46th legislature - STATE OF NEW MEXICO - first session, 2003

RELATING TO WATER PROJECTS; REQUIRING A PERCENTAGE OF ANNUAL SEVERANCE TAX BONDING CAPACITY TO BE USED TO FUND WATER PROJECTS STATEWIDE; MAKING AN APPROPRIATION.

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

Section 1. A new section of the Severance Tax Bonding Act is enacted to read:

"[NEW MATERIAL] BONDING CAPACITY--AUTHORIZATION FOR SEVERANCE TAX BONDS--WATER PROJECTS PRIORITY.--

A. By January 15 of each year, the board of finance division of the department of finance and administration shall estimate the amount of bonding capacity available for severance tax bonds to be authorized by the legislature. The division shall deduct ten percent of the estimated bonding capacity for use by the New Mexico finance authority to fund water projects statewide.

B. The water trust board shall select water projects from the list of recommended water projects provided by the New Mexico finance authority and shall certify to the state board of finance the need for issuance of bonds for the 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 amount of allowable capacity provided for in Subsection A of this section. Proceeds from the sale of the bonds are appropriated to the New Mexico finance authority for the purposes certified to the state board of finance.

C. The New Mexico finance authority shall recommend to the water trust board those water projects that are developed sufficiently so the authority reasonably expects that the recipient will:

(1) incur a substantial binding obligation to a third party to expend at least five percent of the bond proceeds for the water project; and

(2) spend at least eighty-five percent of the bond proceeds within three years after the bonds have been sold.

D. 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 shall revert to the severance tax bonding fund within six months of completion of the water project. The New Mexico finance authority shall monitor and ensure proper reversions.

E. As used in this section, "water project" means a capital outlay project for:

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

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

(3) the restoration of watersheds; or

(4) flood prevention."