NMSA 1978, § 7-27-10.1 — 7-27-10.1

Transfer to severance tax permanent fund before
determining bonding capacity; authorization for severance tax
bonds; priority for 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 based on
the lesser of the following estimates:
(1) an estimate that provides for equal annual issuances over the expected
term of bonds with terms greater than one year anticipated to be issued by the state
board of finance in the fiscal year in compliance with the requirements of Section 7-27-
14 NMSA 1978; and
(2) an estimate that provides that issuances for each year of that term shall
be projected to result in stable levels of state tax supported debt relative to the median
state debt ratios published by the national municipal bond rating agencies.

# C.

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.

The division shall allocate four and one-half percent of the estimated bonding
capacity for tribal infrastructure projects.

# E.

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.

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.

As used in this section:
(1) "division" means the board of finance division of the department of finance
and administration;
(2) "tribal infrastructure project" means a qualified project under the Tribal
Infrastructure Act [6-29-1 to 6-29-9 NMSA 1978]; and
(3) "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.