New Mexico Register / Volume
XXIX, Issue 11 / June 12, 2018
NOTICE OF PUBLIC HEARING TO
AMEND 20.7.5 NMAC,
WASTEWATER FACILITY
CONSTRUCTION LOANS
The New Mexico
Water Quality Control Commission (“Commission” or “WQCC”) will hold a public hearing
beginning at 9:00 a.m. on Tuesday, August 14, 2018, and continuing thereafter
as necessary in Room 307 at the State Capital Building, 490 Old Santa Fe Trail,
Santa Fe, New Mexico. The hearing location may change prior to the hearing
date, and those interested in attending should visit the WQCC website: http://www.env.nm.gov/wqcc prior to the hearing. The purpose of the
hearing is to consider amendments to the rules on Wastewater Facility
Construction Loans, 20.7.5 NMAC (“Rules”) proposed by the New Mexico
Environment Department (“NMED”).
The amendments
would bring the Rules into compliance with recent changes to the Wastewater
Facility Construction Loan Act (Sections 74-6A-1 thru 74-6A-15 NMSA 1978)
(“Act”). The Act governs the administration of New Mexico’s Clean Water State
Revolving Fund (“CWSRF”) which provides low interest loans and grant/loan
packages to eligible entities for wastewater and storm water projects.
Primarily, these amendments would expand the scope of projects and borrowers
eligible for consideration for funding pursuant to the Act. Additionally, the
amendments would bring 20.7.5 NMAC into compliance with changed criteria for
zero-percent loans through the CWSRF.
The proposed
amendments may be reviewed during regular business hours at the NMED Hearing
Office located in the Harold Runnels Building, 1190 South St. Francis Drive, Room S-2102 Santa Fe, NM, 87505. The full text of the
proposed amendments is also available online at http://www.env.nm.gov/general/wqcc-18-01-r/.
The hearing will
be conducted in accordance with the WQCC Rulemaking Procedures (20.1.6 NMAC);
the Water Quality Act, Section 74-6-6 NMSA 1978; the State Rules Act, Section
14-4-5.3 NMSA 1978 and other applicable procedures.
All interested
persons will be given reasonable opportunity at the hearing to submit relevant
evidence, data, views, and arguments, orally or in writing; to introduce
exhibits; and to examine witnesses. Any person wishing to submit a
non-technical written statement for the record in lieu of oral testimony must
file such statement prior to the close of the hearing.
Pursuant to the
WQCC Rulemaking Procedures, those wishing to present technical testimony must
file a written notice of intent to do so with the Commission on or before 5:00
p.m. on July 25, 2018. The notice of intent shall:
-
identify the person or entity for whom the witness(es) will testify;
-
identify each technical witness that the person intends to present and
state the qualifications of the witness, including a description of his or her
education and work background;
-
include a copy of the direct testimony of each technical witness in
narrative form, and state the estimated duration of the direct oral testimony
of that witness;
-
include the text of any recommended modifications to the proposed
regulatory change; and
- list
and attach all exhibits anticipated to be offered by that person at the
hearing.
Notices of intent for
the hearing must be received in the Hearing Office no later than 5:00 p.m. on
July 25, 2018, and should reference the name of the regulation, the date of the
hearing, and docket number WQCC 18-01(R). Notices of intent to present
technical testimony should be submitted to:
Pam Castaneda,
Administrator of Boards and Commissions
Office of the
Water Quality Control Commission
Harold Runnels
Building
P.O. Box 5469
Santa Fe, NM 87502
Those wishing to
do so may offer non-technical public comment at the hearing or submit a
non-technical written statement in lieu of oral testimony at or before the
hearing. Written comments regarding the proposed revisions may be addressed to
Ms. Pam Castaneda, Administrator of Boards and Commissions, at the above
address, and should reference docket number WQCC 18-01(R).
If any person
requires assistance, an interpreter or auxiliary aid to participate in this
process, please contact Pam Castaneda, WQCC Administrator by July 31, 2018, at
P.O. Box 5469, 1190 St. Francis Drive, Santa Fe, New Mexico, 87502, telephone
(505) 827-2425 or email pam.castaneda@state.nm.us. (TDD or TTY users please
access the number via the New Mexico Relay Network, 1-800-659-1779 (voice); TTY
users: 1-800-659-8331).
The Commission may
make a decision on the proposed regulatory change at the conclusion of the
hearing or may convene a meeting after the hearing to consider action on the
proposal.
Notice
of Non-Discrimination
NMED does not
discriminate on the basis of race, color, national origin, disability, age or
sex in the administration of its programs or activities, as required by
applicable laws and regulations. NMED is responsible for coordination of
compliance efforts and receipt of inquiries concerning non-discrimination
requirements implemented by 40 C.F.R. Part 7, including Title VI of the Civil
Rights Act of 1964, as amended; Section 504 of the Rehabilitation Act of 1973;
the Age Discrimination Act of 1975, Title IX of the Education Amendments of
1972, and Section 13 of the Federal Water Pollution Control Act Amendments of
1972. If you have any questions about this notice or any of NMED’s non-
discrimination programs, policies or procedures, you may contact: Kristine Pintado, Non-Discrimination Coordinator New Mexico
Environment Department, 1190 St. Francis Dr., Suite N4050, P.O. Box 5469, Santa
Fe, NM 87502, (505) 827-2855, nd.coordinator@state.nm.us. If you believe that you have been
discriminated against with respect to a NMED program or activity, you may
contact the Non-Discrimination Coordinator identified above or visit our
website at https://www.env.nm.gov/NMED/EJ/index.html to learn how and where to file a complaint
of discrimination.
PROPOSED AMENDMENT
This is an amendment to 20.7.5 NMAC, Sections 6, 7,
10, 11, 12, 13, and 14, effective XX/XX/2018.
20.7.5.6 OBJECTIVE: The
objective of this part is to establish a program to provide 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, XX/XX/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] qualified
borrower 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.
[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.
[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. “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.
[Q.] T. Other
terms will retain their definition as given in the act.
[20.7.5.7 NMAC - Rp, 20.7.5.7 NMAC, 12/16/2015; A, XX/XX/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] eligible project
facility so that the project facility 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]
eligible project facility 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, XX/XX/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, XX/XX/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,
XX/XX/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 authority 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, XX/XX/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 Section
74-6A-9.A (10) 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. 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 20.7.5.14 H.
[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, XX/XX/2018]