HOUSE BILL 474

51st legislature - STATE OF NEW MEXICO - first session, 2013

INTRODUCED BY

Sharon Clahchischilliage

AN ACT

RELATING TO THE NEW MEXICO FINANCE AUTHORITY; ALLOWING THE AUTHORITY TO PARTICIPATE IN LOANS UNDER THE PUBLIC PROJECT FINANCE PROGRAM.

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

     SECTION 1. 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. "bank":

                (1) means:

                     (a) any state or national bank engaged in the business of receiving deposits, other than trust funds, which deposits are insured by the federal deposit insurance corporation in accordance with the Federal Deposit Insurance Act; or

                     (b) an institution organized under the laws of this state, the laws of the United States, any state of the United States, the District of Columbia, any territory of the United States, Puerto Rico, Guam, American Samoa or the Virgin Islands that accepts deposits that the depositor may withdraw by check or similar means for payment to third parties and is engaged in the business of making commercial loans; and

                (2) excludes an entity operating under Section 25 or 25a of the Federal Reserve Act, an entity that does not conduct business within the United States, a credit union or a savings and loan association organized under the laws of this state, the laws of the United States, any state of the United States, the District of Columbia, any territory of the United States, Puerto Rico, Guam, American Samoa or the Virgin Islands;

          [B.] C. "bond" means any bonds, notes, certificates of participation or other evidence of indebtedness;

          [C.] D. "bondholder" or "holder" means a person who is the owner of a bond, whether registered or not;

          [D.] E. "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.] F. "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.] G. "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.] H. "security" or "securities", unless the context indicates otherwise, means bonds, notes, certificates or other evidence of indebtedness or loan participation 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."

     SECTION 2. 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.--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 authorized pursuant to other provisions of the New Mexico Finance Authority Act. The authority may:

          A. make loans to qualified entities that establish one or more dedicated sources of revenue to repay the loan from the authority;

          B. participate in a loan originated by a bank to a qualified entity; provided that:

                (1) the qualified entity provides documentation of one or more dedicated sources of revenue with which the qualified entity shall repay the loan;

                (2) the portion of the loan representing the participation of the authority is guaranteed by the United States department of agriculture, the bureau of Indian affairs of the United States department of the interior, the United States small business administration or other federal agency; and

                (3) the collateral position of the authority, in the event of default by a qualified entity, shall be superior to or equal to the collateral position of the bank that originates the loan;

          [B.] C. make, enter into and enforce all contracts necessary, convenient or desirable for the purposes of the authority or pertaining to:

                (1) a loan to a qualified entity;

                (2) a grant to a qualified entity from money available to the authority except money in the public project revolving fund;

                (3) a purchase or sale of securities individually or on a pooled basis; [or]

                (4) participation in a loan originated by a bank to a qualified entity; or

                [(4)] (5) the performance of its duties and execution of its powers under the New Mexico Finance Authority Act;

          [C.] D. 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 or the bank, and sell securities acquired or held by it at prices without relation to cost and in a manner the authority considers advisable;

          [D.] E. prescribe the form of application or procedure required of a qualified entity or a bank for a loan, a loan participation or a purchase of [its] securities, fix the terms and conditions of the loan, the loan participation or the purchase of securities and enter into [agreements] an agreement with a qualified [entities] entity with respect to [loans or purchases] a loan, a loan participation or a purchase of securities;

          [E.] F. 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.] G. fix and establish terms and provisions with respect to:

                (1) a purchase of securities by the authority, including date and maturities of the securities;

                (2) redemption or payment before maturity; and

                (3) any other matters that in connection with the purchase are necessary, desirable or advisable in the judgment of the authority;

          [G.] H. 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.] I. 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.] J. 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.] K. in the event of default by a qualified entity or a bank, enforce its rights by suit or mandamus against a qualified entity, a bank or a guarantor of any indebtedness or [may] use all other available remedies under state or federal law."

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