HB 240
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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.
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; HB 240
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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;
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 insurance or security for revenue bonds issued
by the authority;
G. "fund" means the drinking water state revolving
loan fund;
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 HB 240
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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
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."
SECTION 2. 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 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. HB 240
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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
(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 HB 240
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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 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 HB 240
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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, 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."
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 HB 240
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the provisions of the Drinking Water State Revolving Loan
Fund Act, including memoranda of understanding, contracts and
agreements with federal agencies, the department, local
authorities and other parties.
B. The department shall adopt, by rule, a system
for the ranking of drinking water facility construction
projects requesting financial assistance and for the
development of a priority list that will be part of the
annual intended use plan, as required by the federal Safe
Drinking Water Act.
C. The department shall adopt rules or internal
procedures addressing the mechanism for the preparation of
the annual intended use plan and the content of the plan and
shall prepare the plan, with the assistance of the authority,
as required by the federal Safe Drinking Water Act and the
federal capitalization grant agreement. The department shall
review all proposals for drinking water facility construction
projects, including project plans and specifications for
compliance with the requirements of the federal Safe Drinking
Water Act and the requirements of state laws and 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 HB 240
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requirements of the federal Safe Drinking Water Act and with
the requirements of state laws and 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 rules governing
construction and operation of drinking water supply
facilities.
E. The department shall adopt rules or internal
procedures establishing the criteria and method for the
distribution of federal annual capitalization grant funds
between the fund and the nonproject activities, 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, 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 HB 240
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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, 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 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,
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 HB 240
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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 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, 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
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 thirty years after completion HB 240
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of the construction, except in the case of a disadvantaged
community. 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 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 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
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 the services are
needed, may include an engineering report, facility plans, HB 240
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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 loan fund; provided the Wastewater
Facility Construction Loan Act is amended to allow for such
transfer. 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 HB 240
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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
one-third of a federal drinking water state revolving loan
fund capitalization grant to the wastewater facility
construction loan fund. 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 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; HB 240
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(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 use all other available remedies under state
law in the event of default by a local authority.
C. The authority 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 HB 240
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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 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 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, HB 240
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with the approval of the authority, obligate 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
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 the bonds or be subject
to personal liability or accountability by reason of the
issuance 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."