HOUSE RURAL DEVELOPMENT, LAND GRANTS AND CULTURAL AFFAIRS COMMITTEE SUBSTITUTE FOR

HOUSE BILL 173

55th legislature - STATE OF NEW MEXICO - second session, 2022

 

 

 

 

 

 

 

AN ACT

RELATING TO PUBLIC INFRASTRUCTURE; ENACTING THE RURAL INFRASTRUCTURE CRISIS RESPONSE ACT; CREATING THE RURAL INFRASTRUCTURE CRISIS RESPONSE FUND; ESTABLISHING ELIGIBILITY REQUIREMENTS FOR FINANCIAL ASSISTANCE; CREATING THE BUREAU OF RURAL INFRASTRUCTURE CRISIS RESPONSE; PROVIDING POWERS; ALLOCATING A PORTION OF THE SEVERANCE TAX BONDING FUND TO THE RURAL INFRASTRUCTURE CRISIS RESPONSE FUND; MAKING AN APPROPRIATION.

 

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

     SECTION 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 5 of this act may be cited as the "Rural Infrastructure Crisis Response Act".

     SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Rural Infrastructure Crisis Response Act:

          A. "bureau" means the bureau of rural infrastructure crisis response of the local government division of the department of finance and administration;

          B. "crisis event" means an unforseen power surge, weather or other event that disables the use of critical public infrastructure and requires complete replacement or repair of the infrastructure that would cost a minimum of fifty percent of the cost of complete replacement. A "crisis event" may include damage to constructed infrastructure, durable equipment or the loss of a public resource, such as loss of a community water source due to a dam failure or extreme drought, but does not include foreseeable depletion of a water source due to regular pumping over time;

          C. "critical public infrastructure" means public infrastructure or durable equipment that is required for public health, safety or welfare of individuals or communities and includes dams, transportation infrastructure and infrastructure essential to the delivery of utility services;

          D. "durable equipment" means equipment of a permanent or non-depletable nature that is necessary in the use of critical public infrastructure;

          E. "eligible project" means a project that is eligible pursuant to Subsection A of Section 3 of the Rural Infrastructure Crisis Response Act;

          F. "fund" means the rural infrastructure crisis response fund;

          G. "local authority" means a municipality that has a population of less than twenty thousand people or a county that has a population of less than one hundred fifty thousand people according to the latest federal decennial census, a tribe, a mutual domestic water consumers association or a water and sanitation district that maintains local roads or provides utility services to less than six thousand billed customers;

          H. "non-state money" means money that does not derive from revenue or interest into the state treasury or into a state fund;

          I. "relief request" means a request for financial assistance for a project to repair or replace critical public infrastructure that has experienced a crisis event;

          J. "repair or replace" means repair or replacement of critical public infrastructure to the same level of functionality or service as the infrastructure provided prior to a crisis event;

          K. "secretary" means the secretary of finance and administration;

          L. "timely basis" means financial assistance for replacement or repair of critical public infrastructure that can be received or obligated by a local authority within one hundred eighty days of a crisis event;

          M. "tribe" means an Indian nation, tribe or pueblo located wholly or partially in New Mexico; and

          N. "utility services" means broadband, electricity, natural gas, solid waste, water or wastewater services.

     SECTION 3. [NEW MATERIAL] INFRASTRUCTURE ELIGIBILITY-- RELIEF REQUEST--EVALUATION--DETERMINATION--PROCEDURES AND RULES.--

          A. Beginning on January 1, 2023, a project for replacement or repair of critical public infrastructure is eligible for financial assistance when a relief request has been submitted to the bureau pursuant to Subsection B of this section and the secretary has made a determination of eligibility pursuant to Subsection D of this section that the project meets the following requirements:

                (1) the project is for repair or replacement of critical public infrastructure damaged due to a crisis event;

                (2) the damage to the critical public infrastructure severely affects the public health, safety or welfare of a community;

                (3) the local authority does not have the resources to repair or replace the critical public infrastructure; and

                (4) no other source of financial assistance is available to repair or replace the critical public infrastructure on a timely basis.

           B. A relief request may be submitted to the bureau by the governing board or council of a local authority or a state representative or state senator due to a crisis event in the district the state representative or state senator represents; provided that the request shall include a recommendation regarding eligibility by the regional planning commission established pursuant to the Regional Planning Act in which the crisis event occurred.

          C. Within thirty days of receiving a relief request pursuant to Subsection B of this section, the bureau shall provide an evaluation to the secretary regarding whether the relief request meets the eligibility requirements of Subsection A of this section and shall certify whether the local authority qualifies for financial hardship.

          D. Within fifteen days of receiving an evaluation pursuant to Subsection C of this section, the secretary shall make a formal determination regarding whether the project in a relief request meets the eligibility requirements pursuant to Subsection A of this section and whether the local authority qualifies for financial hardship.

          E. Upon a determination of eligibility pursuant to Subsection D of this section, the secretary shall:

                (1) for critical infrastructure that is owned by a tribal local authority, either certify to the state board of finance the need to issue bonds for the rural infrastructure crisis response project pursuant to Section 7-27-10.1 NMSA 1978 or award a grant from the fund to the tribal infrastructure board to repair or replace the damaged critical public infrastructure in question; or

                (2) for critical infrastructure that is owned by a non-tribal local authority, either certify to the state board of finance the need to issue bonds for the rural infrastructure crisis response project pursuant to Section 7-27-10.1 NMSA 1978 or award a grant from the fund to the local authority to repair or replace the damaged critical public infrastructure in question.

          F. On June 15 and December 15 of each year, the secretary shall submit to the state board of finance the certifications issued for the prior six months pursuant to Subsection E of this section; provided that the secretary shall not issue a total of certifications or awards pursuant to Subsection E of this section worth more than one million dollars ($1,000,000) for rural infrastructure crisis response projects within any given county in a calendar year.

     SECTION 4. [NEW MATERIAL] RURAL INFRASTRUCTURE CRISIS RESPONSE FUND--CREATED--PURPOSE--APPROPRIATIONS.--

          A. The "rural infrastructure crisis response fund" is created in the state treasury. The fund consists of appropriations, donations, interest from investment of the fund and other money distributed to the fund. The department of finance and administration shall administer the fund and may establish subaccounts for the fund as it deems necessary. Money in the fund is appropriated to the department of finance and administration for expenditure as provided in this section. Disbursements from the fund shall be made by warrant of the secretary of finance and administration pursuant to vouchers signed by the secretary of finance and administration or the secretary's designee. Money in the fund shall not revert at the end of a fiscal year.

          B. Money in the fund may be used to make grants to a local authority, or to the tribal infrastructure board when an eligible project is owned or operated by a tribe, for eligible projects that have been approved pursuant to Subsection E of Section 3 of the Rural Infrastructure Crisis Response Act for up to:

                (1) ninety-five percent of the total cost of an eligible project; provided that the local authority has demonstrated an ability, and has contracted, to provide the remainder of the project costs in non-state money; or

                (2) one hundred percent of the total cost of an eligible project if a financial hardship qualification certificate is issued to the local authority by the bureau and the level of hardship assistance is approved by the secretary.

          C. An eligible project that requires construction shall be designed in compliance with the engineering requirements established by the secretary after consulting with and considering the recommendations of the engineering societies operating in New Mexico.

          D. By November 30 of each year, the department of finance and administration shall provide a report to the appropriate interim legislative committee on the status of the fund, the status of the eligible projects for which grants have been made from the fund and the outstanding demand for assistance from the fund.

     SECTION 5. [NEW MATERIAL] BUREAU OF RURAL INFRASTRUCTURE CRISIS RESPONSE CREATED--POWERS.--

          A. The "bureau of rural infrastructure crisis response" is created within the local government division of the department of finance and administration.

          B. The bureau may hire staff as needed to meet the responsibilities of the bureau.

          C. The bureau shall provide evaluations of relief requests as required pursuant to Section 3 of the Rural Infrastructure Crisis Response Act.

     SECTION 6. Section 7-27-10.1 NMSA 1978 (being Laws 2003, Chapter 134, Section 1, as amended) is amended to read:

     "7-27-10.1. TRANSFER TO SEVERANCE TAX PERMANENT FUND BEFORE DETERMINING BONDING CAPACITY--AUTHORIZATION FOR SEVERANCE TAX BONDS--PRIORITY FOR RURAL INFRASTRUCTURE CRISIS RESPONSE PROJECTS, WATER PROJECTS AND TRIBAL INFRASTRUCTURE PROJECTS.--

          A. On December 31 of each year from 2019 through 2028, the division shall transfer twenty-three million six hundred ninety thousand dollars ($23,690,000) from the severance tax bonding fund to the severance tax permanent fund, unless the state board of finance determines that a lesser transfer amount is necessary pursuant to Section 7-27-8 NMSA 1978 to avoid a potential shortfall in debt service obligations.

          B. By January 15 of each year, the division shall estimate the amount of bonding capacity available for severance tax bonds to be authorized by the legislature.

          C. Each year, the division shall allocate two and one-fourth percent of the estimated bonding capacity for rural infrastructure crisis response projects, and the state board of finance shall issue severance tax bonds up to the annually allocated amount for use by the local government division of the department of finance and administration for such 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 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 rural infrastructure crisis response fund for the purposes certified by the secretary of finance and administration to the state board of finance pursuant to Subsection E of Section 3 of the Rural Infrastructure Crisis Response Act. Such certification shall be made by the secretary of finance and administration to the state board of finance after the bonds are issued, but prior to the distribution of any funds from the rural infrastructure crisis response fund to a local authority for such purposes.

          [C.] D. For each year except 2017, the division shall allocate nine percent of the estimated bonding capacity each year for water projects, and the legislature authorizes the state board of finance to issue severance tax bonds in the annually allocated amount for use by the water trust board to fund water projects statewide. The water trust board shall certify to the state board of finance the need for issuance of bonds for water 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 water project fund in the New Mexico finance authority for the purposes certified by the water trust board to the state board of finance.

          [D.] E. The division shall allocate the following percentage of the estimated bonding capacity for tribal infrastructure projects:

                (1) in 2016, six and one-half percent; and

                (2) in 2017 and each subsequent year, four and one-half percent.

          [E.] F. The legislature authorizes the state board of finance to issue severance tax bonds in the amount provided for in this section for use by the tribal infrastructure board to fund tribal infrastructure projects. The tribal infrastructure board shall certify to the state board of finance the need for issuance of bonds for tribal 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 section. 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 tribal infrastructure project fund for the purposes certified by the tribal infrastructure board to the state board of finance.

          [F.] G. 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 water project or a tribal infrastructure project shall revert to the severance tax bonding fund within six months of completion of the project. The New Mexico finance authority shall monitor and ensure proper reversions of the bond proceeds appropriated for water projects, and the department of finance and administration shall monitor and ensure proper reversions of the bond proceeds appropriated for tribal infrastructure projects.

          [G.] H. As used in this section:

                (1) "division" means the board of finance division of the department of finance and administration;

                (2) "rural infrastructure crisis response project" means an eligible project pursuant to the Rural Infrastructure Crisis Response Act;

                [(2)] (3) "tribal infrastructure project" means a qualified project under the Tribal Infrastructure Act; and

                [(3)] (4) "water project" means a capital outlay project for:

                     (a) the storage, conveyance or delivery of water to end users;

                     (b) the implementation of federal Endangered Species Act of 1973 collaborative programs;

                     (c) the restoration and management of watersheds;

                     (d) flood prevention; or

                     (e) conservation, recycling, treatment or reuse of water."

     SECTION 7. APPROPRIATION.--One million six hundred thousand dollars ($1,600,000) is appropriated from the general fund to the department of finance and administration for expenditure in fiscal years 2022 through 2025 for staff or contractual services for engineering and financial evaluations required by Subsection C of Section 3 of the Rural Infrastructure Crisis Response Act; provided that no more than four hundred thousand dollars ($400,000) shall be expended in any one fiscal year. Any unexpended or unencumbered balance remaining at the end of fiscal year 2025 shall revert to the general fund.

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