HOUSE AGRICULTURE AND WATER RESOURCES COMMITTEE SUBSTITUTE FOR

HOUSE BILL 314

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

AN ACT

RELATING TO THE PUBLIC PEACE, HEALTH, SAFETY AND WELFARE; ENACTING THE COLONIAS INFRASTRUCTURE ACT; CREATING A BOARD; PRESCRIBING POWERS AND DUTIES; CREATING A TRUST FUND; CREATING A PROJECT FUND; ALLOCATING SEVERANCE TAX BONDING CAPACITY FOR COLONIAS INFRASTRUCTURE PROJECTS; AUTHORIZING SEVERANCE TAX BONDS; MAKING APPROPRIATIONS.

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

     Section 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 8 of this act may be cited as the "Colonias Infrastructure Act".

     Section 2. [NEW MATERIAL] FINDINGS AND PURPOSE.--

          A. The legislature finds that:

                (1) colonias lack basic infrastructure resulting in poor social, health and economic conditions;

                (2) adequate infrastructure such as water and wastewater systems, solid waste disposal facilities, flood and drainage control, roads and housing infrastructure are essential to improved health, safety and welfare of all New Mexicans, including residents of the colonia communities;

                (3) local efforts and resources have been insufficient to develop and maintain a consistent and adequate level of infrastructure;

                (4) addressing the urgent need of replacing, improving and developing infrastructure through the use of an alternative financing mechanism is a long-term cost savings benefit to both the state and the communities; and

                (5) adequate infrastructure development allows colonia residents to achieve the basic conditions necessary to improve the quality of their lives.

          B. The purposes of the Colonias Infrastructure Act are to:

                (1) ensure adequate financial resources for infrastructure development for colonia recognized communities;

                (2) provide for the planning and development of infrastructure in an efficient and cost-effective manner; and

                (3) develop infrastructure projects to improve quality of life and encourage economic development.

     Section 3. [NEW MATERIAL] DEFINITIONS.--As used in the Colonias Infrastructure Act:

          A. "authority" means the New Mexico finance authority;

          B. "board" means the colonias infrastructure board;

          C. "colonia" means a rural community with a population of twenty-five thousand or less located within one hundred fifty miles of the United States-Mexico border that:

                (1) has been designated as a colonia by the municipality or county in which it is located because of a:

                     (a) lack of potable water supply;

                     (b) lack of adequate sewage systems; or

                     (c) lack of decent, safe and sanitary housing;

                (2) has been in existence as a colonia prior to November 1990; and

                (3) has submitted appropriate documentation to the board to substantiate the conditions of this subsection, including documentation that supports the designation of the municipality or county;

          D. "financial assistance" means providing grants or loans on terms and conditions approved by the authority;

          E. "project fund" means the colonias infrastructure project fund;

          F. "qualified entity" means a county, municipality or other entity recognized as a political subdivision of the state;

          G. "qualified project" means a capital outlay project selected by the board for financial assistance that is primarily intended to develop colonias infrastructure. A qualified project may include a water system, a wastewater system, solid waste disposal facilities, flood and drainage control, roads or housing infrastructure; but "qualified project" does not include general operation and maintenance, equipment, housing allowance payments or mortgage subsidies; and

          H. "trust fund" means the colonias infrastructure trust fund.

     Section 4. [NEW MATERIAL] COLONIAS INFRASTRUCTURE BOARD CREATED.--

          A. The "colonias infrastructure board" is created.

          B. The board shall consist of seven voting members as follows:

                (1) the secretary of finance and administration or the secretary's designee from the department of finance and administration;

                (2) the secretary of environment or the secretary's designee from the department of environment;

                (3) the chief executive officer of the authority or the chief executive officer's designee from the authority;

                (4) one member appointed by the president pro tempore of the senate;

                (5) one member appointed by the minority leader of the senate;

                (6) one member appointed by the speaker of the house of representatives; and

                (7) one member appointed by the minority leader of the house of representatives.

          C. The members appointed pursuant to Paragraphs (4) through (7) of Subsection B of this section shall be appointed with the advice and consent of the senate, serve at the pleasure of the appointing authority, be residents of the colonias area and have experience in capital project development or administration, and they may receive per diem and mileage as provided for nonsalaried public officers in the Per Diem and Mileage Act but shall receive no other compensation, perquisite or allowance.

          D. There shall be five advisory, nonvoting members of the board as follows:

                (1) the executive director of the south central council of governments or the director's designee;

                (2) the executive director of the southwest New Mexico council of governments or the director's designee;

                (3) the executive director of the southeastern New Mexico economic development district or the director's designee;

                (4) the executive director of the New Mexico association of counties or the director's designee; and

                (5) the executive director of the New Mexico mortgage finance authority or the director's designee.

          E. The board shall choose a chair and vice chair from among its members and such other officers as it deems necessary. The board shall meet whenever a voting member submits a request in writing to the chair, but not less than quarterly.

          F. All meetings of the board shall be open to the public and subject to the Open Meetings Act and, at each meeting, the board shall provide an opportunity for public comment.

     Section 5. [NEW MATERIAL] BOARD--DUTIES.--The board shall:

          A. promulgate such rules as are necessary to govern the acceptance, evaluation and prioritization of applications submitted by qualified entities for financial assistance;

          B. after applications have been processed and evaluated by the authority, prioritize the qualified projects for financial assistance; and

          C. upon such terms and conditions as are established by the authority, recommend the prioritized projects to the authority for financial assistance for:

                (1) planning, designing, constructing, improving or expanding a qualified project;

                (2) developing engineering feasibility reports for qualified projects;

                (3) inspecting construction of qualified projects;

                (4) providing professional services;

                (5) completing environmental assessments or archaeological clearances and other surveys for qualified projects;

                (6) acquiring land, water rights, easements or rights of way; or

                (7) paying legal costs and fiscal agent fees associated with development of qualified projects.

     Section 6. [NEW MATERIAL] AUTHORITY--DUTIES.--The authority shall:

          A. provide staff support to the board;

          B. administer the project fund;

          C. at the direction of the board, process, review and evaluate applications for financial assistance from qualified entities; and

          D. at the direction of the board, administer qualified projects that receive financial assistance.

     Section 7. [NEW MATERIAL] COLONIAS INFRASTRUCTURE TRUST FUND--CREATED--INVESTMENT--DISTRIBUTION.--

          A. The "colonias infrastructure trust fund" is created in the state treasury. The trust fund shall consist of money that is appropriated, donated or otherwise allocated to it. Money in the trust fund shall be invested by the state investment officer in the manner that land grant permanent funds are invested pursuant to Chapter 6, Article 8 NMSA 1978. Income from investment of the trust fund shall be credited to the fund. Money in the trust fund shall not be expended for any purpose, but an annual distribution from the trust fund shall be made to the project fund pursuant to this section.

          B. On July 1 of each year in which adequate money is available in the trust fund, an annual distribution shall be made from the trust fund to the project fund in the amount of ten million dollars ($10,000,000) until the distribution is less than an amount equal to four and seven-tenths percent of the average of the year-end market values of the trust fund for the immediately preceding five calendar years. Thereafter, the amount of the annual distribution shall be four and seven-tenths percent of the average of the year-end market values of the trust fund for the immediately preceding five calendar years.

     Section 8. [NEW MATERIAL] COLONIAS INFRASTRUCTURE PROJECT FUND--CREATED--PURPOSE--APPROPRIATIONS.--

          A. The "colonias infrastructure project fund" is created in the authority and shall be administered by the authority.

          B. The project fund shall consist of:

                (1) distributions from the trust fund;

                (2) payments of principal and interest on loans for qualified projects;

                (3) other money appropriated by the legislature or distributed or otherwise allocated to the project fund for the purpose of supporting qualified projects;

                (4) the proceeds of severance tax bonds appropriated to the fund for qualified projects; and

                (5) income from investment of the project fund that shall be credited to the project fund.

          C. Except for severance tax bond proceeds required to revert to the severance tax bonding fund, balances in the project fund at the end of a fiscal year shall not revert to any other fund.

          D. The project fund may consist of subaccounts as determined to be necessary by the authority.

          E. The authority may establish procedures and adopt rules as required to:

                (1) administer the project fund;

                (2) originate grants or loans for qualified projects recommended by the board;

                (3) recover from the project fund the costs of

administering the fund and originating the grants and loans; and

                (4) govern the process through which qualified

entities may apply for financial assistance from the project fund.

     Section 9. A new section of the Severance Tax Bonding Act is enacted to read:

     "[NEW MATERIAL] AUTHORIZATION FOR SEVERANCE TAX BONDS--PRIORITY FOR INFRASTRUCTURE PROJECTS FOR COLONIAS.--

          A. After the annual estimate of severance tax bonding capacity pursuant to Subsection A of Section 7-27-10.1 NMSA 1978, the board of finance division of the department of finance and administration shall allocate five percent of the estimated bonding capacity each year for colonias infrastructure projects, and the legislature authorizes the state board of finance to issue severance tax bonds in the annually allocated amount for use by the colonias infrastructure board to fund the projects. The colonias infrastructure board shall certify to the state board of finance the need for issuance of bonds for colonias infrastructure projects. 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 subsection. If necessary, the state board of finance shall take the appropriate steps to comply with the federal Internal Revenue Code of 1986, as amended. Proceeds from the sale of the bonds are appropriated to the colonias infrastructure project fund for the purposes certified by the colonias infrastructure board to the state board of finance.

          B. Money from the severance tax bonds provided for in this section shall not be used to pay indirect project costs. Any unexpended balance from proceeds of severance tax bonds issued for a colonias infrastructure project shall revert to the severance tax bonding fund within six months of completion of the project. The colonias infrastructure board shall monitor and ensure proper reversions of the bond proceeds appropriated for the projects.

          C. As used in this section, "colonias infrastructure project" means a qualified project under the Colonias Infrastructure Act."

     Section 10. APPLICABILITY.--The allocation of severance tax bonding capacity and the authorization of severance tax bonds for colonias infrastructure projects pursuant to Section 9 of this act shall commence with the severance tax bonding capacity estimated by January 15, 2012 for authorization by the second session of the fiftieth legislature.

     Section 11. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2011.

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