B. Average residential user cost reduction grants
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0022| [and zero percent loans] shall be allocated by the
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0023| [division] authority in accordance with the provisions for
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0024| grants [and loans] pursuant to the Rural Infrastructure Act,
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0025| provided that an average residential user cost reduction grant
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0001| [or zero percent loan] shall not exceed two hundred thousand
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0002| dollars ($200,000). Such grants [and loans] shall reduce
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0003| only the principal and interest portion of the average
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0004| residential user cost to a reasonable cost as determined by the
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0005| [division] authority.
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0006| C. [A zero percent loan or] An average
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0007| residential user cost reduction grant shall be approved by the
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0008| [division] authority when, after construction bids have
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0009| been received, the following conditions have been met by the
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0010| local authority whose average residential user costs are in
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0011| need of reduction:
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0012| (1) the construction project is designed using
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0013| the most cost effective and dependable option;
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0014| (2) the system is designed with adequate
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0015| built-in expansion capacity;
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0016| (3) other sources of grant funds have been
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0017| sought and are not available in a timely manner;
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0018| (4) the project cannot feasibly be reduced in
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0019| scope or phased so as to bring it within available loan funds
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0020| and within reasonable user cost; and
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0021| (5) the local authority's average residential
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0022| user cost in need of the reduction is at least eighteen dollars
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0023| ($18.00) per month.
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0024| D. The authority may request a separate
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0025| appropriation from the legislature to be used only for average
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0001| user cost reduction grants and not subject to the limitations
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0002| of Subsection A of this section; provided that the grants are
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0003| leveraged with repayment money deposited in the fund and
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0004| allocated to local authorities as loans by the authority in any
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0005| one year."
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0006| Section 6. EFFECTIVE DATE.--The effective date of the
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0007| provisions of this act is July 1, 1997.
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0008|
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