2004 House Bill text for HB0575

HOUSE BILL 575

46th legislature - STATE OF NEW MEXICO - second session, 2004

INTRODUCED BY

Max Coll

AN ACT

RELATING TO THE NEW MEXICO FINANCE AUTHORITY; MAKING THE AUTHORITY A STATE AGENCY AND ITS FUNDS STATE TREASURY FUNDS.

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

Section 1. Section 6-21-2 NMSA 1978 (being Laws 1992, Chapter 61, Section 2, as amended) is amended to read:

"6-21-2. LEGISLATIVE FINDINGS--DECLARATION OF

PURPOSE.--

A. The legislature finds that:

(1) there are necessary state and local capital improvement and infrastructure needs that cannot be met with existing capital financing methods and funding sources;

(2) there is no coordinating entity or process for accomplishing long-term state and local capital planning, needs assessment or inventory of needs; setting priorities; and making more effective use of existing capital financing methods and funding sources;

(3) the uncertain nature of revenues available from the proceeds of severance tax bonds and other state and local revenues [have] has frustrated state and local government efforts to finance needed state and local capital projects; and

(4) in order to meet public capital and infrastructure needs, a central state mechanism to coordinate the planning and financing of public projects is necessary.

B. It is the purpose of the New Mexico Finance Authority Act to create a [governmental instrumentality] state agency to coordinate the planning and financing of state and local public projects, to provide for long-term planning and assessment of state and local capital needs and to improve cooperation among the executive and legislative branches of state government and local governments in financing public projects.

C. It is the further purpose of the New Mexico Finance Authority Act to provide financing for public projects in a manner that will not impair the capacity of the public project revolving fund to provide future financing to qualified entities for public projects. Funding shall not be provided from the public project revolving fund unless revenues in an amount sufficient to avoid a negative impact on the financing capacity of the public project revolving fund are contemporaneously pledged or dedicated for deposit to the public project revolving fund. Pursuant to Section 6-21-6.1 NMSA 1978, the authority may provide funding from the public project revolving fund for the purposes of the Wastewater Facility Construction Loan Act, the Rural Infrastructure Act, the Solid Waste Act or the Drinking Water State Revolving Loan Fund Act."

Section 2. Section 6-21-4 NMSA 1978 (being Laws 1992, Chapter 61, Section 4, as amended) is amended to read:

"6-21-4. NEW MEXICO FINANCE AUTHORITY CREATED-- MEMBERSHIP--QUALIFICATIONS--QUORUM--MEETINGS--COMPENSATION--BOND.--

A. [There is created a public body politic and corporate, separate and apart from the state, constituting a governmental instrumentality to be known as] The "New Mexico finance authority" is created as an adjunct state agency for the performance of essential public functions.

B. The authority shall be composed of twelve members. The state investment officer, the secretary of finance and administration, the secretary of economic development, the secretary of energy, minerals and natural resources, the secretary of environment, the executive director of the New Mexico municipal league and the executive director of the New Mexico association of counties or their designees shall be ex-officio members of the authority with voting privileges. The governor, with the advice and consent of the senate, shall appoint to the authority the chief financial officer of a state higher educational institution and four members who are residents of the state. The appointed members shall serve at the pleasure of the governor.

C. The appointed members of the authority shall be appointed to four-year terms. The initial members shall be appointed to staggered terms of four years or less, so that the term of at least one member expires on January 1 of each year. Vacancies shall be filled by appointment by the governor for the remainder of the unexpired term. Any member of the authority shall be eligible for reappointment.

D. Each appointed member before entering upon his duty shall take an oath of office to administer the duties of his office faithfully and impartially. A record of the oath shall be filed in the office of the secretary of state.

E. The governor shall designate an appointed member of the authority to serve as chairman. The authority shall elect annually one of its members to serve as vice chairman. The authority shall appoint and prescribe the duties of such other officers, who need not be members, as the authority deems necessary or advisable, including an executive director and a secretary, who may be the same person. The authority may delegate to one or more of its members, officers, employees or agents such powers and duties as it may deem proper and consistent with the New Mexico Finance Authority Act.

F. The executive director of the authority shall direct the affairs and business of the authority, subject to the policies, control and direction of the authority. The secretary of the authority shall keep a record of the proceedings of the authority and shall be custodian of all books, documents and papers filed with the authority, the minute book or journal of the authority and its official seal. The secretary shall make copies of all minutes and other records and documents of the authority and give certificates under the official seal of the authority to the effect that the copies are true copies, and all persons dealing with the authority may rely upon the certificates.

G. Meetings of the authority shall be held at the call of the chairman or whenever three members shall so request in writing. A majority of members then serving constitutes a quorum for the transaction of any business. The affirmative vote of at least a majority of a quorum present shall be necessary for any action to be taken by the authority. An ex-officio member may designate in writing another person to attend meetings of the authority and to the same extent and with the same effect act in his stead. No vacancy in the membership of the authority shall impair the right of a quorum to exercise all rights and perform all duties of the authority.

H. Each member of the authority shall give bond as provided in the Surety Bond Act. All costs of the surety bonds shall be borne by the authority.

I. [The authority is not created or organized, and its operations shall not be conducted, for the purpose of making a profit. No part of the revenues or assets of the authority shall benefit or be distributable to its members, officers or other private persons.] The members of the authority shall receive no compensation for their services, but shall be reimbursed for actual and necessary expenses at the same rate and on the same basis as provided for other public officers in the Per Diem and Mileage Act.

[J. The authority shall not be subject to the supervision or control of any other board, bureau, department or agency of the state except as specifically provided in the New Mexico Finance Authority Act. No use of the terms "state agency" or "instrumentality" in any other law of the state shall be deemed to refer to the authority unless the authority is specifically referred to in the law.

K. The authority is a governmental instrumentality for purposes of the Tort Claims Act.]"

Section 3. Section 6-21-5 NMSA 1978 (being Laws 1992, Chapter 61, Section 5, as amended) is amended to read:

"6-21-5. POWERS OF THE AUTHORITY.--The authority is granted all powers necessary and appropriate to carry out and effectuate its public and corporate purposes, including the following powers:

A. to sue or be sued;

B. to adopt and alter an official seal;

[C. to make and alter bylaws for its organization and internal management and to adopt, subject to the review and approval of the New Mexico finance authority oversight committee, such rules as are necessary and appropriate to implement the provisions of the New Mexico Finance Authority Act;

D. to appoint officers, agents and employees, prescribe their duties and qualifications and fix their compensation;

E.] C. to make, enter into and enforce all contracts, agreements and other instruments necessary, convenient or desirable in the exercise of the authority's powers and functions and for the purposes of the New Mexico Finance Authority Act;

[F.] D. to the extent allowed by law, to acquire, construct, hold, improve, grant mortgages of, accept mortgages of, sell, lease, convey or dispose of real and personal property for its public purposes;

[G.] E. to acquire, construct or improve real property, buildings and facilities for lease and to pledge rentals and other income received from such leases to the payment of bonds;

[H.] F. to make loans, leases and purchase securities and contract to make loans, leases and purchase securities;

[I.] G. to make grants to qualified entities to finance public projects; provided that such grants are not made from the public project revolving fund;

[J.] H. to procure insurance to secure payment on any loan, lease or purchase payments owed to the authority by a qualified entity in such amounts and from such insurers, including the federal government, as it may deem necessary or desirable and to pay any premiums for such insurance;

[K.] I. to fix, revise from time to time, charge and collect fees and other charges in connection with the making of loans, leases and any other services rendered by the authority;

[L.] J. to accept, administer, hold and use all funds made available to the authority from any sources;

[M.] K. to borrow money and to issue bonds and provide for the rights of the holders of the bonds;

[N.] L. to establish and maintain reserve and sinking fund accounts to insure against and have funds available for maintenance of other debt service accounts;

[O.] M. to invest and reinvest its funds and to take and hold property as security for the investment of such funds as provided in the New Mexico Finance Authority Act;

[P. to employ attorneys, accountants, underwriters, financial advisers, trustees, paying agents, architects, engineers, contractors and such other advisers, consultants and agents as may be necessary and to fix and pay their compensation;

Q.] N. to apply for and accept gifts or grants of property, funds, services or aid in any form from the United States, any unit of government or any person and to comply, subject to the provisions of the New Mexico Finance Authority Act, with the terms and conditions of the gifts or grants;

[R.] O. to maintain an office at any place in the state it may determine;

[S.] P. subject to any agreement with bondholders, to:

(1) renegotiate any loan, lease or agreement;

(2) consent to any modification of the terms of any loan, lease or agreement; and

(3) purchase bonds, which may upon purchase be canceled; and

[T.] Q. to do any and all things necessary or convenient to carry out its purposes and exercise the powers given and granted in the New Mexico Finance Authority Act."

Section 4. Section 6-21-6 NMSA 1978 (being Laws 1992, Chapter 61, Section 6, as amended) is amended to read:

"6-21-6. PUBLIC PROJECT REVOLVING FUND--PURPOSE--

ADMINISTRATION.--

A. The "public project revolving fund" is created [within the authority] in the state treasury. The fund shall be administered by the authority [as a separate account, but] and may consist of such subaccounts as the authority deems necessary to carry out the purposes of the fund. [The authority may establish procedures and adopt rules as required to administer the fund in accordance with the New Mexico Finance Authority Act.] Money in the fund is appropriated to the authority to carry out the purposes of the New Mexico Finance Authority Act. Expenditures from the fund shall be by warrants drawn by the secretary of finance and administration pursuant to vouchers signed by the executive director of the authority or his authorized representative.

B. Except as otherwise provided in the New Mexico Finance Authority Act, money from payments of principal of and interest on loans and payments of principal of and interest on securities held by the authority for public projects authorized specifically by law shall be deposited in the public project revolving fund. The fund shall also consist of any other money appropriated, distributed or otherwise allocated to the fund for the purpose of financing public projects authorized specifically by law.

C. Money appropriated to pay administrative costs, money available for administrative costs from other sources and money from payments of interest on loans or securities held by the authority, including payments of interest on loans and securities held by the authority for public projects authorized specifically by law, that represents payments for administrative costs shall not be deposited in the public project revolving fund and shall be deposited in a separate account of the authority and may be used by the authority to meet administrative costs of the authority.

D. Except as otherwise provided in the New Mexico Finance Authority Act, money in the public project revolving fund is appropriated to the authority to pay the reasonably necessary costs of originating and servicing loans, grants or securities funded by the fund and to make loans or grants and to purchase or sell securities to assist qualified entities in financing public projects in accordance with the New Mexico Finance Authority Act and pursuant to specific authorization by law for each project.

E. Money in the public project revolving fund not needed for immediate disbursement, including money held in reserve, may be deposited with the state treasurer for

short-term investment pursuant to Section 6-10-10.1 NMSA 1978 or may be invested in direct and general obligations of or obligations fully and unconditionally guaranteed by the United States, obligations issued by agencies of the United States, obligations of this state or any political subdivision of the state, interest-bearing time deposits, commercial paper issued by corporations organized and operating in the United States and rated "prime" quality by a national rating service, other investments permitted by Section 6-10-10 NMSA 1978 or as otherwise provided by the trust indenture or bond resolution, if money is pledged for or secures payment of bonds issued by the authority.

[F. The authority shall establish fiscal controls and accounting procedures that are sufficient to assure proper accounting for public project revolving fund payments, disbursements and balances.

G.] F. Money on deposit in the public project revolving fund may be used to make interim loans for a term not exceeding two years to qualified entities for the purpose of providing interim financing for any project approved or funded by the legislature.

[H.] G. Money on deposit in the public project revolving fund may be used to acquire securities or to make loans to qualified entities in connection with the equipment program. As used in this subsection, "equipment program" means the program of the authority designed to finance:

(1) the acquisition of equipment for:

(a) fire protection;

(b) law enforcement and protection;

(d) street and road construction and maintenance;

(e) emergency medical services;

(f) solid waste collection, transfer and disposal;

(g) radio and telecommunications; and

(h) utility system purposes; and

(2) the acquisition, construction and improvement of fire stations.

[I.] H. The amount of securities acquired from or the loan made to a qualified entity at any one time pursuant to Subsection [H] G of this section shall not exceed seven hundred fifty thousand dollars ($750,000). The authority shall either obtain specific authorization by law for the projects funded through the equipment program at a legislative session subsequent to the acquisitions of the securities or the making of loans or issue bonds within two years of the date the securities are acquired or within two years of the date on which the loans are made and use the bond proceeds to reimburse the public project revolving fund for the amounts temporarily used to acquire securities or to make loans. The temporarily funded projects under the equipment program are not required to obtain specific authorization by law required of projects permanently funded from the public project revolving fund, as provided in this section and Section 6-21-8 NMSA 1978.

[J.] I. Money on deposit in the public project revolving fund may be designated as a reserve for any bonds issued by the authority, including bonds payable from sources other than the public project revolving fund, and the authority may covenant in any bond resolution or trust indenture to maintain and replenish the reserve from money deposited in the public project revolving fund after issuance of bonds by the authority.

[K.] J. Money on deposit in the public project revolving fund may be used to purchase bonds issued by the authority, which are payable from any designated source of revenues or collateral. Purchasing and holding the bonds in the public project revolving fund shall not, as a matter of law, result in cancellation or merger of the bonds notwithstanding the fact that the authority as the issuer of the bonds is obligated to make the required debt service payments and the public project revolving fund held by the authority is entitled to receive the required debt service payments."

Section 5. Section 6-21-6.3 NMSA 1978 (being Laws 1999, Chapter 186, Section 2, as amended) is amended to read:

"6-21-6.3. WATER AND WASTEWATER PROJECT GRANT FUND--CREATION--ADMINISTRATION--PURPOSES.--

A. [There is created in the authority] The "water and wastewater project grant fund" [which] is created in the state treasury. The fund shall be administered by the authority. [The authority shall adopt, in accordance with the New Mexico Finance Authority Act, rules necessary to administer the fund.] Money in the fund is appropriated to the authority to carry out the purposes of the New Mexico Finance Authority Act. Expenditures from the fund shall be by warrants drawn by the secretary of finance and administration pursuant to vouchers signed by the executive director of the authority or his authorized representative.

B. The following shall be deposited directly into the water and wastewater project grant fund:

(1) the net proceeds from the sale of bonds issued pursuant to the provisions of Section 6-21-6.1 NMSA 1978 for the purposes of the water and wastewater project grant fund and payable from the public project revolving fund;

(2) money appropriated by the legislature to implement the provisions of this section; and

(3) any other public or private money dedicated to the fund.

C. Money in the water and wastewater project grant fund is appropriated to the authority to make grants to qualified entities for water or wastewater public projects pursuant to specific authorization by law for each project and to pay administrative costs of the water and wastewater project grant program.

D. The authority shall adopt rules governing the terms and conditions of grants made from the water and wastewater project grant fund. Except in the circumstances set forth in Subsection F of this section, grants may be made from the fund only with participation from the qualified entity in the form of a local match, which shall be determined by a sliding scale based on the qualified entity's financial capacity to pay a portion of the project from local resources. Grants from the water and wastewater project grant fund may be made only as all or part of financing for a complete project after the authority has determined that the financing for the complete project is cost effective.

E. The authority may make grants from the water and wastewater project grant fund to qualified entities for emergency public projects without specific authorization by law. Each emergency public project shall be designated as such by the authority prior to making the grant. The aggregate amount of grants for emergency public projects in fiscal years 2003, 2004 and 2005 shall not exceed six million dollars ($6,000,000) for each fiscal year. The aggregate amount of grants for emergency public projects in fiscal year 2006 and subsequent fiscal years shall not exceed three million dollars ($3,000,000) for each fiscal year.

F. To encourage consolidation of water or wastewater systems and to discourage proliferation of multiple water or wastewater systems, the authority may determine the local match requirement based on the financial capacity of:

(1) the residents of the geographic area benefiting from the improvements to be financed with the proceeds of the grant received on their behalf by the qualified entity; or

(2) the qualified entity benefiting from the improvements to be financed with the proceeds of the grant when the benefiting qualified entity agrees to consolidate with the qualified entity receiving the grant."

Section 6. Section 6-21-6.4 NMSA 1978 (being Laws 2002, Chapter 26, Section 2) is amended to read:

"6-21-6.4. WATER AND WASTEWATER PLANNING FUND--CREATION--ADMINISTRATION--PURPOSES.--

A. The "water and wastewater planning fund" is created [within the authority, which] in the state treasury. The fund shall be administered by the authority. [The authority shall adopt rules necessary to administer the fund.] Money in the fund is appropriated to the authority to carry out the purposes of the New Mexico Finance Authority Act. Expenditures from the fund shall be by warrants issued by the secretary of finance and administration on vouchers signed by the executive director of the authority or his authorized representative.

B. The following shall be deposited directly into the water and wastewater planning fund:

(1) the net proceeds from the sale of bonds issued pursuant to the provisions of Section 6-21-6.1 NMSA 1978 for the purposes of the water and wastewater planning fund and payable from the public project revolving fund;

(2) money appropriated by the legislature to implement the provisions of this section; and

(3) any other public or private money dedicated to the fund.

C. Money in the water and wastewater planning fund is appropriated to the authority to make grants to qualified entities to evaluate and to estimate the costs of implementing the most feasible alternatives for meeting water and wastewater public project needs and to pay administrative costs of the water and wastewater planning program.

D. The authority shall adopt rules governing the terms and conditions of grants made from the water and wastewater planning fund. Grants may be made from the fund only with the agreement of the qualified entity to reimburse the fund for the amount of the grant when financing from any source is subsequently received by the qualified entity for the water or wastewater public project.

E. The authority may make grants from the water and wastewater planning fund to qualified entities without specific authorization by law for each grant."

Section 7. Section 6-21-10 NMSA 1978 (being Laws 1992, Chapter 61, Section 10, as amended) is amended to read:

"6-21-10. PURCHASES IN NAME OF AUTHORITY--DOCUMENTATION.--

A. All tangible and intangible property, real and personal property and securities purchased, held or owned at any time by the authority shall at all times be purchased and held in the name of the [authority, or may be mortgaged, assigned or otherwise encumbered as security for the repayment of bonds issued by the authority] state.

B. All securities purchased at any time by the authority, upon delivery to the authority, shall be accompanied by all documentation required by the authority and shall include an approving opinion of recognized bond counsel, certification and guarantee of signatures and certification as to no litigation pending as of the date of delivery of the securities challenging the validity or issuance of such securities."

Section 8. Section 6-21A-4 NMSA 1978 (being Laws 1997, Chapter 144, Section 4, as amended) is amended to read:

"6-21A-4. FUND CREATED--ADMINISTRATION.--

A. [There is created in the authority a revolving loan fund to be known as] The "drinking water state revolving loan fund" [which] is created in the state treasury. The fund shall be administered by the authority. The authority [is authorized to] shall establish procedures required to administer the fund in accordance with the Safe Drinking Water Act and state laws. The authority and the department shall, whenever possible, coordinate application procedures and funding cycles with the New Mexico Community Assistance Act.

B. The following shall be deposited directly in the fund:

(1) grants from the federal government or its agencies allotted to the state for capitalization of the fund;

(2) funds as appropriated by the legislature to implement the provisions of the Drinking Water State Revolving Loan Fund Act or to provide state matching funds that are required by the terms of any federal grant under the Safe Drinking Water Act;

(3) loan principal, interest and penalty payments if required by the terms of any federal grant under the Safe Drinking Water Act;

(4) any other public or private money dedicated to the fund; and

(5) revenue transferred from other state revolving funds.

C. Expenditures from the fund shall be by warrants drawn by the secretary of finance and administration pursuant to vouchers signed by the executive director of the authority or his authorized representative. Money in the fund is appropriated for expenditure by the authority in a manner consistent with the terms and conditions of the federal capitalization grants and the Safe Drinking Water Act and may be used:

(1) to provide loans for the construction or rehabilitation of drinking water facilities;

(2) to buy or refinance the debt obligation of a local authority at an interest rate that is less than or equal to the market interest rate in any case in which a debt obligation is incurred after July 1, 1993;

(3) to guarantee or purchase insurance for obligations of local authorities to improve credit market access or reduce interest rates;

(4) to provide loan guarantees for similar revolving funds established by local authorities; and

(5) to provide a source of revenue or security for the repayment of principal and interest on bonds issued by the authority if the proceeds of the bonds are deposited in the fund or if the proceeds of the bonds are used to make loans to local authorities to the extent provided in the terms of the federal grant.

D. If needed to cover administrative expenses, pursuant to procedures established by the authority, the authority may impose and collect a fee from each local authority that receives financial assistance from the fund, which fee shall be used solely for the costs of administering the fund and which fee shall be kept outside the fund.

E. Money not currently needed for the operation of the fund or otherwise dedicated may be invested pursuant to the New Mexico Finance Authority Act and all interest earned on such investments shall be credited to the fund. Money remaining in the fund at the end of the fiscal year shall not revert to the general fund but shall accrue to the credit of the fund.

F. The authority shall [maintain full authority for the operation of] administer the fund in accordance with applicable federal and state law, including, in cooperation with the department, ensuring the loan recipients are on the state priority list or otherwise satisfy the Safe Drinking Water Act requirements.

G. The authority shall [establish fiscal controls and accounting procedures that are sufficient to assure proper accounting for fund payments, disbursements and balances and shall] provide, in cooperation with the department, a biannual report and an annual independent audit on the fund to the governor and to the United States environmental protection agency as required by the Safe Drinking Water Act."

Section 9. Section 6-21A-5 NMSA 1978 (being Laws 1997, Chapter 144, Section 5) is amended to read:

"6-21A-5. LOAN PROGRAM--ADMINISTRATION.--

A. The authority shall establish a program to provide financial assistance from the fund to local authorities, individually or jointly, for acquisition, construction or modification of drinking water facilities. The authority [is authorized to] may enter into [memoranda of understanding] joint powers agreements, contracts and other agreements to carry out the provisions of the Drinking Water State Revolving Loan Fund Act, including [but not limited to memoranda of understanding] joint powers agreements, contracts and agreements with federal agencies, the department, local authorities and other parties.

B. The department shall adopt, by [regulation] rule, a system for the ranking of drinking water facility construction projects [requesting] for which financial assistance is sought and for the development of a priority list [which will be] that is part of the annual intended use plan, as required by the Safe Drinking Water Act.

C. The department shall adopt [regulations] rules or internal procedures addressing the mechanism for the preparation of the annual intended use plan and the content of [such] the plan and shall prepare [such] the plan, with the assistance of the authority, as required by the Safe Drinking Water Act and the capitalization grant agreement. The department shall review all proposals for drinking water facility construction projects, including [but not limited to] project plans and specifications for compliance with the requirements of the Safe Drinking Water Act and the requirements of state laws and [regulations] rules governing the construction and operation of drinking water supply facilities. The department also shall determine whether a local authority has demonstrated adequate technical and managerial capability to operate the drinking water supply facility for its useful life in compliance with the requirements of the Safe Drinking Water Act and with the requirements of state laws and [regulations] rules governing the operation of drinking water supply facilities.

D. The department and the authority shall enter into [an] a joint powers agreement for the purpose of describing and allocating duties and responsibilities with respect to monitoring the construction of drinking water facility construction projects that have been provided financial assistance pursuant to the provisions of the Drinking Water State Revolving Loan Fund Act to ensure compliance with the requirements of the Safe Drinking Water Act and with the requirements of state laws and [regulations] rules governing construction and operation of drinking water supply facilities.

E. The department shall adopt [regulations] rules or internal procedures establishing the criteria and method for the distribution of annual capitalization grant funds between the fund and the nonproject activities (set-asides) allowed by the Safe Drinking Water Act and for the description in the intended use plan and annual report of the financial programmatic status of the nonproject activities (set-asides) allowed by the Safe Drinking Water Act.

F. The authority, with the assistance of the department, shall establish procedures to identify affordability criteria for a disadvantaged community and to extend a program to assist such communities.

G. The department shall set up separate accounts outside the fund to use for nonproject activities (set-asides) [activities] authorized under the Safe Drinking Water Act, Sections 1452 (g) and 1452 (k), and the authority shall set up a separate account outside the fund for administration of the fund. The department shall also provide the additional match for Safe Drinking Water Act, Section 1452 (g) (2) activities.

H. The department shall prepare and submit applications for capitalization grants to the United States environmental protection agency as required by the Safe Drinking Water Act."

Section 10. Section 72-4A-9 NMSA 1978 (being Laws 2001, Chapter 164, Section 9) is amended to read:

"72-4A-9. WATER PROJECT FUND--CREATED--PURPOSE.--

A. The "water project fund" is created in the [New Mexico finance authority] state treasury and shall consist of distributions made to the fund from the water trust fund and payments of principal of and interest on loans for approved water projects. The fund shall also consist of any other money appropriated, distributed or otherwise allocated to the fund for the purpose of supporting water projects [pursuant to] in accordance with the provisions of the Water Project Finance Act. The fund shall be administered by the authority. Income from investment of the water project fund shall be credited to the fund. Balances in the fund at the end of any fiscal year shall not revert to the general fund. The water project fund may consist of such subaccounts as the authority deems necessary to carry out the purposes of the fund. The authority may establish procedures and adopt rules as required to administer the fund and to recover from the fund costs of administering the fund and originating grants and loans. Money in the fund is appropriated to the authority to carry out the purposes of the Water Project Finance Act. Expenditures from the fund shall be by warrants drawn by the secretary of finance and administration pursuant to vouchers signed by the executive director of the authority or his authorized representative.

B. Money in the water project fund may be used to make loans or grants to qualified entities for any project approved by the legislature.

C. The authority [is authorized to] may issue revenue bonds payable from the proceeds of loan repayments made into the water project fund upon a determination by the authority that issuance of the bonds is necessary to replenish the principal balance of the fund. The net proceeds from the sale of the bonds shall be deposited in the water project fund. The bonds shall be authorized and issued by the authority in accordance with the provisions of the New Mexico Finance Authority Act."

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