WATER PROJECT FUND CHANGES

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AN ACT
RELATING TO FINANCE; PROVIDING CRITERIA FOR PRIORITIZING
WATER PROJECTS PURSUANT TO THE WATER PROJECT FINANCE ACT;
ALLOWING THE NEW MEXICO FINANCE AUTHORITY TO FUND WATER
PROJECTS FROM THE WATER PROJECT FUND WITHOUT RECEIVING THE
APPROVAL OF THE LEGISLATURE UNTIL DECEMBER 31, 2029.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. A new section of the Water Project Finance
Act is enacted to read:
"PROJECT PRIORITIZATION.--
A. The board shall prioritize projects based on
the following criteria:
(1) urgency of need, as identified in a
regional water planning area with a completed regional water
plan accepted by the interstate stream commission;
(2) availability of federal or local
matching contributions;
(3) project readiness, including the
acquisition of required state and federal permits and
authorizations;
(4) regional impacts;
(5) efforts to mitigate or alleviate a
project's potential human health and safety concerns;
(6) level of planning and design;
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(7) improvement of water quality or
quantity; and
(8) other goals established for each project
type pursuant to the Water Project Finance Act and rules
adopted under that act.
B. Pursuant to Subsection A of this section, the
board shall give higher priority to projects that:
(1) have completed planning and design;
(2) provide regional impacts;
(3) mitigate or alleviate human health and
safety concerns; and
(4) improve water quality or quantity and
advance project-type specific goals established pursuant to
the Water Project Finance Act.
C. The board shall develop and use a weighted
scoring system that incorporates the criteria provided
pursuant to Subsection A of this section to evaluate and rank
all applications for loans and grants pursuant to the Water
Project Finance Act. A ten-point score increase shall be
granted in the event of an emergency situation.
Recommendations for expenditure of money from the water
project fund shall be based on the scoring and ranking of
applications in accordance with this section."
SECTION 2. Section 72-4A-5 NMSA 1978 (being Laws 2001,
Chapter 164, Section 5, as amended) is amended to read:
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"72-4A-5. BOARD--DUTIES.--The board shall:
A. adopt rules governing terms and conditions of
grants or loans recommended by the board for appropriation by
the legislature from the water project fund, giving priority
to projects pursuant to Section 1 of this 2026 act;
B. authorize qualifying water projects to the
authority that are for:
(1) storage, conveyance or delivery of water
to end users;
(2) implementation of federal Endangered
Species Act of 1973 collaborative programs;
(3) wastewater conveyance and treatment;
(4) restoration and management of
watersheds;
(5) flood prevention; or
(6) water conservation or recycling,
treatment or reuse of water as provided by law; and
C. evaluate projects, including their
environmental impacts, and recommend projects to the
interstate stream commission pursuant to the provisions of
Section 72-14-45 NMSA 1978."
SECTION 3. Section 72-4A-6 NMSA 1978 (being Laws 2001,
Chapter 164, Section 6, as amended) is amended to read:
"72-4A-6. AUTHORITY--DUTIES.--
A. The authority shall:
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(1) provide staff support for the board;
(2) develop application procedures and forms
for qualifying entities to apply for grants and loans from
the water project fund; and
(3) make loans or grants to qualifying
entities for qualifying water projects pursuant to the Water
Project Finance Act; provided that the service area for the
project is wholly within the boundaries of the state or the
project is an interstate project that directly benefits New
Mexico.
B. The loans and grants made pursuant to Paragraph
(3) of Subsection A of this section shall require legislative
authorization on and after December 31, 2029."
SECTION 4. Section 72-4A-9 NMSA 1978 (being Laws 2001,
Chapter 164, Section 9, as amended) is amended to read:
"72-4A-9. WATER PROJECT FUND--CREATED--PURPOSE.--
A. The "water project fund" is created in the
authority and shall consist of distributions made to the fund
from the water trust fund and payments of principal of and
interest on loans for approved water projects. The fund
shall also consist of any other money appropriated,
distributed or otherwise allocated to the fund for the
purpose of supporting water projects pursuant to provisions
of the Water Project Finance Act. The fund shall be
administered by the authority. Income from investment of the
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water project fund shall be credited to the fund. Balances
in the fund at the end of any fiscal year shall not revert to
the general fund. The water project fund may consist of such
subaccounts as the authority deems necessary to carry out the
purposes of the fund. The authority may establish procedures
and adopt rules as required to administer the fund and to
recover from the fund costs of administering the fund and
originating grants and loans. Ten percent of all water
project funds shall be dedicated to the state engineer for
water rights adjudications, and twenty percent of the money
dedicated for water rights adjudications shall be allocated
to the administrative office of the courts for the courts'
costs associated with water rights adjudications; provided
that from July 1, 2024 through June 30, 2029, the lesser of
four million dollars ($4,000,000) or eight percent of all
water project funds shall be dedicated to the state engineer
for water rights adjudications and two percent of all water
project funds shall be dedicated to the administrative office
of the courts for the courts' costs associated with water
rights adjudications.
B. Money in the water project fund may be used by
the authority to:
(1) make loans or grants to qualified
entities for projects and water rights adjudications pursuant
to the requirements of the Water Project Finance Act; and
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(2) hire contractors to provide financial
and administrative capacity development and direct technical
assistance on water projects.
C. The authority is authorized to issue revenue
bonds payable from the proceeds of loan repayments made into
the water project fund upon a determination by the authority
that issuance of the bonds is necessary to replenish the
principal balance of the fund. The net proceeds from the sale
of the bonds shall be deposited in the water project fund.
The bonds shall be authorized and issued by the authority in
accordance with the provisions of the New Mexico Finance
Authority Act."