2023 New Mexico Statutes › Chapter 7 - Taxation › Article 27 - Severance Tax Bonding Act › Section 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.
C. 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. 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. 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; 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.
History:
Laws 2003, ch. 134, § 1; 2009, ch. 22, § 1; 2010, ch. 37, § 1; 2015, ch. 63, § 1; 2016 (2nd S.S.), ch. 5, § 9; 2017 (1st S.S.), ch. 1, § 4; 2019, ch. 273, § 2.
ANNOTATIONS
Cross references.
— For the federal Internal Revenue Code of 1986,
see
26 U.S.C. § 1 et seq.
For the federal Endangered Species Act of 1973,
see
16 U.S.C.S. § 1531 et seq.
The 2019 amendment,
effective June 14, 2019, provided for a distribution from the severance tax bonding fund to the severance tax permanent fund every year for ten years; and added a new Subsection A and redesignated former Subsections A through F as Subsections B through G.
The 2017 (1st S.S.) amendment,
effective May 26, 2017, suspended the severance tax bonding capacity allocation for water projects for the year 2017; in Subsection B, added "For each year except 2017"; in Subsection C, in the introductory clause, changed "percentages" to "percentage"; and in Subsection D, after "in the amount", deleted "allocated pursuant to" and added "provided for in", and after "provided for in this", deleted "subsection" and added "section".
The 2016 (2nd S.S.) amendment,
effective October 21, 2016, reduced the percentages of estimated severance tax bonding capacity allocated to water and tribal infrastructure projects; in Subsection B, after "water projects statewide", deleted "except for projects authorized in Subsection F of this section"; in Subsection C(2), after "subsequent year", deleted "five and one-half" and added "four and one-half"; and deleted Subsection F and redesignated former Subsection G as Subsection F.
Severability.
— Laws 2016 (2nd S.S.), ch. 5, § 12, provided that if a specific reversion, a voided authorization, a change in the use of severance tax bond proceeds or an authorization to expend severance tax bond proceeds is held invalid or otherwise cannot be effectuated, the remainder of Laws 2016 (2nd S.S.), ch. 5 and any other reversion, voided authorization, change in the use of severance tax bond proceeds or authorization to expend severance tax bond proceeds shall not be affected.
The 2015 amendment,
effective July 1, 2015, adjusted the percentages of severance tax bonding capacity allocated for tribal infrastructure projects; in Subsection A, after "each year, the", deleted "board of finance", and after "division", deleted "of the department of finance and administration"; in Subsection C, after "The", deleted "board of finance", after "allocate", deleted "five percent" and added "the following percentages", after "capacity", deleted "each year", and after the first occurrence of "tribal infrastructure projects", deleted "and" and added Paragraphs (1) and (2) of Subsection C; designated the remainder of Subsection C as a new Subsection D and redesignated the succeeding subsections accordingly; in Subsection D, after "severance tax bonds in the", deleted "annually allocated", and after "amount", added "allocated pursuant to this section"; in Subsection F, after "The", deleted "board of finance", and after "division", deleted "of the department of finance and administration"; and added new Paragraph (1) of Subsection G and redesignated the succeeding subsections accordingly.
The 2010 amendment,
effective July 1, 2011, in the catchline, after "priority", deleted "water projects" and added "for water projects and tribal infrastructure projects"; in Subsection B, in the first sentence, after "The division shall", deleted "authorize" and added "allocate"; after "bonding capacity each year", added "for water projects"; and after "tax bonds in the annually", deleted "deducted" and added "allocated"; and after "Section", changed "D" to "E"; and in the third sentence, after "authorized amount provided for in", deleted "Subsection A of this section" and added "this subsection"; added Subsection C; in Subsection D, in the second sentence, after "bonds issued for a water project", added "or a tribal infrastructure project" and after "six months of completion of the", deleted "water"; and in the third sentence, after "ensure proper reversions", added the remainder of the sentence; and added Paragraph (1) of Subsection F.
Applicability.
— Laws 2010, ch. 37, § 2 provided that the allocation of severance tax bonding capacity and the authorization of severance tax bonds for tribal infrastructure projects shall commence with the severance tax bonding capacity estimated on January 15, 2012 for authorization by the second session of the fiftieth legislature.
The 2009 amendment,
effective March 20, 2009, in Subsection A, added the exception at the end of the subsection and added Subsection D.