New Mexico Register / Volume XXXVI,
Issue 3 / February 11, 2025
NOTICE OF PROPOSED RULEMAKING AND PUBLIC HEARING
The New Mexico Water Trust
Board (Board) will hold a public hearing on Friday,
March 14, 2025, from 10:00 – 11:00 a.m. The hearing will be conducted virtually via
Zoom; the public may attend the hearing using the following methods:
Friday, March 14, 2025, 10:00-11:00 a.m. Mountain
Time
Zoom Meeting Link:
https://nmfa-net.zoom.us/j/84700538751?pwd=RbIY04DPjhF1SwpvBG54vt0fLQmlJP.1
Meeting ID: 847 0053 8751
Passcode: 852858
To join the meeting by phone,
dial:
+16694449171,,84700538751#,,,,*852858# US -or-
+17193594580,,84700538751#,,,,*852858# US
Find your local number: https://nmfa-net.zoom.us/u/kcxR5DTpKE
The purpose of the rule
hearing is to obtain input and public comment on proposed rule amendments
relating to
19.25.10 NMAC, review and eligibility of proposed water projects, consistent
with changes made to the Water Project Finance Act,
Laws 2024, Ch. 9 (House Bill 211 Approved February 28, 2024).
Copies of the proposed rule
may be accessed online at https://www.nmfinance.com/water-trust-board
or contact Board staff at OGC@nmfa.net, (505) 984-1454, or toll free 1-800-ASK-NMFA
(1-877-275-6632).
The Board will accept written
public comments on the proposed rule beginning February 11, 2025. Please submit written comments on the proposed
rule to the NMFA via electronic mail at OGC@nmfa.net, or by regular mail
at 810 W. San Mateo Road, Santa Fe, NM 87505. Written comments must be received
no later than 5 p.m. on March 14, 2025.
Comments received prior to the rule hearing will be posted to the Board
website at https://www.nmfinance.com/water-trust-board. Interested persons will also be given the opportunity
to present their comments during the rule hearing.
Individuals who require this
information in an alternative format or need any form of auxiliary aid to
attend or participate in this meeting are asked to contact the Board Staff as
soon as possible at OGC@nmfa.net, (505) 984-1454 , or toll free
1-800-ASK-NMFA (1-877-275-6632). The
Board requests advance notice to provide required special accommodations at
least one week prior to the meeting or as soon as possible.
Statutory Authority:
Legal authority for this rulemaking may be found in the Water Project Finance
Act, Section 72-4A-1 et seq., NMSA 1978, specifically 72-4A-5. Pursuant to Section 72-4A-6, NMSA 1978, the
New Mexico Finance Authority is responsible for providing necessary
administrative staff support to the Water Trust Board.
Proposed Amendment:
This is an amendment to
19.25.10 NMAC, Sections 6, 7, 8, 11, and 18, effective April 22, 2025.
19.25.10.6 OBJECTIVES:
A. Section 72-4A-5, NMSA 1978 provides
that the New Mexico water trust board is required to adopt rules governing
terms and conditions of grants and loans recommended by the board for
appropriation by the state legislature from the water project fund giving
priority to projects that have urgent needs, that have been identified for
implementation of a completed regional water plan that is accepted by the
interstate stream commission and that have matching contributions from federal
or local funding sources; and authorizes 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; (3)
restoration and management of watersheds; (4) flood prevention; and (5)
conservation, recycling, treatment or reuse of water as provided by law. Additionally, the board shall create a
drought strike team to coordinate responses to emergency water shortages caused
by drought conditions. Section 72-4A-9, NMSA 1978, creates the “water project
fund” within the New Mexico finance authority.
B. Section 72-4A-5,
NMSA 1978, provides that the board shall give priority to qualifying water
projects that (1) have been identified by the board as being urgent to [meet
the needs of a regional water planning area that has had a completed regional
water plan accepted by the interstate stream commission] address public
health and safety issues; (2) have matching contributions from federal or
local funding sources available and (3) have obtained all requisite state and
federal permits and authorizations necessary to initiate the qualifying water
project. The purpose of these rules is to set forth the intent of the board and
to outline, in general terms, the criteria and procedures to be used in
evaluating and funding qualifying water projects.
C. Section 72-4A-5,
NMSA 1978, provides that the board shall 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.
[C] D. Section 72-4A-6, NMSA 1978, provides that
the authority shall provide support for the water trust board, develop
application procedures and forms for qualifying entities to apply for grants
and loans from the water project fund; and make loans or grants to qualifying
entities for qualifying water projects authorized by the state legislature,
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.
[D] E. Section
72-4A-9, NMSA 1978, provides that the authority may adopt separate procedures
and rules for administration of the water project fund and recover from the
water project fund costs of administering the water project fund and
originating grants and loans.
[19.25.10.6
NMAC - Rp, 19.25.10.6 NMAC, 7/31/2008; A, 4/22/2025]
19.25.10.7 DEFINITIONS:
A. “Act”
means the Water Project Finance Act, Sections 72-4A-1 through 72-4A-10, NMSA
1978, as the same may be amended and supplemented.
B. “Agreement”
means the document or documents signed by the board and a qualifying entity
which specify the terms and conditions of obtaining financial assistance from
the water project fund.
C. “Applicant”
means a qualifying entity which has filed a water project proposal with the
authority for initial review and referral to the board’s project review
committee.
D. “Authority”
means the New Mexico finance authority.
E. “Authorized
representative” means one or more individuals duly authorized to act on
behalf of the qualifying entity in connection with its financial application,
water project proposal or agreement.
F. “Board”
means the New Mexico water trust board created by the act.
G. “Bylaws”
means the bylaws of the board adopted on September 25, 2001, and amended on
June 27, 2007, and as may be further amended and supplemented.
H. “Financial
application” means a written document filed with the authority by an
applicant for the purpose of evaluating the applicant’s qualifications for
types of financial assistance which may be provided by the board.
I. “Financial assistance” means loans, grants and any other type of
assistance authorized by the act, or a combination thereof, provided from the
water project fund to a qualified entity for the financing of a qualifying
water project.
J. “Policy committee”
means a standing committee, appointed by the chairman of the board from the
members of the board pursuant to the bylaws to review policies and policy
related matters and make recommendations to the full board.
K. “Political
subdivision” means a municipality, county, land grant-merced
controlled and governed pursuant to Section 49-1-1 through 49-1-18 or 49-4-1
through 49-4-21 NMSA 1978, regional or local public water utility authority
created by statute, irrigation district, conservancy district, special
district, acequia or soil and water conservation district, water and sanitation
district, or an association organized and existing pursuant to the Sanitary
Projects Act, Chapter 3, Article 29 NMSA 1978.
L. “Project review
committee” means a standing committee, appointed by the chairman of the
board from the members of the board pursuant to the bylaws to review water
projects to be recommended for funding from the water project fund.
M. “Qualifying entity” means a state
agency, a political subdivision of the state, an intercommunity water or
natural gas supply association or corporation organized under Chapter 3,
Article 28 NMSA 1978, a recognized Indian nation, tribe or pueblo, the
boundaries of which are located wholly or partially in New Mexico or an
association of such entities created pursuant to the Joint Powers Agreement
Act, Chapter 11, Article 1 NMSA 1978 or other authorizing legislation for the
exercise of their common powers.
N. “Qualifying water project” means a
project recommended by the board for funding by the legislature which includes
a water project serving an area wholly within the boundaries of the state 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; [(4)](5) flood prevention; or [(5)] (6)
conservation, recycling, treatment or reuse of water as provided by law and
which has been approved by the state legislature pursuant to Subsection B of
Section 72-4A-9, NMSA 1978.
O. “State” means
the state of New Mexico.
P. “State agency”
means any agency or institution of the state.
Q. “Water project
account” means a fund designated by a qualifying entity exclusively for
receipt of financial assistance.
R. “Water project fund”
means the fund of that name created in the authority by Section 72-4A-9, NMSA
1978.
S. “Water project
proposal” means a written proposal submitted by a qualifying entity for
review by the project review committee.
T. “Water trust fund”
means the fund of that name created in the state treasury by Section 72-4A-8,
NMSA 1978.
[19.25.10.7
NMAC - Rp, 19.25.10.7 NMAC, 7/31/2008; A, 12/30/2013; A, 4/22/2025]
19.25.10.8 ELIGIBILITY:
PRIORITIZATION OF WATER PROJECTS: The board will develop and consider a variety
of factors in reviewing and evaluating water project proposals to determine
which water projects to recommend as qualifying water projects for
appropriation by the state legislature. The board shall give priority to
projects that have urgent needs[, that have been identified for
implementation of a completed regional water plan that is accepted by the
interstate stream commission] and that have matching contributions from
federal or local sources as provided for in Section 72-4A-5 NMSA 1978. Pursuant to Section 72-4A-5.1 NMSA 1978, the
board, in conformance with the state water plan and pursuant to the provisions
of the Water Project Finance Act, shall prioritize the planning and financing
of water projects required to implement the plan. The board shall identify
opportunities to leverage federal and other funding. The board shall establish
policies for prioritization of water projects.
[19.25.10.8
NMAC - Rp, 19.25.10.8 NMAC, 7/31/2008; A, 12/30/2013; A, 4/30/2015; A,
4/22/2025]
19.25.10.11 QUALIFYING
WATER PROJECTS AND ELIGIBLE COSTS:
A. The board may
authorize the authority to provide financial assistance from the water project
fund to qualifying entities only for qualifying water projects as provided by
Section 72-4A-6 and Section 72-4A-7, NMSA 1978.
B. Financial
assistance shall be made only to qualify entities that:
(1) agree
to provide for the operation and maintenance of the water project so that it
will function properly over the structural and material design life[, which
shall not be less than twenty years];
(2) require
the contractor of the construction project to post a performance and payment
bond in accordance with the requirements of Section 13-4-18, NMSA 1978;
(3) provide
written assurance signed by an attorney or provide a title insurance policy
that the political subdivision has proper title, easements and rights of way to
the property upon or through which the water project proposed for funding is to
be constructed or extended;
(4) meet
the requirements of the financial capability set by the [board] authority
to ensure sufficient revenues to operate and maintain the water project for its
useful life and to repay the loan;
(5) agree
to properly maintain financial records [and to do an audit of the project’s
financial records] in accordance with all applicable laws; and
(6) agree
to pay costs of originating grants and loans as determined by rules adopted by
the [board] authority.
C. Plans and
specifications for a water project shall be approved by the [New Mexico
environment department or by another appropriate agency designated by the] authority
after review and upon the recommendation of the state engineer and the
department of environment before grant or loan disbursements to pay
for construction costs [is] are made to a qualifying entity. Plans and specifications for a water project
shall incorporate available technologies and [operations] operational
design for water efficiency.
D. Financial
assistance shall be made for eligible items, which include:
(1) matching
requirements for federal and local cost shares;
(2) engineering
feasibility reports;
(3) contracted
engineering design;
(4) inspection
of construction;
(5) special
engineering services;
(6) environmental
or archeological surveys;
(7) construction;
(8) land
acquisition;
(9) easements
and rights of way; and
(10) legal
costs[ and fiscal agent fees within limits set by the board].
E. A qualified
entity which has had financial assistance approved by the state legislature for
financing a qualifying water project may apply to the board to redirect the
financial assistance to a different water project made necessary by
unanticipated events. The decision to
redirect the financial assistance to a different qualifying water project will
be at the sole discretion of the board and subject to approval of the state
legislature as required by Section 72-4A-9(B), NMSA 1978.
[19.25.10.11
NMAC - Rp, 19.25.10.11 NMAC, 7/31/2008; A, 5/28/2010; A, 4/22/2025]
19.25.10.18 ADMINISTRATION
OF THE WATER PROJECT FUND:
A. The water project fund shall be
administered by the authority as a separate account but may consist of such
subaccounts as the authority deems necessary to carry out the purposes of the
fund.
B. Money in the water project fund may be used by the authority to (i) make loans or grants to qualified entities recommended
by the water trust board, (ii) hire contractors to provide financial and
administrative capacity development and direct technical assistance to entities
on water projects, and (iii) pay administrative costs of the authority.
C. Money from
repayments of loans made by the board for qualifying water projects shall be
deposited in the water project fund. The
water project fund shall also consist of any other money appropriated,
distributed or otherwise allocated to the water project fund for the purpose of
financing qualifying water projects.
[C] D. The authority shall adopt a uniform
accounting system for the water project fund and each account and subaccount
established by the authority, based on generally accepted accounting
principles.
[D] E. 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.
[19.25.10.18
NMAC - Rp, 19.25.10.18 NMAC, 7/31/2008; A, 4/22/2025]