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AN ACT

RELATING TO ELECTRIC POWER; ENACTING THE NEW MEXICO RENEWABLE

ENERGY TRANSMISSION AUTHORITY ACT; CREATING THE NEW MEXICO

RENEWABLE ENERGY TRANSMISSION AUTHORITY; PROVIDING, UNDER

CERTAIN CIRCUMSTANCES, FOR THE FINANCING OR THE PLANNING,

ACQUISITION, MAINTENANCE AND OPERATION OF CERTAIN ELECTRIC

TRANSMISSION FACILITIES BY THE AUTHORITY; PROVIDING GROSS

RECEIPTS TAX DEDUCTIONS FOR CERTAIN RECEIPTS RELATING TO

ELECTRIC TRANSMISSION PROJECTS; PROVIDING A COMPENSATING TAX

DEDUCTION FOR THE VALUE OF CERTAIN EQUIPMENT INSTALLED AS PART

OF ELECTRIC TRANSMISSION PROJECTS; PROVIDING FOR THE ISSUANCE

OF RENEWABLE ENERGY TRANSMISSION BONDS; MAKING AN

APPROPRIATION.

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

Section 1. SHORT TITLE.--Sections 1 through 15 of this

act may be cited as the "New Mexico Renewable Energy

Transmission Authority Act".

Section 2. DEFINITIONS.--As used in the New Mexico

Renewable Energy Transmission Authority Act:

A. "acquire" means to obtain eligible facilities

by lease, construction, reconstruction or purchase;

B. "authority" means the New Mexico renewable

energy transmission authority;

C. "bonds" means renewable energy transmission

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bonds and includes notes, warrants, bonds, temporary bonds and

anticipation notes issued by the authority;

D. "eligible facilities" means facilities to be

financed or acquired by the authority, in which, within one

year after beginning the transmission or storage of any

electricity, and thereafter, at least thirty percent of the

electric energy, as estimated by the authority, originates

from renewable energy sources;

E. "facilities" means electric transmission and

interconnected storage facilities and all related structures,

properties and supporting infrastructure, including any

interests therein;

F. "finance" or "financing" means the lending of

bond proceeds by the authority to a public utility or other

private person for the purpose of planning, acquiring,

operating and maintaining eligible facilities in whole or in

part by that public utility or other private person;

G. "project" means an undertaking by the authority

to finance or plan, acquire, maintain and operate eligible

facilities located in part or in whole within the state of New

Mexico;

H. "public utility" means a public electric

utility regulated by the public regulation commission pursuant

to the Public Utility Act and municipal utilities exempt from

public regulation commission regulation pursuant to

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Section 62-6-4 NMSA 1978 that own or operate facilities;

I. "renewable energy" means electric energy:

(1) generated by use of low- or zero-

emissions generation technology with substantial long-term

production potential; and

(2) generated by use of renewable energy

resources that may include:

(a) solar, wind, hydropower and

geothermal resources;

(b) fuel cells that are not fossil

fueled; or

(c) biomass resources, such as

agriculture or animal waste, small diameter timber, salt cedar

and other phreatophyte or woody vegetation removed from river

basins or watersheds in New Mexico, landfill gas and

anaerobically digested waste biomass; but

(3) does not include electric energy

generated by use of fossil fuel or nuclear energy; and

J. "storage" means energy storage technologies

that convert, store and return electricity to help alleviate

disparities between electricity supply and demand, to

facilitate the dispatching of electricity or to increase

economic return on the sale of electricity.

Section 3. NEW MEXICO RENEWABLE ENERGY TRANSMISSION

AUTHORITY CREATED--ORGANIZATION.--

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A. The "New Mexico renewable energy transmission

authority" is created as a public body, politic and corporate,

separate and apart from the state, constituting a governmental

instrumentality for the performance of essential public

functions.

B. The authority shall be composed of seven

members as follows:

(1) three members appointed by the governor

with the advice and consent of the senate. The initial

appointees shall be appointed for staggered terms of one, two

and three years; thereafter the members shall be appointed for

three-year terms;

(2) the state investment officer or the

state investment officer's designee;

(3) the state treasurer or the state

treasurer's designee;

(4) one member appointed by the speaker of

the house of representatives who shall serve at the pleasure

of the speaker of the house; and

(5) one member appointed by the president

pro tempore of the senate who shall serve at the pleasure of

the president pro tempore.

C. The qualifications of the members shall be as

follows:

(1) one member appointed by the governor

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shall have expertise in financial matters involving the

financing of major electrical transmission projects;

(2) the other four appointed members shall

have:

(a) special knowledge of the public

utility industry, as evidenced by college degrees or by

experience, at least five years of which must be with the

public utility industry; and

(b) knowledge of renewable energy

development; and

(3) no member shall represent a person that

owns or operates facilities.

D. The members initially appointed by the speaker

of the house and the president pro tempore of the senate

shall, by lot, determine one to have an initial term of two

years and one to have an initial term of four years;

thereafter, the appointments will be for staggered terms of

four years.

E. In addition to the seven voting members, the

secretary of energy, minerals and natural resources shall

serve as an ex-officio nonvoting member of the authority.

F. The governor shall designate an appointed

member of the authority to serve as chair, and the authority

may elect annually such other officers as it deems necessary.

G. The authority shall meet at the call of the

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chair or whenever four members shall so request in writing. A

majority of members then serving constitutes a quorum for the

transaction of business, but the affirmative vote of at least

four members is necessary for any action to be taken by the

authority.

H. The authority is not created or organized and

its operations are not conducted for the purpose of making a

profit, but it is expected to recover the costs of operating

the authority. 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 the public members shall be reimbursed for actual and

necessary expenses at the same rate and on the same basis as

provided for public officers in the Per Diem and Mileage Act.

I. The authority is not 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

Renewable Energy Transmission 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.

J. The authority is a governmental instrumentality

for purposes of the Tort Claims Act.

Section 4. AUTHORITY--DUTIES AND POWERS.--

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A. The authority shall:

(1) do any and all things necessary or

proper to accomplish the purposes of the New Mexico Renewable

Energy Transmission Authority Act;

(2) hire an executive director and such

other employees or other agents as it deems necessary for the

performance of its powers and duties, including consultants,

financial advisors and legal advisors, and prescribe the

powers and duties and fix the compensation of the employees

and agents. 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; and

(3) maintain such records and accounts of

revenues and expenditures as required by the state auditor.

The state auditor or the state auditor's designee shall

conduct an annual financial and legal compliance audit of the

accounts of the authority and file copies with the governor

and the legislature.

B. The authority may:

(1) make and execute agreements, contracts

and other instruments necessary or convenient in the exercise

of its powers and functions with any person or governmental

agency;

(2) enter into contractual agreements with

respect to one or more projects upon the terms and conditions

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the authority considers advisable;

(3) utilize the services of executive

departments of the state upon mutually agreeable terms and

conditions;

(4) enter into partnerships with public or

private entities;

(5) identify and establish corridors for the

transmission of electricity within the state;

(6) through participation in appropriate

regional transmission forums, coordinate, investigate, plan,

prioritize and negotiate with entities within and outside the

state for the establishment of interstate transmission

corridors;

(7) pursuant to Subsection C of this

section, finance or plan, acquire, maintain and operate

eligible facilities necessary or useful for the accomplishment

of the purposes of the New Mexico Renewable Energy

Transmission Authority Act;

(8) pursuant to the provisions of the

Eminent Domain Code, exercise the power of eminent domain for

acquiring property or rights of way for public use if needed

for projects if such action does not involve taking utility

property or does not materially diminish electric service

reliability of the transmission system in New Mexico, as

determined by the public regulation commission;

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(9) receive by gift, grant, donation or

otherwise, any sum of money, aid or assistance from the United

States, the state of New Mexico, any other state, any

political subdivision or any other public or private entity;

(10) for any project, provide information

and training to employees of the project regarding any unique

hazards that may be posed by the project, as well as training

in safety work practices and emergency procedures;

(11) issue bonds pursuant to the New Mexico

Renewable Energy Transmission Authority Act as necessary to

undertake a project;

(12) enter into contracts for the lease and

operation by the authority of eligible facilities owned by a

public utility or other private person;

(13) enter into contracts for leasing

eligible facilities owned by the authority, provided that any

revenue derived pursuant to the lease shall be deposited in

the renewable energy transmission bonding fund;

(14) collect payments of reasonable rates,

fees, interest or other charges from persons using eligible

facilities to finance eligible facilities and for other

services rendered by the authority, provided that any revenue

derived from payments made to the authority shall be deposited

in the renewable energy transmission bonding fund;

(15) borrow money necessary to carry out the

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purposes of the New Mexico Renewable Energy Transmission

Authority Act and mortgage and pledge any leases, loans or

contracts executed and delivered by the authority;

(16) sue and be sued; and

(17) adopt such reasonable administrative

and procedural rules as may be necessary or appropriate to

carry out its powers and duties.

C. Except as provided in this subsection, the

authority shall not enter into any project if public utilities

or other private persons are performing the acts, are

constructing or have constructed the facilities, or are

providing the services contemplated by the authority, and are

willing to provide funds for and own new infrastructure to

meet an identified need and market. Before entering into a

project, the following procedures shall be implemented:

(1) the authority shall provide to each

public utility and the public regulation commission and

publish one time in a newspaper of general circulation in New

Mexico and one time in a newspaper in the area where the

eligible facilities are contemplated and on a publicly

accessible web page maintained by the authority, an initial

notice describing the project that the authority is

contemplating, including a detailed description of the

existing or anticipated renewable energy sources that justify

the determination by the authority that the project facilities

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are eligible facilities. The description shall contain, at a

minimum, the names of all persons that already are or will

develop the renewable energy sources, all persons that will

own the renewable energy sources and the peak output capacity,

source type, location and anticipated connection date of the

renewable energy sources;

(2) any person with an interest that may be

affected by the proposed project shall have thirty days from

the date of the last publication of the initial notice to

challenge, in writing, the determination by the authority that

the facilities are eligible facilities. If a challenge is

received by the authority within the thirty days, the

authority shall hold a public hearing no sooner than thirty

days after receiving the challenge and after a minimum of two

weeks notice in the same newspapers and web page in which the

initial notice was given. Following the public hearing, the

authority shall make a final determination of eligibility and

give notice of the determination pursuant to Section 39-3-1.1

NMSA 1978. Any person or governmental entity participating in

the hearing may appeal the final determination by filing a

notice of appeal with the district court pursuant to

Section 39-3-1.1 NMSA 1978;

(3) public utilities and other persons

willing and able to provide money for, acquire, maintain and

operate the eligible facilities described in the notice shall

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have the following time period to notify the authority of

intention and ability to provide money for, acquire, maintain

and operate the eligible facilities described in the notice:

(a) within ninety days of the date of

the last publication of the initial notice if no challenge is

received pursuant to Paragraph (2) of this subsection; or

(b) within ninety days of the date of

the notice of determination if a challenge is received

pursuant to Paragraph (2) of this subsection; and

(4) in the absence of notification by a

public utility or other person pursuant to Paragraph (3) of

this subsection, or if a person, having given notice of

intention to provide money for, acquire, maintain and operate

the eligible facilities contemplated by the authority, fails

to make a good faith effort to commence the same within twelve

months from the date of notification by the authority of its

intention, the authority may proceed to finance or plan,

acquire, maintain and operate the eligible facilities

originally contemplated, provided that a person that, within

the time required, has made necessary applications to acquire

federal, state, local or private permits, certificates or

other approvals necessary to acquire the eligible facilities

shall be deemed to have commenced the same as long as the

person diligently pursues the permits, certificates or other

approvals.

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D. In soliciting and entering into contracts for

the transmission or storage of electricity, the authority and

any person leasing or operating eligible facilities financed

or acquired by the authority shall, if practical, give

priority to those contracts that will transmit or store

electricity to be sold and consumed in New Mexico.

E. The authority and any eligible facilities

acquired by the authority are not subject to the supervision,

regulation, control or jurisdiction of the public regulation

commission; provided that nothing in this subsection shall be

interpreted to allow a public utility to include the cost of

using eligible facilities in its rate base without the

approval of the public regulation commission.

F. In exercising its powers and duties, the

authority shall not own or control facilities unless:

(1) the facilities are leased to or held for

lease or sale to a public utility or such other person

approved by the public regulation commission;

(2) the operation, maintenance and use of

the facilities are vested by lease or other contract in a

public utility or such other person approved by the public

regulation commission;

(3) the facilities are owned or controlled

for a period of not more than one hundred eighty days after

termination of a lease or contract described in Paragraph (1)

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or (2) of this subsection or after the authority gains

possession of the facilities following a breach of such a

lease or contract or as a result of bankruptcy proceedings; or

(4) the facilities do not affect in-state

retail rates or electric service reliability.

G. A public utility subject to regulation of the

public regulation commission pursuant to the Public Utility

Act may recover the capital cost of a project undertaken

pursuant to the New Mexico Renewable Energy Transmission

Authority Act from its retail customers only if the project

has received a certificate of public convenience and necessity

from the public regulation commission. A municipal utility

exempt from regulation of the public regulation commission may

recover such costs only if the project has been approved by

the governing body of the municipality. Costs associated with

a project undertaken pursuant to the New Mexico Renewable

Energy Transmission Authority Act are not recoverable from

retail utility customers except to the extent the costs are

prudently incurred and the project is used and useful in

serving those customers as determined by the public regulation

commission.

Section 5. RENEWABLE ENERGY TRANSMISSION BONDS--

APPROPRIATION OF PROCEEDS.--

A. The authority is authorized to issue and sell

revenue bonds, known as "renewable energy transmission bonds",

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payable solely from the renewable energy transmission bonding

fund, in compliance with the New Mexico Renewable Energy

Transmission Authority Act, for the purpose of entering into a

project when the authority determines that the project is

needed.

B. The net proceeds from the bonds are

appropriated to the authority for the purpose of financing or

acquiring eligible facilities.

Section 6. RENEWABLE ENERGY TRANSMISSION BONDING FUND

CREATED--MONEY IN THE FUND PLEDGED.--

A. The "renewable energy transmission bonding

fund" is created in the state treasury. The fund shall

consist of revenues received by the authority from operating

or leasing eligible facilities, fees and service charges

collected, and, if the authority has provided financing for

eligible facilities, money from payments of principal and

interest on loans. Earnings of the fund shall be credited to

the fund. Balances in the fund at the end of any fiscal year

shall remain in the fund, except as provided in this section.

B. Money in the renewable energy transmission

bonding fund is pledged for the payment of principal and

interest on all bonds issued pursuant to the New Mexico

Renewable Energy Transmission Authority Act. Money in the

fund is appropriated to the authority for the purpose of

paying debt service, including redemption premiums, on the

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bonds and the expenses incurred in the issuance, payment and

administration of the bonds.

C. On the last day of January and the last day of

July of each year, the authority shall estimate the amount

needed to make debt service and other payments during the next

twelve months from the renewable energy transmission bonding

fund on the bonds plus the amount that may be needed for any

required reserves. The authority shall transfer to the

renewable energy transmission authority operational fund any

balance in the renewable energy transmission bonding fund

above the estimated amounts.

D. Bonds issued pursuant to the New Mexico

Renewable Energy Transmission Authority Act shall be payable

solely from the renewable energy transmission bonding fund or,

with the approval of the bondholders, such other special funds

as may be provided by law and do not create an obligation or

indebtedness of the state within the meaning of any

constitutional provision. No breach of any contractual

obligation incurred pursuant to that act shall impose a

pecuniary liability or a charge upon the general credit or

taxing power of the state, and the bonds are not general

obligations for which the state's full faith and credit is

pledged.

E. The state does hereby pledge that the renewable

energy transmission bonding fund shall be used only for the

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purposes specified in this section and pledged first to pay

the debt service on the bonds issued pursuant to the New

Mexico Renewable Energy Transmission Authority Act. The state

further pledges that any law requiring the deposit of revenues

in the renewable energy transmission bonding fund or

authorizing expenditures from the fund shall not be amended or

repealed or otherwise modified so as to impair the bonds to

which the renewable energy transmission bonding fund is

dedicated as provided in this section.

Section 7. AUTHORITY TO REFUND BONDS.--The authority

may issue and sell at public or private sale bonds to refund

outstanding renewable energy transmission bonds by exchange,

immediate or prospective redemption, cancellation or escrow,

including the escrow of debt service funds accumulated for

payment of outstanding bonds, or any combination thereof,

when, in its opinion, such action will be beneficial to the

state.

Section 8. RENEWABLE ENERGY TRANSMISSION BONDS--FORM--

EXECUTION.--

A. The authority, except as otherwise specifically

provided in the New Mexico Renewable Energy Transmission

Authority Act, shall determine at its discretion the terms,

covenants and conditions of the bonds, including, but not

limited to, date of issue, denominations, maturities, rate or

rates of interest, call features, call premiums, registration,

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refundability and other covenants covering the general and

technical aspects of the issuance of the bonds.

B. The bonds shall be in such form as the

authority may determine, and successive issues shall be

identified by alphabetical, numerical or other proper series

designation.

C. Bonds shall be signed and attested by the

executive director of the authority and shall be executed with

the facsimile signature of the chair of the authority and the

facsimile seal of the authority, except for bonds issued in

book entry or similar form without the delivery of physical

securities. Any interest coupons attached to the bonds shall

bear the facsimile signature of the executive director of the

authority, which officer, by the execution of the bonds, shall

adopt as the executive director's own signature the facsimile

thereof appearing on the coupons. Except for bonds issued in

book entry or similar form without the delivery of physical

securities, the Uniform Facsimile Signature of Public

Officials Act shall apply, and the authority shall determine

the manual signature to be affixed on the bonds.

Section 9. PROCEDURE FOR SALE OF RENEWABLE ENERGY

TRANSMISSION BONDS.--

A. Bonds shall be sold by the authority at such

times and in such manner as the authority may elect, either at

private sale for a negotiated price or to the highest bidder

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at public sale for cash at not less than par and accrued

interest.

B. In connection with any public sale of the

bonds, the authority shall publish a notice of the time and

place of sale in a newspaper of general circulation in the

state and also in a recognized financial journal outside the

state. The publication shall be made once each week for two

consecutive weeks prior to the date fixed for such sale, the

last publication to be two business days prior to the date of

sale. The notice shall specify the amount, denomination,

maturity and description of the bonds to be offered for sale

and the place, day and hour at which sealed bids therefore

shall be received. All bids, except those of the state, shall

be accompanied by a deposit of two percent of the principal

amount of the bonds. Deposits of unsuccessful bidders shall

be returned upon rejection of the bid. At the time and place

specified in such notice, the authority shall open the bids in

public and shall award the bonds, or any part thereof, to the

bidder or bidders offering the best price. The authority may

reject any or all bids and readvertise.

C. The authority may sell a bond issue, or any part

thereof, to the state or to one or more investment bankers or

institutional investors at private sale.

Section 10. NEW MEXICO RENEWABLE ENERGY TRANSMISSION

AUTHORITY ACT IS FULL AUTHORITY FOR ISSUANCE OF BONDS--BONDS

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ARE LEGAL INVESTMENTS.--

A. The New Mexico Renewable Energy Transmission

Authority Act is, without reference to any other act of the

legislature, full authority for the issuance and sale of

renewable energy transmission bonds, which bonds shall have

all the qualities of investment securities under the Uniform

Commercial Code and shall not be invalid for any irregularity

or defect or be contestable in the hands of bona fide

purchasers or holders thereof for value.

B. The bonds are legal investments for any person

or board charged with the investment of any public funds and

are acceptable as security for any deposit of public money.

Section 11. SUIT MAY BE BROUGHT TO COMPEL PERFORMANCE

OF OFFICERS.--Any holder of bonds or any person or officer

being a party in interest may sue to enforce and compel the

performance of the provisions of the New Mexico Renewable

Energy Transmission Authority Act.

Section 12. RENEWABLE ENERGY TRANSMISSION BONDS TAX

EXEMPT.--All renewable energy transmission bonds are exempt

from taxation by the state or any of its political

subdivisions.

Section 13. RENEWABLE ENERGY TRANSMISSION AUTHORITY

OPERATIONAL FUND.--The "renewable energy transmission

authority operational fund" is created in the state treasury.

The fund shall consist of money appropriated and transferred

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to the fund. Earnings from investment of the fund shall be

credited to the fund. Money in the fund is appropriated to

the authority for the purpose of carrying out the provisions

of the New Mexico Renewable Energy Transmission Authority Act.

Any unexpended or unencumbered balance remaining at the end of

a fiscal year shall not revert. Disbursements from the fund

shall be made upon warrants drawn by the secretary of finance

and administration pursuant to vouchers signed by the

executive director of the authority.

Section 14. REPORT TO LEGISLATURE.--The authority shall

submit a report of its activities to the governor and to the

legislature not later than December 1 of each year. Each

report shall set forth a complete operating and financial

statement covering its operations for the previous fiscal

year.

Section 15. LEGISLATIVE OVERSIGHT.--

A. In addition to its other duties, the New Mexico

finance authority oversight committee shall:

(1) monitor and oversee the operation of the

authority;

(2) meet on a regular basis to receive and

review reports from the authority on implementation of the

provisions of the New Mexico Renewable Energy Transmission

Authority Act and to review rules proposed for adoption

pursuant to that act;

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(3) review and provide assistance and advice

to the authority before the authority enters into a project;

(4) undertake an ongoing examination of the

statutes, constitutional provisions, regulations and court

decisions governing energy transmission and renewable energy

development; and

(5) report its findings and recommendations,

including recommended legislation or necessary changes, to the

governor, to the public regulation commission and to each

session of the legislature. The report and proposed

legislation shall be made available on or before December 15

of each year.

B. Once each calendar quarter, the authority shall

report to the legislative finance committee on all

expenditures made and activities conducted in the fiscal year

to date pursuant to the provisions of the New Mexico Renewable

Energy Transmission Authority Act.

Section 16. A new section of the Gross Receipts and

Compensating Tax Act is enacted to read:

"DEDUCTION--GROSS RECEIPTS--EQUIPMENT FOR CERTAIN

ELECTRIC TRANSMISSION OR STORAGE FACILITIES.--Receipts from

selling equipment to the New Mexico renewable energy

transmission authority or an agent or lessee of the authority

may be deducted from gross receipts if the equipment is

installed as part of an electric transmission facility or an

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interconnected storage facility acquired by the authority

pursuant to the New Mexico Renewable Energy Transmission

Authority Act."

Section 17. A new section of the Gross Receipts and

Compensating Tax Act is enacted to read:

"DEDUCTION--COMPENSATING TAX--EQUIPMENT FOR CERTAIN

ELECTRIC TRANSMISSION OR STORAGE FACILITIES.--The value of

equipment installed as part of an electric transmission

facility or an interconnected storage facility acquired by the

New Mexico renewable energy transmission authority pursuant to

the New Mexico Renewable Energy Transmission Authority Act may

be deducted in computing compensating tax due."

Section 18. A new section of the Gross Receipts and

Compensating Tax Act is enacted to read:

"DEDUCTION--GROSS RECEIPTS--SERVICES PROVIDED FOR

CERTAIN ELECTRIC TRANSMISSION AND STORAGE FACILITIES.--

Receipts from providing services to the New Mexico renewable

energy transmission authority or an agent or lessee of the

authority for the planning, installation, repair, maintenance

or operation of an electric transmission facility or an

interconnected storage facility acquired by the authority

pursuant to the New Mexico Renewable Energy Transmission

Authority Act may be deducted from gross receipts."

Section 19. EFFECTIVE DATE.--The effective date of the

provisions of this act is July 1, 2007.