NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

Only the most recent FIR version, excluding attachments, is available on the Intranet. Previously issued FIRs and attachments may be obtained from the LFC office in Suite 101 of the State Capitol Building North.

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to HB 66

SOURCES OF INFORMATION

New Mexico Finance Authority

LFC Files

SUMMARY

Synopsis of SFl#1 Amendment

Senate Floor Amendment #1 adds the Cumberland Water System water project to the list of projects eligible for a loan from the Public Project Revolving Fund, changes the spelling of "Cundjo" to "Cundiyo."

     Synopsis of HTRC Amendment

House Taxation and Revenue Committee amendments to House Bill 65 include the following:

• •Item 1 authorizes the NMFA to make a loan to either the Ramah Chapter or to the Navajo Nation for a water project;
• •Item 2 authorizes the NMFA to make a loan for both a water project and a building project in Ruidoso;
• •Item 3 authorizes the NMFA to make a loan to Tucumcari for a water and wastewater project and a street project;
• •Item 4 is a non-substantive technical amendment; and
• •Item 5 gives the NMFA authority to make loans to the following eligible entities for their projects:

• Angel Fire, Eagle Nest, Red River, Taos, Taos County intergovernmental council or all or any of these entities for regional solid waste projects;
• Desert Sand mutual domestic water consumers association for a water project;
• Guadalupe soil and water conservation district for an infrastructure project;
• Mountainair for a wastewater project;
• Rio Rancho for a water project; and
• Tierra Amarilla mutual domestic water consumers association for a water project.

Synopsis of Original Bill

House Bill 65 authorizes the NMFA to make loans for statewide infrastructure projects from the Public Project Revolving Fund (PPRF); requires entities to certify to the Authority by 2003 if they are going to pursue a loan from the Public Project Revolving Fund; and contains a provision that allows funds on deposit in the PPRF to be used to purchase loans previously financed from the Certificate of Participation (COP).

Significant Issues

Section l, Subsections A. through XXXXX., lists the projects and entities requiring legislative authority to make loans from the PPRF. Loans from the PPRF benefit eligible entities by allowing them to borrow for infrastructure projects at below market costs, based on terms and conditions established by the NMFA. The authorization provided in House Bill 65 does not guarantee that those projects will receive an NMFA loan. Loans will be made to entities that can identify a sufficient revenue source for repayment of a loan, and are able to meet other financial criteria established by the Authority.

Section 2 voids legislative authorization if a qualified entity does not notify the Authority by the end of fiscal year 2003 of its desire to continue to pursue a loan from NMFA.

Section 3 contains a provision that allows funds on deposit in the PPRF to be used to purchase loans financed previously from the Certificate of Participation (Series 1994A, 1995A, 1996A, and 1996B) According to NMFA, this provision will enable NMFA to save on the cost of servicing the COPs and will also reduce NMFA's and the borrower's workload and cost associated to annual disclosure on the loans for the projects listed in Section 3.

Section 4 contains an emergency clause.

CONFLICT/DUPLICATION/COMPANIONSHIP/RELATIONSHIP

No duplication at this time; however, it should be noted that governmental entities sometimes approach legislators to seek capital outlay funding for the same projects. This bill relates to HB66.

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