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SPONSOR: |
Lujan |
DATE TYPED: |
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HB |
882/aHTRC |
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SHORT TITLE: |
Severance Tax Bonds for Water Projects |
SB |
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ANALYST: |
Kehoe |
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APPROPRIATION
Appropriation
Contained |
Estimated
Additional Impact |
Recurring or
Non-Rec |
Fund Affected |
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FY03 |
FY04 |
FY03 |
FY04 |
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See Narrative |
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(Parenthesis
( ) Indicate Expenditure Decreases)
LFC Files
SUMMARY
Synopsis
of HTRC Amendment
House Taxation and Revenue Committee Amendments
to House Bill 882 modify the bill as follows:
Synopsis
of Original Bill
House Bill 882
requires a certain percentage of annual severance tax bonding capacity to be
used for funding statewide water projects recommended by NMFA to the Water
Trust Board.
Significant
Issues
House Bill 882 requires that the Board of
Finance (BOF), by January 15 of each year, estimate the amount of bonding
capacity available for severance tax bonds to be authorized by the legislature
and that BOF deduct ten percent of the estimated bonding capacity for use by
the New Mexico Finance Authority (NMFA) to fund water projects statewide.
The Water Trust Board will select the projects
from a list of water projects provided by NMFA and will certify to BOF the need
for issuance of bonds for the water projects.
Proceeds from the sale of the bonds are appropriated to NMFA for funding
the approved water projects. House Bill
882 defines water projects as capital outlay 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.
House Bill 882 requires NMFA to recommend water
projects that are developed sufficiently so the Authority 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; and 2) spend at least eighty-five percent of the bond proceeds within
three years after the bonds have been sold.
FISCAL IMPLICATIONS
The appropriation
contained in this bill is an annual recurring expense to severance tax bond capacity.
Any unexpended or unencumbered balances remaining at the completion of a water
project shall revert to the severance tax bond fund. House Bill 882 specifically requires that
severance tax bond proceeds shall not be used to pay indirect project costs and
that the proceeds from bonds issued for a water project will revert to the
severance tax bond fund within six months of completion of the water
project. The bill requires NMFA to
monitor and ensure proper reversions.
OTHER SUBSTANTIVE ISSUES
Water-related funding
issues continue to dominate as one of the state’s most pressing needs. The Water Trust Board has identified over
$2.3 billion in regional and statewide water project needs. House Bill 882 would provide much needed
resources for the state’s water system needs.
LMK/yr