HOUSE BILL 111

49th legislature - STATE OF NEW MEXICO - second session, 2010

INTRODUCED BY

Patricia A. Lundstrom

AN ACT

RELATING TO THE NEW MEXICO FINANCE AUTHORITY; CREATING THE DISADVANTAGED COMMUNITY REVOLVING FUND; AUTHORIZING APPROPRIATIONS FROM THE PUBLIC PROJECT REVOLVING FUND TO THE DISADVANTAGED COMMUNITY REVOLVING FUND; MAKING AN APPROPRIATION FROM THE PUBLIC PROJECT REVOLVING FUND TO THE DISADVANTAGED COMMUNITY REVOLVING FUND.

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

     Section 1. A new section of the New Mexico Finance Authority Act is enacted to read:

     "[NEW MATERIAL] DISADVANTAGED COMMUNITY REVOLVING FUND--CREATED--PURPOSE.--

          A. The "disadvantaged community revolving fund" is created within the authority and shall be administered by the authority. The fund consists of distributions made to the fund from the public project revolving fund; payments of principal and interest on loans for disadvantaged community projects; and other money appropriated by the legislature or distributed or otherwise allocated to the fund for the purpose of supporting disadvantaged community projects. Income from investment of the money in the fund shall be credited to the fund. Balances in the fund at the end of a fiscal year shall not revert. The fund may consist of subaccounts as determined to be necessary by the authority.

          B. The authority may establish procedures and adopt rules subject to the approval of the New Mexico finance authority oversight committee to administer the disadvantaged community revolving fund and to originate loans or guarantee loans for disadvantaged community projects approved by the authority. To protect public money in the fund or other public resources, rules of the authority shall describe the means of recovering public money or other public resources if a disadvantaged community defaults on its obligations to the authority.

          C. Disadvantaged community projects receiving financing assistance with money in the disadvantaged community revolving fund shall first be approved by law.  

          D. Payments on loans made pursuant to this section from funds appropriated to the disadvantaged community revolving fund from the public project revolving fund shall be pledged first to the repayment of any outstanding authority revenue bonds payable from the public project revolving fund. At the end of each fiscal year, after all debt service charges, replenishment of reserves and administrative costs on all outstanding bonds, notes or other obligations payable from the public project revolving fund are satisfied, disadvantaged community revolving fund loan payments shall flow to the disadvantaged community revolving fund.

          E. Money in the disadvantaged community revolving fund is appropriated to the authority to:

                (1)  pay the reasonably necessary administrative and other costs incurred by the authority in evaluating, processing, originating and servicing disadvantaged community revolving fund bonds, loans and loan guarantees;

                (2)  make loans for disadvantaged community projects;

                (3)  make loan guarantees for disadvantaged community projects; and

                (4)  purchase disadvantaged community project revenue bonds.

          F. Money in the disadvantaged community revolving fund that is not needed for immediate disbursement, including money held in reserve, may be deposited or invested in the same manner as other funds administered by the authority.

          G. The authority may issue disadvantaged community revolving fund bonds or refunding bonds when the authority determines that a bond issue is required or desirable. As security for the payment of the principal and interest on such bonds issued by the authority, the authority is authorized to pledge, transfer and assign:

                (1) any obligations of a disadvantaged community, payable to the authority;

                (2) the security for the disadvantaged community's obligations;

                (3) any grant, subsidy or contribution from a disadvantaged community or the United States or any of its agencies or instrumentalities; or

                (4) any income, revenues, funds or other money of the authority from any other source appropriated to the disadvantaged community revolving fund.

          H. The authority may apply the proceeds of the sale of disadvantaged community revolving fund bonds to:

                (1) provide financing to communities for disadvantaged community projects;

                (2) the payment of interest on bonds issued by the authority for a period not to exceed three years from the date of issuance of the bonds; and

                (3) the payment of all expenses, including publication and printing charges, attorney fees, financial advisory and underwriter fees and premiums or commissions that the authority determines are necessary or advantageous in connection with the recommendation, advertisement, sale, creation and issuance of bonds pursuant to this subsection.

          I. As used in this section:

                (1) "disadvantaged community" means a qualified entity having:

                     (a) a median household income of less than sixty percent of the statewide median household income;

                     (b) unemployment rates at least one and one-half times the national or state average;

                     (c) colonias areas designated by the United States department of housing and urban development; or

                     (d) met other criteria for disadvantaged status as determined by rule of the authority; and

                (2) "disadvantaged community project" means a public project in a disadvantaged community."

     Section 2. Section 6-21-6.1 NMSA 1978 (being Laws 1994, Chapter 145, Section 2, as amended) is amended to read:

     "6-21-6.1. PUBLIC PROJECT REVOLVING FUND--APPROPRIATIONS TO OTHER FUNDS.--

          A. The authority and the department of environment may enter into a joint powers agreement pursuant to the Joint Powers Agreements Act for the purpose of describing and allocating duties and responsibilities with respect to creation of an integrated loan and grant program to be financed through issuance of bonds payable from the public project revolving fund. The bonds may be issued in installments or at one time by the authority in amounts authorized by law. The aggregate amount of bonds authorized and outstanding pursuant to this subsection shall not be greater than the amount of bonds that may be annually repaid from an amount not to exceed thirty-five percent of the governmental gross receipts tax proceeds distributed to the public project revolving fund in the preceding fiscal year. The net proceeds may be used for purposes of the [water and wastewater] local government planning fund and the water and wastewater project grant fund as specified in the New Mexico Finance Authority Act or for 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.

          B. Public projects funded pursuant to the Wastewater Facility Construction Loan Act, the Rural Infrastructure Act, the Solid Waste Act or the Drinking Water State Revolving Loan Fund Act shall not require specific authorization by law as required in Sections 6-21-6 and 6-21-8 NMSA 1978.

          C. At the end of each fiscal year, after all debt service charges, replenishment of pledged reserves and administrative costs on all outstanding bonds, notes or other obligations payable from the public project revolving fund are satisfied, [an aggregate amount not to exceed thirty-five percent of] the governmental gross receipts tax proceeds distributed to the public project revolving fund in the preceding fiscal year less all debt service charges and administrative costs of the authority paid in the preceding fiscal year on bonds issued pursuant to this section may be appropriated by the legislature from the public project revolving fund to the following funds for local infrastructure financing:

                (1) the wastewater facility construction loan fund for purposes of the Wastewater Facility Construction Loan Act;

                (2) the rural infrastructure revolving loan fund for purposes of the Rural Infrastructure Act;

                (3) the solid waste facility grant fund for purposes of the Solid Waste Act;

                (4) the drinking water state revolving loan fund for purposes of the Drinking Water State Revolving Loan Fund Act;

                (5) the water and wastewater project grant fund for purposes specified in the New Mexico Finance Authority Act; [or]

                (6) the [water and wastewater] local government planning fund for purposes specified in the New Mexico Finance Authority Act; or

                (7) the disadvantaged community revolving fund.

          D. The authority and the department of environment in coordination with the New Mexico finance authority oversight committee may recommend annually to each regular session of the legislature amounts to be appropriated to the funds listed in Subsection C of this section for local infrastructure financing."

     Section 3. APPROPRIATION.--Fifteen million dollars ($15,000,000) is appropriated from cash balances in the public project revolving fund after service charges, replenishment of pledged reserves and administrative costs on all outstanding bonds, notes or other obligations payable from the public project revolving fund are satisfied to the disadvantaged community revolving fund for expenditure in fiscal year 2010 and subsequent fiscal years for the purposes of the fund. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not revert to the public project revolving fund.

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