New Mexico Register / Volume XXIX, Issue 17 /
September 11, 2018
This is an
amendment to 20.7.5 NMAC, Sections 6, 7, 10, 11, 12, 13 and 14, effective 09-29-2018.
20.7.5.6 OBJECTIVE: The objective of this part is to establish a program to provide low-cost financial assistance to state agencies, local authorities, interstate agencies, and other qualified borrowers for the acquisition, construction, or modification of wastewater facilities or other eligible projects or activities pursuant to the act.
[20.7.5.6 NMAC - Rp, 20.7.5.6 NMAC, 12/16/2015; A, 09-29-2018]
20.7.5.7 DEFINITIONS: as used in this part:
A. “Act” means the Wastewater Facility Construction Loan Act.
B. “Administrative
fee” means a fee assessed and collected by the department from the [local
authority] qualified borrower on each loan and expressed as a
percentage per year on the outstanding principal amount of the loan, payable by
the borrower on the same date that principal and interest on the loan are due,
for deposit in the clean water administrative fund.
C. “Clean Water Act” means the federal Clean Water Act of 1977 and its subsequent amendments or successor provisions.
D. “Clean water state revolving loan administrative fund” means a separate fund created outside the wastewater facility construction loan fund/clean water state revolving fund designated solely for the costs of administering the clean water state revolving loan fund, in accordance with the Clean Water Act. Money remaining in the fund at the end of any fiscal year shall not revert to the general fund but shall accrue to the loan administrative fund and shall be used explicitly for the purpose above.
E. “Commission” means the water quality control commission.
F. “Department” means the New Mexico environment department.
G. “Eligible
project” means any project or activity that is eligible for funding assistance
under Section 603(c) of the Clean Water Act, Section 1383 of Title 33 of the
United States Code, as of January 1, 2018, including a wastewater facility
project, a nonpoint source water pollution control project, and a watershed
project that meet the criteria of the Clean Water Act.
[G.] H. “Final loan agreement” means an agreement
executed by the [local authority] qualified borrower and the
department upon completion of the project in order to [evidence] document
the permanent financing of the final loan amount.
[H.] I. “Final loan amount” means the aggregate
amount of the principal disbursed by the department to the [local authority]
qualified borrower during the construction of the [wastewater
facility] eligible project, together with accrued and unpaid
interest on the aggregate principal thereof.
[I.] J. “Financial
assistance” means loans, combination loan/grants, the purchase or refinancing
of existing state agency or local political subdivision obligations,
loan guarantees, credit enhancement techniques to reduce interest on loans and bonds,
bond insurance and bond guarantees, or any combination of these
purposes.
[J.] K. “Force account construction” means
construction performed by the employees of a local authority rather than
through a contractor.
[K.] L. “Fund” means the wastewater facility
construction loan fund established in Section 74-6A-4 NMSA 1978 of the [Wastewater
Facility Construction Loan Act] act.
[L.] M. [“Local authority” means any municipality,
county, water and sanitation district or any similar district, recognized
Indian tribe, mutual domestic water consumers association as defined by the
Sanitary Projects Act, or other issuing agency created pursuant to a joint
powers agreement acting on behalf of any entity listed in this subsection.]
“Local authority” means a municipality, intermunicipal agency, county,
incorporated county, mutual domestic water consumers association as defined by
the Sanitary Projects Act, sanitation district, water and sanitation district
or any similar district, recognized Indian tribe, or other issuing agency
created pursuant to a joint powers agreement acting on behalf of any entity
listed in this subsection.
[M.] N. “Payment” means a disbursement from the fund
directly to the [local authority] qualified borrower.
[N.] O. “Priority list” means the list of eligible
projects ranked according to the priority system pursuant to the [Wastewater
Facility Construction Loan Act] act.
[O.] P. “Priority system” means the system approved
by the commission for ranking eligible projects for which financial assistance
applications have been received pursuant to the act.
Q. [Other
terms will retain their definition as given in the act.] “Qualified
borrower” means a creditworthy borrower with an identified and verifiable
repayment source that is eligible for funding pursuant to the Clean Water Act,
as of January 1, 2018, including a state agency, an interstate agency, and a
local authority.
R. “State agency” means
an agency or department of the executive branch of government.
[P.] S. “Wastewater
facility” means a publicly owned system for treating or disposing of sewage or
wastes either by surface or underground methods, including any equipment,
plant, treatment works, structure, machinery, apparatus or land in any
combination, that is acquired, used, constructed or operated for the storage,
collection, reduction, recycling, reclamation, disposal, separation or
treatment of water or wastes, or for the final disposal of residues resulting
from the treatment of water or wastes, such as pumping and ventilating stations,
facilities, plants and works, outfall sewers, interceptor sewers and collector
sewers, and other real or personal property and appurtenances incidental
to their use or operation. [“Wastewater facility” also includes a nonpoint
source water pollution control or Brownfield redevelopment project as eligible
under the Clean Water Act.]
[20.7.5.7 NMAC - Rp, 20.7.5.7 NMAC, 12/16/2015; A, 09/29/2018]
20.7.5.10 ELIGIBILITY REQUIREMENTS FOR FINANCIAL ASSISTANCE:
A. Only [local
authorities] qualified borrowers will be eligible for financial
assistance from the fund.
B. The project must appear on the current priority list at the time of the financial assistance award.
C. To be eligible
for financial assistance from the fund, [local authorities] qualified
borrowers shall:
(1) meet the requirements of financial capability set by the department to assure sufficient revenue to operate and maintain the facility for its useful life, if applicable, and to repay the financial assistance;
(2) agree
to operate and maintain the [wastewater facility] eligible project
so that the [facility] project will function properly over its
structural and material design life, if applicable;
(3) agree to maintain separate project accounts, to maintain project accounts properly in accordance with generally accepted accounting principles and to conduct an audit of the project's financial records;
(4) agree
to provide a written assurance prior to construction, signed by an
attorney, or other authorized representative, that the [local
authority] qualified borrower has or will acquire proper title,
easements and rights-of-way to the property upon or through which the [wastewater
facility] eligible project proposed for funding is to be constructed
or extended;
(5) require
the contractor of the [construction] eligible project to post a
performance and payment bond in accordance with the requirements of Section
13-4-18 NMSA 1978 and its subsequent amendments and successor provisions;
(6) provide
a written notice of project completion [and start of operation of the
wastewater facility]; and
(7) provide
such information to the department as required [by the commission] in
order to comply with the provisions of the Clean Water Act and state law.
D. Financial
assistance shall be made only to [local authorities] qualified
borrowers that establish one or more dedicated sources of revenue to repay
the money received from the commission and to provide for operation,
maintenance, and equipment replacement expenses.
[20.7.5.10 NMAC - Rp, 20.7.5.10 NMAC, 12/16/2015; A, 09/29/2018]
20.7.5.11 APPLICATION PROCEDURES FOR PRIORITY LIST PLACEMENT:
A. Applications for
financial assistance shall be made by the [local authority] qualified
borrower on a form specified by the department.
B. Applicants for financial assistance shall provide the department with:
(1) a description of the scope of work of the project;
(2) a cost estimate of the project; and
(3) a target date for initiation of construction.
C. The department
will review the application for eligibility, and technical merits. The department will notify the [local
authority] qualified borrower of any inadequacies in the submittal. The [local authority] qualified
borrower may correct any inadequacies and resubmit the application.
D. Upon determination by the department that an application is eligible and complete, the application will be ranked utilizing the priority system and will be placed on the priority list.
[20.7.5.11 NMAC - Rp, 20.7.5.11 NMAC, 12/16/2015; A, 09/29/2018]
20.7.5.12 PRIORITY SYSTEM AND PRIORITY LIST:
A. Financial
assistance shall only be made to [local authorities] qualified
borrowers on the project priority list developed in accordance with the
priority system as adopted by the commission.
B. The commission shall adopt a system for the ranking of projects for financial assistance.
C. The department shall prepare a priority list of applicants for financial assistance based on the priority system approved by the commission.
[20.7.5.12 NMAC - Rp, 20.7.5.12 NMAC, 12/16/2015; A, 09/29/2018]
20.7.5.13 ELIGIBLE AND INELIGIBLE FINANCIAL ASSISTANCE ITEMS:
A. Eligible items for
financial assistance made from state-only funds include but are not limited
to the costs of engineering [feasibility] reports, contracted
engineering design, inspection of construction, special engineering services,
start-up services, contracted construction, materials purchased or equipment
leased for force account construction, land, or acquisition of existing
facilities. For financial assistance
made from federal funds, eligible items are those identified pursuant to the
Clean Water Act.
B. Financial
assistance shall be made only to [local authorities] qualified
borrowers that employ or contract with a [registered] New Mexico
licensed professional engineer to provide and be responsible for
engineering services on the project. Such
services include, but are not limited to [an engineering report] engineering
reports, construction contract documents, supervision of construction,
and start-up services.
C. Ineligible for financial assistance made with state-only funds items include:
(1) the costs of water rights;
(2) [local]
administrative costs;
(3) fulfillment or partial fulfillment of requirements made of a subdivider by the provisions of the Land Subdivision Act or the New Mexico Subdivision Act;
(4) force account construction; and
(5) administrative
[fee] fees.
[20.7.5.13 NMAC - Rp, 20.7.5.13 NMAC, 12/16/2015; A, 09/29/2018]
20.7.5.14 ADMINISTRATION
OF THE LOAN PROGRAM AND FUND:
A. The loan program
and fund is administered by the department as agent for the commission. Pursuant to Paragraph 10 of Subsection A
of Section 74-6A-9 [.A(10)] NMSA 1978 of the [Wastewater
Facility Construction Loan] act, the department shall develop new, and
implement existing, policies, procedures, and guidelines necessary and
appropriate to implement the provisions of the act and the Clean Water Act.
B. The
necessary administrative expenses required of the board, the commission,
and the department to implement the provisions of the act will be appropriated
from the fund.
C. The
department may impose and collect a fee from each [local authority] qualified
borrower that receives financial assistance from the fund, which fee shall
be deposited into the clean water state revolving loan administrative fund, and
used solely for the costs of administering the fund as follows:
(1) an
administrative fee may be assessed on all financial assistance provided after
January 1, 1996, and will be assessed on the refinancing of financial
assistance after October 1, 1993;
(2) if
an administrative fee is assessed pursuant to Paragraph (1) of Subsection C of
20.7.5.14 NMAC above, the total administrative fee assessed shall not exceed
five percent of the total loan amount; the fee will be assessed on the
outstanding principal balance of the loan payable; these fees are due on the
same dates the payment of principal and interest on the loans are due, and
shall be charged to each borrower, unless waived from the requirement by the
department; the department may determine, establish and revise from time to
time, the precise amount of the administrative fee to be charged, based on the projected
costs of administering the program and other revenue available to pay such
costs; the administrative fee payments must be deposited in the clean water
state revolving loan administrative fund as they are received; interest on the
clean water state revolving loan administrative fund shall be transferred to
the administrative fund as it is received; and
(3) an
administrative fee of two percent of the unpaid principal balance of the
refinanced loan will be assessed against the [local authority] qualified
borrower and shall be paid into the clean water state revolving loan
administrative fund at the time of closing of the refinancing.
D. Financial
assistance agreements will be prepared by the department and executed by the [local
authority] qualified borrower for the project which can be financed
with available balances in the fund.
E. Repayment of the
loan portion of the financial assistance shall begin no later than one year
after completion of the project for which the loan was executed and shall be
repaid in full no later than 30 years after completion of the project. All principal and interest on loan payments
shall be deposited in the fund.
F. The interest
rate for the loan portion of the financial assistance shall be the rate in
effect when the final loan agreement is executed. The interest rate shall not change during the
term of the financial assistance unless refinanced in accordance with
Subsection I of 20.7.5.14 NMAC. The interest rate shall be the base rate
provided in Subsection G of 20.7.5.14 NMAC unless the local authority qualifies
for a hardship rate provided in Subsection H of 20.7.5.14 NMAC.
G. At the beginning
of each state fiscal year, the commission may determine a base rate for the
state fiscal year which is less than or greater than the current base rate.
H. Hardship rates
shall be approved by the department when a local authority meets the associated
conditions at the time the financial assistance agreement is executed:
(1) When
the local authority’s per capita income is less than the statewide per capita
income based on the most current United States (U.S.) bureau of census
statistics.
(2) The
local authority's per capita income is less than three-fourths of the statewide
per capita income based upon the most current U.S. bureau of census statistics.
(3) A
combination of loan and grant funds in those years when grant funding is
available for assistance to rural communities.
(4) An
interest rate of zero percent when:
(a) the
local authority's average user cost is [at least fifteen dollars per month
or a higher amount as determined by the commission.] greater than one
and eighty-two hundredths percent of the local authority’s per capita income.
The calculation of average user cost
shall be consistent with a statewide methodology established by the department;
and
(b) the
local authority's [median household income] per capita income is
less than three-fourths of the statewide [non-metropolitan median
household income] per capita income based upon the most current U.S.
bureau of census statistics.
|
Interest Rate |
Local Authority Criteria |
|
2.375% |
Per capita income equal to or above
statewide average; base interest rate. (G.) |
|
1.2% |
Per capita income less than that
statewide average. (H.)(1) |
|
0.6% |
Per capita income less than ¾ of the
statewide average. (H.)(2) |
|
0% |
[ |
I. The interest
rate for a state agency shall be the lowest interest rate available above zero
percent in Subsection H of Section 14 of
20.7.5 NMAC and the interest rate for all other eligible borrowers will
be the base rate at the time the loan agreement is executed.
[I.]
J. A
local authority may refinance the loan portion of the financial assistance if
the local authority later qualifies for a reduced rate. The refinancing may only occur at or after the
execution of a final loan agreement.
[J.] K. Financial
assistance recipients shall comply with all applicable federal, state,
and local laws and regulations, including but not limited to:
(1) procurement;
(2) record
keeping;
(3) accounting;
(4) audit
and inspection;
(5) occupational
health and safety;
(6) environmental
review; and
(7) non-discrimination.
[K.] L. In the
event of default by the [local authority] qualified borrower, the
department as agent for the commission may enforce its rights by suit or
mandamus or may utilize all other available remedies under state law.
[20.7.5.14
NMAC - Rp, 20.7.5.14 NMAC, 12/16/2015; A, 05/30/2017;
A, 09/29/2018]