HOUSE BILL 1266

48th legislature - STATE OF NEW MEXICO - first session, 2007

INTRODUCED BY

Daniel P. Silva

AN ACT

RELATING TO HISTORIC PRESERVATION; ENACTING THE MAIN STREET REVOLVING LOAN ACT; CREATING A REVOLVING LOAN PROGRAM FOR THE RESTORATION, REHABILITATION OR REPAIR OF HISTORIC PROPERTIES; MAKING AN APPROPRIATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     Section 1. SHORT TITLE.--This act may be cited as the "Main Street Revolving Loan Act".

     Section 2. PURPOSE.--The purpose of the Main Street Revolving Loan Act is to provide owners of historic properties with low-cost financial assistance, through the creation of a self-sustaining revolving loan program, in the restoration, rehabilitation and repair of those properties if they meet certain eligibility criteria and would contribute substantially to the state's economic well-being and to a sound and proper balance between preservation and development.

     Section 3. DEFINITIONS.--As used in the Main Street Revolving Loan Act:

          A. "committee" means the main street revolving loan committee;

          B. "division" means the historic preservation division of the cultural affairs department;

          C. "eligible property" means a site, structure, building or object entered in the state register of cultural properties or the national register of historic places or otherwise found pursuant to rule of the committee to merit preservation pursuant to the Main Street Revolving Loan Act;

          D. "fund" means the main street revolving loan fund; and

          E. "property owner" means the sole owner, joint owner, owner in partnership or an owner of a leasehold interest with a term of five years or longer of an eligible property.

     Section 4. MAIN STREET REVOLVING LOAN COMMITTEE--COMMITTEE AND DIVISION DUTIES.--

          A. The "main street revolving loan committee" is created, consisting of six members as follows:

                (1) the director of the division or the director's designee;

                (2) the coordinator of the main street program under the Main Street Act or the coordinator's designee;

                (3) the chair of the cultural properties review committee or the chair's designee;

                (4) the director of the local government division of the department of finance and administration or the director's designee;

                (5) a member appointed by the governor with expertise in small loans; and

                (6) the chair of the board of directors of New Mexico mainstreet, inc. or the chair's designee.

          B. Public members of the committee shall not be paid but shall be reimbursed for per diem and mileage pursuant to the Per Diem and Mileage Act.

          C. The committee shall:

                (1) elect a chair and such other officers as it deems necessary;

                (2) meet at the call of the chair but no less than four times per year;

                (3) by rule, establish eligibility criteria for properties and owners, establish procedures to govern the application outreach and marketing of the loan program and promulgate such other rules as are necessary to carry out the provisions of the Main Street Revolving Loan Act; and

                (4) after considering the recommendations of the division, make awards of loans or loan subsidies.

          D. The division shall:

                (1) review applications for loans and loan subsidies and make recommendations to the committee;

                (2) administer all loans and loan subsidies;

                (3) serve as staff to the committee; and

                (4) report annually to the governor, the legislative finance committee and the legislature on loans made, loan payments received and all other activities conducted pursuant to the Main Street Revolving Loan Act.

     Section 5. MAIN STREET REVOLVING LOAN FUND.--The "main street revolving loan fund" is created in the state treasury. The fund shall consist of appropriations, loan payments, federal funds received for the purpose of making loans, gifts, grants, donations and bequests made to the fund. Income from the fund shall be credited to the fund, and money in the fund shall not revert or be transferred to any other fund at the end of a fiscal year. Money in the fund is appropriated to the committee for the purposes of making revolving loans pursuant to the provisions of the Main Street Revolving Loan Act. Expenditures from the fund shall be made on warrant of the secretary of finance and administration pursuant to vouchers signed by the director of the division.

     Section 6. LOAN PROGRAM--APPLICATIONS--AWARDS.--

          A. The division shall administer a program to make direct loans or loan subsidies and shall contract with one or more lending institutions for deposits to be used for the purpose of making or subsidizing loans to property owners for the restoration, rehabilitation or repair of eligible properties.

          B. The committee shall adopt a procedure for the priority ranking of applications and projects, both eligible and ineligible for federal funding assistance, for which loan or loan subsidy applications have been received by the division. The procedure shall be based on factors including geographic distribution of recipient projects, severity of deterioration of the eligible property, degree of architectural and construction detail in the loan application demonstrating the feasibility of the proposed restoration, rehabilitation or repair of the eligible property and availability of other funding for the project. All loans or loan subsidies from the fund shall be granted pursuant to the procedure and the procedure, shall be reviewed annually by the division and the committee.

          C. Loans or loan subsidies shall be made by the committee pursuant to the following criteria:

                (1) loans or loan subsidies from the fund shall be made only to property owners who:

                     (a) agree to repay the loan and to maintain the eligible property as restored, rehabilitated or repaired for the period specified in the loan but not less than five years;

                     (b) agree to maintain complete and proper financial records regarding the eligible property and to make these available to the division and the committee on request;

                     (c) agree to complete the proposed restoration, rehabilitation or repair work on the eligible property within twenty-four months from the date of loan approval by the committee;

                     (d) provide sufficient collateral security interest in the eligible property to the state in accordance with rules established by the committee;

                     (e)  meet the income eligibility criteria of the rules established by the committee;

                     (f)  demonstrate to the satisfaction of the division in accordance with rules established by the committee that the property owner has been denied a loan by at least two financial lenders for the same amount, for the same purpose and subject to the same general conditions as the loan that the property owner seeks to borrow from the fund;

                     (g)  submit conceptual design and business plans with respect to the use of the loan proceeds, prepared with the assistance of the local main street project organization, the state main street program or other professionals with experience in architecture, design or business and financial planning;

                     (h)  agree to all financial and other commitments, terms and conditions for the loan established by the division or the committee; and

                     (i)  agree to any restrictions on assignments of loans from the fund required by the committee or the division;

                (2) a loan shall be made for a period not to exceed five years with interest on the unpaid balance at a rate not greater than the yield at the time of loan approval on United States treasury bills with a maturity of three hundred sixty-five days plus one-half of one percent. A loan shall be repaid by the property owner in equal installments not less often than annually with the first installment due within one year of the date the loan is issued. If a property owner transfers ownership of the eligible property with respect to which a loan is made, all amounts outstanding under the loan shall become immediately due and payable and the property owner shall make a final interest payment on the principal amount due at a rate equal to the interest rate on the loan plus an additional one percent;

                (3) loans shall be made only for eligible costs. Eligible costs include architectural, design, graphic design, construction and engineering documents and planning costs, inspection of work in progress, contracted restoration, rehabilitation and repair costs and costs necessary to meet code requirements. Eligible costs do not include costs of land acquisition, legal costs or fiscal agents' fees; and

                (4) loans are not assignable.

          D. The division shall deposit in the fund all receipts from the repayment of loans made pursuant to the Main Street Revolving Loan Act.

     Section 7. APPROPRIATION.--One million dollars ($1,000,000) is appropriated from the general fund to the main street revolving loan fund for expenditure in fiscal year 2008 and subsequent fiscal years to make loans pursuant to the Main Street Revolving Loan Act. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not revert to the general fund.

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