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HOUSE BILL 240
57
TH LEGISLATURE
-
STATE
OF
NEW
MEXICO
-
FIRST SESSION
,
2025
INTRODUCED BY
Susan K. Herrera and Kristina Ortez and Dayan Hochman-Vigil
and Anita Gonzales and Sarah Silva
ENDORSED BY THE NEW MEXICO FINANCE AUTHORITY
OVERSIGHT COMMITTEE
AN ACT
RELATING TO THE DRINKING WATER STATE REVOLVING LOAN FUND ACT;
ALLOWING THE NEW MEXICO FINANCE AUTHORITY TO PROVIDE GRANTS FOR
THE CONSTRUCTION OR REHABILITATION OF DRINKING WATER
FACILITIES; REQUIRING THE NEW MEXICO FINANCE AUTHORITY, IN
COOPERATION WITH THE DEPARTMENT OF ENVIRONMENT, TO PROVIDE
ANNUAL REPORTS ON THE DRINKING WATER STATE REVOLVING LOAN FUND;
REDISTRIBUTING DUTIES HELD BETWEEN THE NEW MEXICO FINANCE
AUTHORITY AND THE DEPARTMENT OF ENVIRONMENT; EXTENDING
REPAYMENT PERIOD REQUIREMENTS FOR LOANS MADE PURSUANT TO THE
DRINKING WATER STATE REVOLVING LOAN FUND ACT; RENEWING THE
AUTHORITY OF THE NEW MEXICO FINANCE AUTHORITY TO TRANSFER UP TO
ONE-THIRD OF CERTAIN GRANTS TO THE DRINKING WATER STATE
REVOLVING LOAN FUND AND TO THE WASTEWATER FACILITY CONSTRUCTION
LOAN FUND.
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. 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. "federal Safe Drinking Water Act" means the
federal Safe Drinking Water Act as amended in 1996 and its
subsequent amendments or successor provisions;
[E.] F. "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, grants , bond
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insurance or security for revenue bonds issued by the
authority;
[F.] G. "fund" means the drinking water state
revolving loan fund;
[G.] H. "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
federal Safe Drinking Water Act. "Local authority" does not
include systems owned by federal agencies; and
[H.] I. "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 ]."
SECTION 2. Section 6-21A-4 NMSA 1978 (being Laws 1997,
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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 federal 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
federal Safe Drinking Water Act;
(3) loan principal, interest and penalty
payments if required by the terms of any federal grant under
the federal Safe Drinking Water Act;
(4) any other public or private money
dedicated to the fund; and
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(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 federal Safe Drinking Water Act and may be used:
(1) to provide loans and grants 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 and to the
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extent permitted by federal regulations , 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 priority list or
otherwise satisfy the federal 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 ]
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 federal Safe Drinking Water Act."
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SECTION 3. 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,
local authorities and other parties.
B. The department shall adopt, by [regulation ]
rule, a system for the ranking of drinking water facility
construction projects requesting financial assistance and for
the development of a priority list [which ] that will be part of
the annual intended use plan, as required by the federal 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 authority, as required by the federal Safe
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Drinking Water Act and the federal capitalization grant
agreement. The department 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 federal 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 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 federal 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 federal 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
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or internal procedures establishing the criteria and method for
the distribution of federal annual capitalization grant funds
between the fund and the nonproject activities [(set-asides) ],
also known as set-asides , allowed by the federal 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) ], also known as set-asides ,
allowed by the federal Safe Drinking Water Act.
F. The authority, with the assistance of the
department, 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 [(set-asides) ]
activities, also known as set-asides , authorized under the
federal 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 federal Safe Drinking Water
Act, Section 1452(g)(2) activities.
H. The [department] authority shall prepare and
submit applications for federal capitalization grants to the
United States environmental protection agency as required by
the federal Safe Drinking Water Act."
SECTION 4. Section 6-21A-6 NMSA 1978 (being Laws 1997,
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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 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, regardless of rank
on such list;
(3) are considered by 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
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.
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C. The authority, with assistance from the
department, shall establish procedures addressing methods to
provide financial assistance to local authorities in accordance
with the criteria set forth in the federal 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] eighteen months 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 ] thirty 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] forty 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.
F. Financial assistance pursuant to the Drinking
Water State Revolving Loan Fund Act shall not be given to a
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local authority if 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 authority determines [such ] the 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 5. Section 6-21A-7 NMSA 1978 (being Laws 1997,
Chapter 144, Section 7) is amended to read:
"6-21A-7. DEPARTMENT DUTIES--POWERS.--
A. The department with the approval of the governor
and as authorized in the intended use plan may transfer up to
one-third of a federal wastewater facility construction loan
fund capitalization grant to the drinking water state revolving
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loan fund; provided the Wastewater Facility Construction Loan
Act is amended to allow for such transfer. [This provision is
available one year after the receipt of the first full
capitalization grant for the Drinking Water State Revolving
Loan Fund Act and will expire with the capitalization grant of
the year 2002.] Before the department makes the transfer, the
department shall:
(1) outline the transfer in the applicable
intended use plans for both the drinking water state revolving
loan fund and the wastewater facility construction loan fund;
and
(2) report the intended transfer to the
legislature.
B. The department in the annual intended use plan
shall certify to the United States environmental protection
agency the progress made regarding operator certification and
capacity development programs as they relate to the receipt of
capitalization grants available from the environmental
protection agency under the federal Safe Drinking Water Act."
SECTION 6. Section 6-21A-8 NMSA 1978 (being Laws 1997,
Chapter 144, Section 8) is amended to read:
"6-21A-8. AUTHORITY DUTIES--POWERS.--
A. The authority with the approval of the governor
and as authorized in the intended use plan may transfer up to
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one-third of a federal drinking water state revolving loan fund
capitalization grant to the wastewater facility construction
loan fund. [This provision is available one year after the
receipt of the first full capitalization grant and will expire
with the capitalization grant of the year 2002. ] Before the
authority makes the transfer, the authority shall:
(1) outline the transfer in the applicable
intended use plans for both the drinking water state revolving
loan fund and the wastewater facility construction loan fund;
and
(2) report the intended transfer to the
legislature.
B. The authority [will have ] has the power:
(1) to foreclose upon or attach any drinking
water facility, property or interest in the facility pledged,
mortgaged or otherwise available as security for a project
financed in whole or in part pursuant to the Drinking Water
State Revolving Loan Fund Act in the event of a default by a
local authority;
(2) to acquire and hold title to or leasehold
interest in real and personal property and to sell, convey or
lease that property for the purpose of satisfying a default or
enforcing the provisions of a loan agreement; and
(3) to enforce its rights by suit or mandamus
or may [utilize] use all other available remedies under state
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law in the event of default by a local authority.
C. The authority [will have ] has the power to issue
bonds or refunding bonds pursuant to the New Mexico Finance
Authority Act and the Drinking Water State Revolving Loan Fund
Act when the authority determines that a bond issue is required
or desirable to implement the provisions of the Drinking Water
State Revolving Loan Fund Act.
D. As security for the payment of the principal and
interest on bonds issued by the authority, the authority is
authorized to pledge, transfer and assign:
(1) any obligations of each local authority,
payable to the authority;
(2) the security for the local authority
obligations;
(3) any grant, subsidy or contribution from
the United States or any of its agencies or instrumentalities;
or
(4) any income, revenues, funds or other money
of the authority from any other source appropriated or
authorized for use for the purpose of implementing the
provisions of the Drinking Water State Revolving Loan Fund Act,
including the fund.
E. The bonds and other obligations issued by the
authority shall be issued and delivered in accordance with the
provisions of the New Mexico Finance Authority Act and may be
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sold at any time the authority determines appropriate. The
authority may apply the proceeds of the sale of the bonds to:
(1) the purposes of the Drinking Water State
Revolving Loan Fund Act or the purposes for which the fund may
be used;
(2) the payment of interest on bonds issued by
the authority for a period not to exceed three years from the
date of issuance of the bonds; and
(3) the payment of all expenses, including
publication and printing charges, attorney fees, financial
advisory and underwriter fees and premiums or commissions that
the authority determines are necessary or advantageous in
connection with the recommendation, advertisement, sale,
creation and issuance of bonds.
F. In the event that [funds are ] money is not
available for a loan for a drinking water facility project when
application is made, in order to accelerate the completion of
any drinking water facility project, the local authority may,
with the approval of the authority, obligate [such local
authority] itself to provide local funds to pay that portion of
the cost of the drinking water facility project that the
authority agrees to make available by loan, and the authority
may reimburse the amount expended on its behalf by the local
authority.
G. Authority members or employees and any person
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executing bonds issued pursuant to the New Mexico Finance
Authority Act and Drinking Water State Revolving Loan Fund Act
shall not be liable personally on [such ] the bonds or be
subject to [any] personal liability or accountability by reason
of the issuance [thereof ] of the bonds.
H. All bonds, notes and certificates issued by the
authority shall be special obligations of the authority,
payable solely from the revenue, income, fees or charges that
may, pursuant to the provisions of the New Mexico Finance
Authority Act and the Drinking Water State Revolving Loan Fund
Act, be pledged to the payment of such obligations, and the
bonds, notes or certificates shall not create an obligation,
debt or liability of the state. No breach of any pledge,
obligation or agreement of the authority shall impose a
pecuniary liability upon the state or a charge upon its general
credit or taxing power."
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