HOUSE BILL 25

57th legislature - STATE OF NEW MEXICO - first session, 2025

INTRODUCED BY

Miguel P. García

 

 

 

FOR THE LAND GRANT COMMITTEE

 

AN ACT

RELATING TO LAND GRANTS-MERCEDES; ENACTING THE LAND GRANT-MERCED INFRASTRUCTURE ACT; CREATING A TRUST FUND; MAKING APPROPRIATIONS.

 

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

     SECTION 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 6 of this act may be cited as the "Land Grant-Merced Infrastructure Act".

     SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Land Grant-Merced Infrastructure Act:

          A. "council" means the land grant council;

          B. "department" means the department of finance and administration;

          C. "infrastructure assistance" means providing grants on terms and conditions approved by the council;

          D. "land grant-merced" means a land grant that is designated as a political subdivision pursuant to Section 49-1-2 NMSA 1978;

          E. "project fund" means the land grant-merced infrastructure project fund;

          F. "qualified project" means a land grant-merced infrastructure project selected by the council for infrastructure assistance pursuant to the Land Grant-Merced Infrastructure Act; and

          G. "trust fund" means the land grant-merced infrastructure trust fund.

     SECTION 3. [NEW MATERIAL] COUNCIL--POWERS--DUTIES.--The council shall:

          A. in consultation with the department, adopt rules governing terms, conditions and priorities for providing infrastructure assistance to land grants-mercedes, including developing application and evaluation procedures and forms and qualifications for applicants and for projects;

          B. provide infrastructure assistance to land grants-mercedes for qualified projects on terms and conditions established by the council; and

          C. authorize funding for qualified projects, including:

                (1) planning, designing, constructing, improving, expanding or equipping water and wastewater facilities, major water systems, electrical power lines, communications infrastructure, roads, health infrastructure, emergency response facilities and infrastructure needed to encourage economic development;

                (2) developing engineering feasibility reports for infrastructure projects;

                (3) providing special engineering services;

                (4) completing environmental assessments or archaeological clearances and other surveys for infrastructure projects;

                (5) acquiring land, easements or rights of way; and

                (6) purchasing durable equipment.

     SECTION 4. [NEW MATERIAL] LAND GRANT-MERCED INFRASTRUCTURE TRUST FUND--CREATED--INVESTMENT--DISTRIBUTION.--

          A. The "land grant-merced infrastructure trust fund" is created as a nonreverting fund in the state treasury. The trust fund consists of money that is appropriated, donated or otherwise accrues to the trust fund. Money in the trust fund shall be invested by the state investment officer in the manner that land grant permanent funds are invested pursuant to Chapter 6, Article 8 NMSA 1978. Income from investment of the trust fund shall be credited to the trust fund. Money in the trust fund shall not be expended for any purpose, but an annual distribution from the trust fund shall be made to the project fund pursuant to this section.

          B. On July 1 of each year in which adequate money is available in the trust fund, an annual distribution shall be made from the trust fund to the project fund in the amount of eighteen million dollars ($18,000,000) until the distribution is less than an amount equal to four and seven-tenths percent of the average of the year-end market values of the trust fund for the immediately preceding five calendar years. Thereafter, the amount of the annual distribution shall be four and seven-tenths percent of the average of the year-end market values of the trust fund for the immediately preceding five calendar years.

     SECTION 5. [NEW MATERIAL] LAND GRANT-MERCED INFRASTRUCTURE PROJECT FUND--CREATED--PURPOSE--APPROPRIATIONS.--

          A. The "land grant-merced infrastructure project fund" is created in the state treasury, and:

                (1) the department, in consultation with the council, shall administer the project fund;

                (2) the project fund consists of:

                     (a) distributions made to the project fund from the trust fund;

                     (b) other money appropriated by the legislature or distributed or otherwise allocated to the project fund for the purpose of supporting qualified projects; and

                     (c) income from investment of the money in the project fund that shall be credited to the project fund;

                (3) balances in the project fund at the end of a fiscal year shall not revert to the trust fund or to the general fund; and

                (4) the project fund may consist of subaccounts as determined to be necessary by the department.

          B. The council may establish procedures and adopt rules as required to administer the project fund and to originate grants for qualified projects approved by the council.  

          C. Beginning in fiscal year 2026 and in subsequent fiscal years, the lesser of one percent of the project fund or fifty thousand dollars ($50,000) is appropriated from the project fund to the council for expenditure in the fiscal year in which it is appropriated to administer the project fund and applications to the fund. Any unexpended or unencumbered balance remaining at the end of any fiscal year shall revert to the project fund.

          D. The balance in the project fund not otherwise appropriated in this section is appropriated to the council for expenditure in fiscal year 2026 and in subsequent fiscal years to provide grants for qualified projects. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall revert to the project fund.

          E. Disbursements from the project fund shall be made by warrant of the secretary of finance and administration or the secretary's designee pursuant to vouchers signed by the chair of the council or the chair's designee.

     SECTION 6. [NEW MATERIAL] LEGISLATIVE OVERSIGHT--RULE REVIEW--REPORT.--

          A. Rules proposed by the council in consultation with the department pursuant to the Land Grant-Merced Infrastructure Act shall be reviewed by the appropriate legislative interim committee working on land grant-merced issues prior to approval.

          B. The appropriate legislative committee working on land grant-merced issues shall be briefed by the council on grant proposals submitted to the council and shall review, monitor and provide assistance and advice concerning grants proposed by the council.

          C. The council shall report to the appropriate legislative interim committee working on land grant-merced issues no later than October 1 of each year regarding the total expenditures from the project fund for the previous fiscal year, the purposes for which expenditures were made, an analysis of the progress of the projects funded and proposals for legislative action in the subsequent legislative session.

     SECTION 7. Section 7-27-10.1 NMSA 1978 (being Laws 2003, Chapter 134, Section 1, as amended) is amended to read:

     "7-27-10.1. TRANSFER TO SEVERANCE TAX PERMANENT FUND BEFORE DETERMINING BONDING CAPACITY--AUTHORIZATION FOR SEVERANCE TAX BONDS--PRIORITY FOR WATER, [PROJECTS AND] TRIBAL INFRASTRUCTURE AND LAND GRANT-MERCED INFRASTRUCTURE PROJECTS.--

          A. On December 31 of each year from 2019 through 2028, the division shall transfer twenty-three million six hundred ninety thousand dollars ($23,690,000) from the severance tax bonding fund to the severance tax permanent fund, unless the state board of finance determines that a lesser transfer amount is necessary pursuant to Section 7-27-8 NMSA 1978 to avoid a potential shortfall in debt service obligations.

          B. By January 15 of each year, the division shall estimate the amount of bonding capacity available for severance tax bonds to be authorized by the legislature based on the lesser of the following estimates:

                (1) an estimate that provides for equal annual issuances over the expected term of bonds with terms greater than one year anticipated to be issued by the state board of finance in the fiscal year in compliance with the requirements of Section 7-27-14 NMSA 1978; and

                (2) an estimate that provides that issuances for each year of that term shall be projected to result in stable levels of state tax supported debt relative to the median state debt ratios published by the national municipal bond rating agencies.

          C. The division shall allocate nine percent of the estimated bonding capacity each year for water projects, and the legislature authorizes the state board of finance to issue severance tax bonds in the annually allocated amount for use by the water trust board to fund water projects statewide. The water trust board shall certify to the state board of finance the need for issuance of bonds for water projects. The state board of finance may issue and sell the bonds in the same manner as other severance tax bonds in an amount not to exceed the authorized amount provided for in this subsection. If necessary, the state board of finance shall take the appropriate steps to comply with the federal Internal Revenue Code of 1986, as amended. Proceeds from the sale of the bonds are appropriated to the water project fund in the New Mexico finance authority for the purposes certified by the water trust board to the state board of finance.

          D. The division shall allocate four and one-half percent of the estimated bonding capacity for tribal infrastructure projects.

          E. The division shall allocate one and one-tenth percent of the estimated bonding capacity for land grant-merced infrastructure projects.

          [E.] F. The legislature authorizes the state board of finance to issue severance tax bonds in the amount provided for in this section for use by the tribal infrastructure board to fund tribal infrastructure projects. The tribal infrastructure board shall certify to the state board of finance the need for issuance of bonds for tribal infrastructure projects. The state board of finance may issue and sell the bonds in the same manner as other severance tax bonds in an amount not to exceed the authorized amount provided for in this section. If necessary, the state board of finance shall take the appropriate steps to comply with the [federal] Internal Revenue Code [of 1986, as amended]. Proceeds from the sale of the bonds are appropriated to the tribal infrastructure project fund for the purposes certified by the tribal infrastructure board to the state board of finance.

          G. The legislature authorizes the state board of finance to issue severance tax bonds in the amount provided for in this section for use by the land grant council to fund land grant-merced infrastructure projects. The land grant council shall certify to the state board of finance the need for issuance of bonds for land grant-merced infrastructure projects. The state board of finance may issue and sell the bonds in the same manner as other severance tax bonds in an amount not to exceed the authorized amount provided for in this section. If necessary, the state board of finance shall take the appropriate steps to comply with the Internal Revenue Code. Proceeds from the sale of the bonds are appropriated to the land grant-merced infrastructure project fund for the purposes certified by the land grant council to the state board of finance.

          [F.] H. Money from the severance tax bonds provided for in this section shall not be used to pay indirect project costs. Any unexpended balance from proceeds of severance tax bonds issued for a water, [project or a] tribal infrastructure or land grant-merced infrastructure project shall revert to the severance tax bonding fund within six months of completion of the project. The New Mexico finance authority shall monitor and ensure proper reversions of the bond proceeds appropriated for water projects, and the department of finance and administration shall monitor and ensure proper reversions of the bond proceeds appropriated for tribal and land grant-merced infrastructure projects.

          [G.] I. As used in this section:

                (1) "division" means the board of finance division of the department of finance and administration;

                (2) "land grant-merced infrastructure project" means a qualified project pursuant to the Land Grant-Merced Infrastructure Act;

                [(2)] (3) "tribal infrastructure project" means a qualified project under the Tribal Infrastructure Act; and

                [(3)] (4) "water project" means a capital outlay project for:

                     (a) the storage, conveyance or delivery of water to end users;

                     (b) the implementation of federal Endangered Species Act of 1973 collaborative programs;

                     (c) the restoration and management of watersheds;

                     (d) flood prevention; or

                     (e) conservation, recycling, treatment or reuse of water."

     SECTION 8. APPROPRIATION.--Twenty million dollars ($20,000,000) is appropriated from the general fund to the land grant-merced infrastructure trust fund for expenditure in fiscal year 2026 and subsequent fiscal years pursuant to the Land Grant-Merced Infrastructure Act to implement the provisions of that 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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