SENATE BILL 498
49th legislature - STATE OF NEW MEXICO - first session, 2009
INTRODUCED BY
Timothy Z. Jennings
AN ACT
RELATING TO ELECTRIC SERVICE; ENACTING THE RURAL ELECTRIFICATION ACCELERATION PROJECT ACT; CREATING A FUND TO PROVIDE ELECTRIC SERVICE INFRASTRUCTURE TO AREAS OF THE STATE THAT CURRENTLY HAVE NO ELECTRIC SERVICE; IMPOSING A FEE; AUTHORIZING THE ISSUANCE OF REVENUE BONDS BY THE NEW MEXICO FINANCE AUTHORITY; AUTHORIZING THE ISSUANCE OF SEVERANCE TAX BONDS; MAKING AN APPROPRIATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 6 of this act may be cited as the "Rural Electrification Acceleration Project Act".
Section 2. [NEW MATERIAL] FINDINGS AND PURPOSE.--
A. The legislature finds that:
(1) availability of electric service is a basic need of New Mexicans;
(2) there are still many residents in rural areas of this state who do not have the option of obtaining reliable electric service at a reasonable cost;
(3) without electric service, these New Mexicans cannot enjoy the simple basics of life that residents in the rest of the state take for granted;
(4) without electric service and the resulting availability of additional learning and communication options, it will be increasingly difficult for these rural New Mexicans to compete in the global economy of the twenty-first century; and
(5) New Mexico needs a program to extend electric transmission lines to these rural areas so that every New Mexican can have the option of securing reliable electric service at a reasonable cost.
B. The purpose of the Rural Electrification Acceleration Project Act is to provide a financing vehicle so that electric service can be offered to every area of this state.
Section 3. [NEW MATERIAL] DEFINITIONS.--As used in the Rural Electrification Acceleration Project Act:
A. "authority" means the New Mexico finance authority;
B. "commission" means the public regulation commission;
C. "electric service infrastructure" means transmission lines, rights of way and related property and equipment necessary to provide electric service. "Electric service infrastructure" includes facilities and related equipment for the generation of renewable energy, but does not include any other facilities or equipment related to the generation of electricity;
D. "electric utility" means a public electric utility regulated by the commission pursuant to the Public Utility Act, a municipal electric utility exempt from commission regulation pursuant to Section 62-6-4 NMSA 1978 or an applicant for an award from the fund pursuant to the Rural Electrification Acceleration Project Act that is not yet a public electric utility but would be required to be regulated pursuant to the Public Utility Act if the award is granted;
E. "fund" means the rural electrification acceleration project grant fund;
F. "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 and geothermal resources;
(b) hydropower facilities brought into service after July 1, 2007;
(c) fuel cells that are not fossil-fueled; and
(d) 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
G. "revenue bonds" means the rural electrification acceleration project bonds issued pursuant to the New Mexico Finance Authority Act and Section 5 of the Rural Electrification Acceleration Project Act.
Section 4. [NEW MATERIAL] ELECTRICITY USE FEE IMPOSED--COLLECTION.--
A. An electricity use fee of two cents ($.02) per megawatt hour is imposed on each retail electric customer in New Mexico.
B. The electricity use fee shall be included on the monthly bill of each customer of a public electric utility, a municipal electric utility or other person providing retail electric service. The customer shall be liable for the payment of the electricity use fee to the provider of retail electric service.
C. The person providing retail electric service shall be responsible for assessing, collecting and remitting the electricity use fee to the taxation and revenue department. The amount of the electricity use fee collected by a retail electric service provider shall be remitted monthly to the taxation and revenue department on or before the twenty-fifth day of the month following collection. The taxation and revenue department shall administer and enforce the collection of the fee pursuant to the provisions of the Tax Administration Act.
D. The taxation and revenue department shall distribute to the REAP debt service fund the receipts of the electricity use fees collected less any amount deducted pursuant to the provisions of Subsection E of this section; provided that, upon certification by the chief executive officer of the authority to the taxation and revenue department that no debt service is due on revenue bonds, the net receipts shall be distributed to the rural electrification acceleration project grant fund. Transfer of the net receipts from the electricity use fee to the REAP debt service fund or the rural electrification acceleration project grant fund shall be made within the month following the month in which the fee is collected.
E. The taxation and revenue department may deduct an amount not to exceed three percent of the electricity use fee collected as a charge for the administrative costs of collection, which amount shall be remitted to the state treasurer for deposit in the general fund each month.
Section 5. [NEW MATERIAL] BONDS AUTHORIZED--ISSUANCE--FUND CREATED.--
A. The authority is authorized to issue and sell from time to time revenue bonds, known as "rural electrification acceleration project bonds", in an amount outstanding at any one time not to exceed twenty million dollars ($20,000,000), payable solely from the REAP debt service fund, in compliance with the Rural Electrification Acceleration Project Act and the New Mexico Finance Authority Act. The bonds shall be issued for the purpose of making grants for the acquisition and construction of electric service infrastructure pursuant to the Rural Electrification Acceleration Project Act when the commission has certified that grants have been or will be awarded pursuant to Section 6 of the Rural Electrification Acceleration Project Act and there is a need for the bonds. The bonds may be issued at times and on terms established by the authority.
B. The net proceeds from the sale of the revenue bonds are appropriated to the commission and shall be deposited in the rural electrification acceleration project grant fund for the purpose of making grants for the acquisition and construction of electric service infrastructure pursuant to the Rural Electrification Acceleration Project Act.
C. All revenue bonds issued by the authority shall be obligations of the authority payable solely from the REAP debt service fund. The bonds shall not create an obligation, debt or liability of the state and no breach of any pledge, obligation or agreement of the authority shall impose a pecuniary liability or charge upon the general credit or taxing power of the state or any political subdivision of the state.
D. The authority may purchase revenue bonds with money in the public project revolving fund pursuant to the provisions of Section 6-21-6 NMSA 1978.
E. The "REAP debt service fund" is created in the authority. The fund shall consist of distributions to the fund of the net receipts derived from the electricity use fee and money earned from investment of the fund. Balances remaining in the fund at the end of a fiscal year shall not revert. Money in the fund is appropriated to the authority for the payment of principal, interest, premiums and expenses on revenue bonds issued pursuant to this section.
F. On the last day of January and 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 REAP debt service fund on the revenue bonds issued pursuant to this section. The authority shall transfer to the rural electrification acceleration project grant fund any balance in the REAP debt service fund above the estimated amounts.
G. Upon the certification of the authority that all debt service on revenue bonds has been paid in full, any remaining balance of the REAP debt service fund shall be transferred to the rural electrification acceleration project grant fund.
Section 6. [NEW MATERIAL] RURAL ELECTRIFICATION ACCELERATION PROJECT GRANT FUND--APPLICATION FOR GRANTS--AWARDS.--
A. The "rural electrification acceleration project grant fund" is created in the state treasury. The fund shall consist of proceeds from the sale of revenue bonds, proceeds from the sale of severance tax bonds issued pursuant to Section 7-27-12.5 NMSA 1978, electricity use fees distributed to the fund and any appropriations, grants, gifts or bequests made to the fund. Earnings from the fund shall be credited to the fund. The fund shall be administered by the commission, and money in the fund is appropriated to the commission for awarding grants for electric service infrastructure. Disbursements from the fund shall be made by warrant of the department of finance and administration pursuant to vouchers signed by the chair of the commission or the chair's authorized representative. Any unexpended or unencumbered balance remaining in the fund at the end of a fiscal year shall not revert but shall remain to the credit of the fund.
B. The commission shall, by rule, establish a program for grant awards from the fund to be used for electric service infrastructure that will provide electric service to residences and businesses in rural areas of the state for which electric service is not otherwise available.
C. An electric utility, desiring a grant award from the fund, shall submit an application to the commission. The application shall contain:
(1) a description of the applicant and its experience, expertise and ability to provide the electric service infrastructure for which the grant will be used and the resulting electric service;
(2) a description of the area that will be served by the electric service infrastructure, including the number of residences and businesses, the estimated number of individuals and an assessment of the need in the area for electric service;
(3) the estimated cost per kilowatt-hour for the electric service that will be provided after the electric service infrastructure is installed;
(4) the amount of grant award desired and all proposed expenditures from the grant award;
(5) the source and amount of the required matching funds, including copies of such ordinances, resolutions, contracts, grant agreements or other evidence of the commitment for the matching funds as is required by the commission;
(6) the source and amount of any additional private or public funds that will be used to supplement or match the grant award and the required match;
(7) if the grant will be used for the construction or acquisition of facilities or equipment for the generation of renewable energy, details concerning the proposed generation capacity, the siting of the facilities, the estimated costs and the proposed source of the renewable energy; and
(8) such other information required by the commission or considered by the applicant to be helpful to the commission in making a decision.
D. The commission shall evaluate the application, including the need for the electric service to be provided if the grant is awarded, the cost effectiveness of the electric service infrastructure and the cost of the electric service to be provided and award the grant if it determines that:
(1) the applicant has secured commitments for matching funds from other public sources, including the federal government, local governments and Indian nations, tribes or pueblos, in an amount equal to fifty percent of the total grant awarded from the fund;
(2) the award will further the purposes of the Rural Electrification Acceleration Project Act; and
(3) the award is a prudent use of state money.
E. The commission shall, by rule, establish such reporting and oversight functions as are necessary to ensure that the grants are expended in the most prudent manner possible and consistent with the original purpose for which they were made, provided that no more than an amount equal to five percent of a grant award shall be expended from the fund for administration functions of the commission.
F. No grant shall be awarded to provide electric service infrastructure to any area that includes a subdivision subject to regulation under the Land Subdivision Act or the New Mexico Subdivision Act.
Section 7. Section 7-1-2 NMSA 1978 (being Laws 1965, Chapter 248, Section 2, as amended) is amended to read:
"7-1-2. APPLICABILITY.--The Tax Administration Act applies to and governs:
A. the administration and enforcement of the following taxes or tax acts as they now exist or may hereafter be amended:
(1) Income Tax Act;
(2) Withholding Tax Act;
(3) Venture Capital Investment Act;
(4) Gross Receipts and Compensating Tax Act and any state gross receipts tax;
(5) Liquor Excise Tax Act;
(6) Local Liquor Excise Tax Act;
(7) any municipal local option gross receipts tax;
(8) any county local option gross receipts tax;
(9) Special Fuels Supplier Tax Act;
(10) Gasoline Tax Act;
(11) petroleum products loading fee, which fee shall be considered a tax for the purpose of the Tax Administration Act;
(12) Alternative Fuel Tax Act;
(13) Cigarette Tax Act;
(14) Estate Tax Act;
(15) Railroad Car Company Tax Act;
(16) Investment Credit Act, rural job tax credit, Laboratory Partnership with Small Business Tax Credit Act, Technology Jobs Tax Credit Act, film production tax credit, New Mexico filmmaker tax credit, Affordable Housing Tax Credit Act, high-wage jobs tax credit and Research and Development Small Business Tax Credit Act;
(17) Corporate Income and Franchise Tax Act;
(18) Uniform Division of Income for Tax Purposes Act;
(19) Multistate Tax Compact;
(20) Tobacco Products Tax Act; [and]
(21) the telecommunications relay service surcharge imposed by Section 63-9F-11 NMSA 1978, which surcharge shall be considered a tax for the purposes of the Tax Administration Act; and
(22) the electricity use fee imposed pursuant to Section 4 of the Rural Electrification Acceleration Project Act, which fee shall be considered a tax for the purposes of the Tax Administration Act;
B. the administration and enforcement of the following taxes, surtaxes, advanced payments or tax acts as they now exist or may hereafter be amended:
(1) Resources Excise Tax Act;
(2) Severance Tax Act;
(3) any severance surtax;
(4) Oil and Gas Severance Tax Act;
(5) Oil and Gas Conservation Tax Act;
(6) Oil and Gas Emergency School Tax Act;
(7) Oil and Gas Ad Valorem Production Tax Act;
(8) Natural Gas Processors Tax Act;
(9) Oil and Gas Production Equipment Ad Valorem Tax Act;
(10) Copper Production Ad Valorem Tax Act;
(11) any advance payment required to be made by any act specified in this subsection, which advance payment shall be considered a tax for the purposes of the Tax Administration Act;
(12) Enhanced Oil Recovery Act;
(13) Natural Gas and Crude Oil Production Incentive Act; and
(14) intergovernmental production tax credit and intergovernmental production equipment tax credit; C. the administration and enforcement of the following taxes, surcharges, fees or acts as they now exist or may hereafter be amended:
(1) Weight Distance Tax Act;
(2) the workers' compensation fee authorized by Section 52-5-19 NMSA 1978, which fee shall be considered a tax for purposes of the Tax Administration Act;
(3) Uniform Unclaimed Property Act (1995);
(4) 911 emergency surcharge and the network and database surcharge, which surcharges shall be considered taxes for purposes of the Tax Administration Act;
(5) the solid waste assessment fee authorized by the Solid Waste Act, which fee shall be considered a tax for purposes of the Tax Administration Act;
(6) the water conservation fee imposed by Section 74-1-13 NMSA 1978, which fee shall be considered a tax for the purposes of the Tax Administration Act; and
(7) the gaming tax imposed pursuant to the Gaming Control Act; and
D. the administration and enforcement of all other laws, with respect to which the department is charged with responsibilities pursuant to the Tax Administration Act, but only to the extent that the other laws do not conflict with the Tax Administration Act."
Section 8. A new section of the Severance Tax Bonding Act, Section 7-27-12.5 NMSA 1978, is enacted to read:
"7-27-12.5. [NEW MATERIAL] SEVERANCE TAX BONDS AUTHORIZED--RURAL ELECTRIFICATION ACCELERATION PROJECT GRANT FUND.--
A. The state board of finance may issue and sell severance tax bonds in each fiscal year from fiscal year 2010 through fiscal year 2019 in compliance with the Severance Tax Bonding Act in an amount not exceeding five million dollars ($5,000,000) per fiscal year when the public regulation commission certifies the need for the issuance of the bonds, provided that, if the authorized amount is not issued in any fiscal year, the authorization shall carry forward to the subsequent fiscal year.
B. The state board of finance shall schedule the issuance and sale of the bonds in the most expeditious and economical manner possible upon a finding by the state board of finance that, based upon a certification from the public regulation commission, the proceeds of the bonds are needed and that the projects can proceed to contract within a reasonable time. The state board of finance shall further take the appropriate steps necessary to comply with the federal Internal Revenue Code of 1986, as amended. 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 authorized amount provided for in this section.
C. The proceeds from the sale of the bonds are appropriated to the rural electrification acceleration project grant fund for the purpose of awarding grants pursuant to the Rural Electrification Acceleration Project Act.
D. Money from the severance tax bonds provided for in this section shall not be used to pay indirect costs. If the public regulation commission has not certified the need for the issuance of the bonds by July 1, 2020, the authorization provided in this section shall expire.
E. Any unexpended or unencumbered balance remaining at the end of fiscal year 2023 shall revert to the severance tax bonding fund."
Section 9. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2009.
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