TITLE 2 PUBLIC
FINANCE
CHAPTER 61 STATE
INDEBTEDNESS AND SECURITIES
PART 4 DISTRIBUTION
OF PRIVATE ACTIVITY BOND ALLOCATIONS
2.61.4.1 ISSUING
AGENCY: State Board of Finance, 181 Bataan Memorial
Building, Santa Fe, New Mexico.
[12/13/89; 11/29/97;
2.61.4.1 NMAC - Rn, 2 NMAC 61.4.1, 01/01/06]
2.61.4.2 SCOPE: State
agencies and issuing authorities that are not state agencies.
[12/13/89; 2/29/96;
2.61.4.2 NMAC - Rn, 2 NMAC 61.4.2, 01/01/06]
2.61.4.3 STATUTORY
AUTHORITY: Sections 6-20-1 through 6-20-11 NMSA 1978
(Act).
[12/13/89; 2.61.4.3
NMAC - Rn, 2 NMAC 61.4.3, 01/01/06]
2.61.4.4 DURATION:
Permanent.
[12/13/89; 2.61.4.4
NMAC - Rn, 2 NMAC 61.4.4, 01/01/06]
2.61.4.5 EFFECTIVE
DATE: November 29, 1997 unless a different date is
cited at the end of a section or paragraph and applies to all private activity
bonds issued after this date.
[12/13/89; 2/29/96;
11/30/96; 11/29/97; 2.61.4.5 NMAC - Rn, 2 NMAC 61.4.5, 01/01/06]
2.61.4.6 OBJECTIVE: To
establish rules and regulations governing the distribution of allocations of
private activity bonds provided for by the Private Activity Bond Act (Sections
6-20-1 through 6-20-11 NMSA 1978).
[12/13/89; 2/29/96;
2.61.4.6 NMAC - Rn, 2 NMAC 61.4.6, 01/01/06]
2.61.4.7 DEFINITIONS:
A. "Allocation" means an allocation of the state
ceiling issued by the board to an issuing authority to issue private activity
bonds.
B. "Board" means the state board of finance.
C. "Bond counsel" means an attorney or a firm of
attorneys listed in the most recently available "directory of municipal
bond dealers of the United States", published by the bond buyer and
commonly known as the "red book", in the section listing municipal
bond attorneys of the United States or the successor publication thereto.
D. “Code” means the internal revenue code of 1986, as
amended.
E. "Issuing authority" means the state, state
agencies, counties and incorporated municipalities.
F. "Mortgage credit certificate election" means
an election pursuant to Section 25(c)(2)(A)(ii) of the code, by an issuing authority
not to issue qualified mortgage bonds which the issuing authority is otherwise
authorized to issue, in exchange for the authority under Section 25 of the code
to issue mortgage credit certificates in connection with a qualified mortgage
credit certificate within the meaning of Section 25(c)(2) of the code.
G. "Private activity bond" means any bond or other
obligation which is a qualified bond under Section 141 of the code which is not
excluded by Section 146(g),(h) and (i) of the code, or a bond or other
obligation issued under Section 1312 or 1313 of the Tax Reform Act of 1986; and
the private activity portion of government use bonds allocated by an issuing
authority to an issue under Section 141(b)(5) of the code.
H. "State agency" means the New Mexico finance
authority, the New Mexico educational assistance foundation, the New Mexico
mortgage finance authority and any other agency, authority, instrumentality,
corporation or body, now existing or hereafter created, which under state law
can issue private activity bonds on behalf of the state.
I. "State ceiling" means, for any calendar year,
the amount as provided by Section 146(d) of the code.
[2/29/96; 11/29/97;
2.61.4.7 NMAC - Rn & A, 2 NMAC 61.4.7, 01/01/06; A, 10/15/08]
2.61.4.8 DISTRIBUTION
OF PRIVATE ACTIVITY BOND ALLOCATIONS:
A. Capitalized terms.
(1) Single family housing purpose bonds shall
mean private activity bonds issued pursuant to Section 143 of the code or
mortgage credit certificates issued pursuant to Section 25(c)(2) of the code.
(2) Multifamily housing purpose bonds shall
mean private activity bonds issued pursuant to Section 142(a)(7) of the code.
(3) Housing purpose bonds shall mean single
family housing purpose bonds and multifamily housing purpose bonds.
(4) Education purpose bonds shall mean private
activity bonds issued pursuant to Section 144(b) of the code.
(5) Small issue economic development purpose
bonds shall mean private activity bonds issued pursuant to Section 144(a) of
the code.
(6) Exempt facility purpose bonds shall mean
private activity bonds requiring an allocation of the state ceiling under the
code other than education purpose bonds, housing purpose bonds and small issue
economic development purpose bonds.
(7) Other purpose bonds shall mean small issue
economic development purpose bonds and exempt facility purpose bonds.
(8) Single family housing purpose allocation
percentage shall mean the percentage, determined annually by the board, of the
state ceiling that the board finds appropriate to reserve in a calendar year
for single family housing purpose bonds.
(9) Multifamily housing purpose allocation
percentage shall mean the percentage, determined annually by the board, of the
state ceiling that the board finds appropriate to reserve in a calendar year
for multifamily housing purpose bonds.
(10) Education purpose allocation percentage
shall mean the percentage, determined annually by the board, of the state
ceiling that the board finds appropriate to reserve in a calendar year for
education purpose bonds.
(11)
Other purpose allocation percentage shall mean the percentage,
determined annually by the board, of the state ceiling that the board finds
appropriate to reserve in a calendar year for other purpose bonds.
(12) Single family housing purpose carryforward
allocation percentage shall mean the percentage (which need not be the same as
the single family housing purpose allocation percentage), determined annually
by the board no later than the December meeting of the board, of the balance of
the state ceiling that can be the subject of a carryforward election allocation
that the board finds appropriate to allocate for carryforward purposes relating
to single family housing purpose bonds.
(13) Multifamily housing purpose carryforward
allocation percentage shall mean the percentage (which need not be the same as
the multifamily housing purpose allocation percentage), determined annually by
the board no later than the December meeting of the board, of the balance of
the state ceiling that can be the subject of a carryforward election allocation
that the board finds appropriate to allocate for carryforward purposes relating
to multifamily housing purpose bonds.
(14) Education purpose carryforward allocation
percentage shall mean the percentage (which need not be the same as the
education purpose allocation percentage), determined annually by the board no
later than the December meeting of the board, of the balance of the state
ceiling that can be the subject of a carryforward election allocation that the
board finds appropriate to allocate for carryforward purposes relating to
education purpose bonds.
(15) Other purpose carryforward allocation
percentage shall mean the percentage (which need not be the same as the other
purpose allocation percentage), determined annually by the board no later than
the December meeting of the board, of the balance of the state ceiling that can
be the subject of a carryforward election allocation that the board finds
appropriate to allocate for carryforward purposes relating to other purpose
bonds.
(16) Allocation percentage means single family
housing purpose allocation percentage, multifamily housing purpose allocation
percentage, education purpose allocation percentage and other purpose
allocation percentage, respectively.
(17) Carryforward allocation percentage means
single family housing purpose carryforward allocation percentage, multifamily
housing purpose carryforward allocation percentage, housing purpose
carryforward allocation percentage, education purpose carryforward allocation
percentage and other purpose carryforward allocation percentage, respectively.
B. Issuing authorities requesting at any time during the
year distributions of allocations or carryforward election allocations shall
submit the following.
(1) For all requests:
(a) a letter from the issuing authority setting
forth the amount of the state ceiling requested, the actual or expected date of
adoption of the bond resolution or similar documentation by the issuing
authority, the expected date of the sale of the bonds, the expected date of
closing of the bonds, a statement of any significant conditions that need to be
satisfied before the bonds can be issued, and a statement categorizing the
private activity bonds as education purpose bonds, single family housing
purpose bonds, multifamily housing purpose bonds, small issue economic
development purpose bonds or exempt facility purpose bonds, in accordance with
the definitions contained in this part, which categorization is subject to
board review and recategorization, if appropriate;
(b) a letter from bond counsel for the issuing
authority or the user, with supporting citations to state statutes, stating
that the private activity bonds can validly be issued under state law by the
issuing authority, which the board may refer to its bond counsel or to the
state's attorney general for review and comment; if the board is advised by its
bond counsel or the attorney general that the opinion of the issuing
authority's bond counsel is incorrect, the board may refuse to issue the
allocation requested;
(c) a letter from bond counsel for the issuing
authority or the user, with supporting citations to the code and the
regulations, stating that the bonds are private activity bonds requiring an
allocation of the state ceiling; and
(d) a letter from the issuing authority or the
user stating why the public purpose to be served by the issuance of the private
activity bonds could not be as economically or effectively served by a means not
involving an allocation of the state ceiling;
(e) any fees required by Section 2.61.4.9
NMAC.
(2) For all requests not involving a project,
i.e., for single family housing purpose bonds and education purpose bonds, a
letter from the issuing authority setting forth the following:
(a) a general description of the location of
the proposed borrowers;
(b) experience of the issuing authority in
utilizing allocations of the state ceiling.
(3) For all requests involving a project, a
letter from the issuing authority or the user including the following:
(a) a copy of the inducement resolution,
certified by an official of the issuing authority;
(b) a description of the user, the project and
the project's specific location;
(c) the estimated number and types of jobs, both
construction and permanent, indicating which are expected to be filled by
persons who are residents of the state at the time of submission of the request
for allocation and which are expected to be filled by persons who are
non-residents at the time of submission of the request for allocation; and a
representation that the issuing authority, if it receives an allocation of the
state ceiling for the project and issues the related bonds, will provide to the
board annually, for four (4) years following the issuance of the bonds, on or
before June 1, and after that period upon request of the board, employment
reports on a form prescribed by the board setting forth in reasonable detail
the numbers and types of workers, and their residency, employed at the project
on a full-time equivalent basis during the preceding 12 month period;
(d) the present use or conditions of the
project site and evidence that the proposed user of the project has obtained a
legally enforceable right to acquire the project site; evidence of approved
zoning of the proposed site must be submitted; this requires that project types
for which the cap is being requested are not prohibited by the existing zoning
of the proposed site;
(e)
the maximum amount of the private activity bonds and other obligations
to be issued;
(f) a proposed starting date and estimated
completion date of the construction of the project, if applicable;
(g) information relating to the feasibility of
the proposed project showing that the project or the user will generate
revenues and cash flow sufficient to make payments to pay debt service on the
bonds, if applicable;
(h) the amount and source of private capital
which will be used for the project in addition to bond financing, as well as a
brief table showing estimated sources and uses of funds;
(i) conceptual site plans for the project and
a map locating the project area;
(j) in the case of multifamily housing purpose
bonds, an explanation of why the housing needs of individuals whose income will
make them eligible under Section 142(d) of the code are not being met by
existing multifamily housing; information as to the number and percentage of
units set aside for households at various income levels or with special needs;
the legal mechanisms to monitor and enforce compliance with the set-aside
provisions and the experience of the monitoring entity with respect to similar
projects; a representation that the issuing authority, if it receives an
allocation of the state ceiling for the project and issues the related bonds,
will provide to the board annually, for four (4) years following the issuance
of the bonds, on or before June 1, and after that period upon request of the
board, occupancy reports on a form prescribed by the board setting forth in
reasonable detail information as to the occupancy of the rental units by
category of household; and the duration of the set-aside provisions;
(k) information relating to the feasibility
and proposed utilization of environmentally protective technologies, energy and
water efficiencies, and sustainable development practices;
(l) any other information regarding the
economic benefits to the project's community and to the state or which the user
believes will aid the board in considering the request for allocation; and
(m) a commitment letter or letter of intent,
which may be subject to common contingencies or closing conditions, from the
proposed underwriter, placement agent or bond purchaser to underwrite, place or
purchase the bonds.
(4) For all requests for an allocation for
single family housing purpose bonds where the issuing authority seeks an
allocation to be used by the issuing authority for mortgage credit certificates
or, in its discretion, for either qualified mortgage bonds or mortgage credit
certificates, a letter from the issuing authority stating that a qualified
mortgage credit certificate program has been adopted by the issuing authority
and a description of how the issuing authority is proposing to use the mortgage
credit certificates.
(5) For all requests for an allocation for
multifamily housing purpose bonds, the board may condition any allocation on
the agreement, on behalf of the issuer or the user of the project or projects,
to set aside a specified minimum number of units for households at certain
income levels or with special needs.
(6) The board or its staff may ask for
additional supplemental information from the issuing authority to aid the board
in considering the request, including information as to the readiness of the
issuer to issue the private activity bonds.
C. Within seven business days after an issuing authority
issues any private activity bonds or makes a mortgage credit certificate
election, the issuing authority or, in the case of a project, bond counsel for
the issuing authority or the user or users, shall advise the board by letter of
the date the bonds were issued and the total aggregate amount of the issue, or
in the case of a mortgage credit certificate election, the date and the amount
of the election, referencing in that letter how the applicable allocations and
carryforward allocations issued by the board were used for that issue.
D. The authority of the board to issue, on behalf of the
governor (as provided in Section 6-20-11 NMSA 1978), the certification required
by the code or the regulations, is hereby delegated to the director of the
board. The board interprets its authority to issue the certification, on behalf
of the governor, as permissive, and not in substitution of the authority of the
governor to issue the certification, on the governor's own behalf.
E. The board shall establish the bond issuance expiration
date, pursuant to Section 6-20-2A(5) NMSA 1978, on or before the regularly
scheduled meeting of the board in November of that year, except as otherwise
provided in Paragraph (2) of Subsection K of 2.61.4.8 NMAC.
F. Issuing authorities shall comply with the following
restrictions.
(1) Any issuing authority desiring to make a
request to the board for an allocation or a carryforward election allocation
must comply with established board rules for inclusion on the board's agenda.
In order to be considered for inclusion on the agenda, all materials required
to be submitted to the board must be submitted by the established time period
prior to the meeting date. The board publishes to interested parties notice of
the deadline for submission of complete materials prior to each meeting. It is
an issuing authority's responsibility to ascertain that deadline and comply
with it. All requests for allocations of the state ceiling appearing on the
board's agenda for a particular meeting will be deemed to have been received simultaneously.
(2) An issuing authority or the user shall
advise the board in writing of any unusable allocation of the state ceiling
promptly after it becomes aware the allocation will not be used in full prior
to the allocation expiration date. After being advised of a return of an
allocation of the state ceiling, the board shall make an announcement of the
amount of the return at its next board meeting. The board shall not consider
any requests for allocation of the state ceiling relating to the amount of any
returned allocation until the meeting following the announcement of the return.
The board may waive this waiting-period requirement for returns of allocations
on or after November 1 of any calendar year.
(3) The board will not consider a request for
a new allocation of the state ceiling for a project whose previous allocation
has expired or was voluntarily returned until the issuing authority has
resubmitted all of the information required by Subsection B of 2.61.4.8 NMAC.
Such request for a new allocation will not be given a priority over other
requests for allocations.
G. The board may require annually, to be presented at the
board's regularly scheduled meeting in November, a report from state agencies
issuing housing purpose bonds or education purpose bonds of the projected need
of those state agencies for allocations of the state ceiling for the remainder
of the calendar year and the next three calendar years.
H. At any time during a calendar year, the board may revise
current year allocation percentages and carryforward allocation percentages.
I. Whenever the board has on its agenda requests for
allocations exceeding the remaining applicable amount of an allocation
percentage or carryforward allocation percentage, the board will prioritize
requests, as applicable:
(1) by giving preference to small issue
economic development purpose bonds over exempt facility purpose bonds;
(2) with respect to small issue economic
development purpose bonds, by considering factors such as employment,
geographic location, nature and number of jobs created for residents and
non-residents, nature of the industry, the utilization of environmentally
protective technologies, energy and water efficiencies, and sustainable
development practices, and economic benefits to the community and the state;
(3) with respect to multifamily housing
purpose bonds, by considering factors such as percentage of units devoted to
persons of low income, services to special needs groups, percentage of
financing provided by equity and other financing not requiring an allocation,
geographic location, the experience of the agency charged with monitoring
compliance with persons of low income requirements, and the utilization of
environmentally protective technologies, energy and water efficiencies, and
sustainable development practices;
(4) with respect to single family housing
purpose bonds, by considering factors such as targeting to persons of low
income, geographic location, and experience of the issuing authority in
utilizing allocations of the state ceiling;
(5) with respect to exempt facility bonds, by
considering factors such as employment, geographic location, nature of jobs
created, nature of the industry, the utilization of environmentally protective
technologies, energy and water efficiencies, and sustainable development
practices, and economic benefits to the community and the state; and
(6) with respect to education purpose bonds,
by considering the geographic location of the prospective borrowers.
J. Pre-July 1 allocations:
(1) The act provides, in Section 6-20-3A and B
NMSA 1978, that until July 1 in any calendar year, the state ceiling for the
calendar year shall be allocated forty percent to state agencies as a group and
sixty percent to issuing authorities, as a group, that are not state agencies;
provided, however, that such allocation shall be made in accordance with
directives, rules or regulations governing the distribution of allocations to
be established by the board. This part is such a directive, rule or regulation
of the board.
(2) From January 1 until July 1 of any
calendar year, allocations of the state ceiling made pursuant to Section
6-20-3A NMSA 1978 are directed to be utilized so that no single state agency
may issue more than fifty percent of the allocation to state agencies as a group,
except that the board may exceed that amount if the board determines it is not
aware of any planned or pending requests for allocations by any state agency
prior to July 1 of any year that could not be approved as a result of granting
an allocation of more than fifty percent.
(3) From January 1 until July 1 of any
calendar year, allocations of the state ceiling made pursuant to Section
6-20-3B NMSA 1978 are directed to be utilized so that no single issuing
authority that is not a state agency may issue more than twenty percent of the
allocation to issuing authorities that are not state agencies as a group,
except that the board may exceed that amount if the board determines it is not
aware of any planned or pending requests for allocation by any issuing
authority, which is not a state agency, prior to July 1 of any year that could
not be approved as a result of granting an allocation of more than twenty
percent.
(4) From January 1 until July 1 of any
calendar year, allocations of the state ceiling made pursuant to Sections
6-20-3A and B NMSA 1978 are directed to be utilized so that no more than the
single family housing purpose allocation percentage of the state ceiling may be
allocated to single family housing purpose bonds, no more than the multifamily
housing purpose allocation percentage of the state ceiling may be allocated to
multifamily housing purpose bonds, no more than the education purpose
allocation percentage of the state ceiling may be allocated to education
purpose bonds and no more than the other purpose allocation percentage of the
state ceiling may be allocated to other purpose bonds except that the board may
exceed an allocation percentage if the board determines it is not aware of any
planned or pending requests for allocation by any issuing authority that could
not be approved as a result of granting an allocation in excess of the
applicable allocation percentage.
(5) The allocation expiration date for any
allocation issued by the board prior to July 1 in any calendar year shall be
July 1, subject to automatic and discretionary extension pursuant to Section
6-20-10 NMSA 1978, and the board may condition any discretionary extension or
extensions on the completion of both a sale and issuance of the private
activity bonds within the extension period.
K. Allocations on or after July 1 until November 1:
(1) On or after July 1 until November 1 of any
calendar year, allocations of the state ceiling made pursuant to Section
6-20-3D are directed to be utilized so that, after taking into account any
allocations still outstanding for or previously used by any issuing authority
in that calendar year, no more than the education purpose allocation percentage
of the state ceiling may be allocated to education purpose bonds, no more than
the single family housing purpose allocation percentage of the state ceiling
may be allocated to single family housing purpose bonds, no more than the
multifamily housing purpose allocation percentage of the state ceiling may be
allocated to multifamily housing purpose bonds, and no more than the other
purpose allocation percentage of the state ceiling may be allocated to other
purpose bonds except that the board may exceed an allocation percentage if the
board determines it is not aware of any planned or pending requests for
allocation by any issuing authority prior to November 1 of any year that could
not be approved as a result of granting an allocation in excess of the applicable
allocation percentage.
(2)
The allocation expiration date for any allocation issued by the board on
or after July 1 and prior to November 1 of any calendar year shall be the
earlier of 120 days from the date of issuance by the board of the allocation or
the date of the board's regularly scheduled meeting in December of that year,
subject to automatic or discretionary extension pursuant to Section 6-20-10
NMSA 1978, and the board may condition any discretionary extension or extensions
on the completion of both a sale and issuance of the private activity bonds
within the extension period. For purposes of this part, the board hereby
establishes the date of the board's regularly scheduled meeting in December, as
that date may be set by the board annually, as the bond issuance expiration
date for private activity bonds that receive an allocation on or after July 1
and prior to November 1.
L. Allocations on or after November 1:
(1) On or after November 1 of any calendar
year, no allocations of the state ceiling will be made by the board, unless the
board in its discretion deems it advisable. In determining whether it may be
advisable, the board may consider, among other factors, the ability of the
issuing authority seeking the allocation to issue the private activity bonds
prior to the bond issuance expiration date and whether the allocation will
further the board's policy to share the state ceiling among single family
housing purpose bonds, multifamily housing purpose bonds, education purpose
bonds and other purpose bonds in accordance with their respective allocation
percentages.
(2) The allocation expiration date for any
allocation issued by the board on or after November 1 of any calendar year
shall be the bond issuance expiration date established by the board annually
pursuant to Subsection E of 2.61.4.8 NMAC.
M. Carryforward election allocations:
(1) Requests for carryforward election
allocations may be made by any issuing authority for any carryforward purpose
to the board at its regularly scheduled meeting in December of the calendar
year, and shall be accompanied by any fees that may be required pursuant to
Section 2.61.4.9 NMAC.
(2) If and to the extent requested by issuing
authorities, carryforward election allocations of the state ceiling made
pursuant to Section 6-20-7 NMSA 1978 are directed to be utilized so that of the
balance of any state ceiling remaining unused after the bond issuance
expiration date no more than the single family housing purpose carryforward
allocation percentage will be allocated to single family housing purpose bonds,
no more than the multifamily housing purpose carryforward allocation percentage
will be allocated to multifamily housing purpose bonds, no more than the
education purpose carryforward allocation percentage will be allocated to
education purpose bonds and no more than the other purpose carryforward
allocation percentage will be allocated to exempt facility purpose bonds. In
determining the carryforward election allocation among housing purpose bonds,
the board may give first preference to qualified mortgage bonds, next
preference to issuances of mortgage credit certificates and final preference to
multifamily housing purpose bonds. The board may also take into account, if in
its discretion it so determines, allocations used in that calendar year for
housing purpose bonds, education purpose bonds and exempt facility bonds. If
the board does not receive sufficient carryforward election allocation requests
for any category of carryforward purpose such that issuing authorities have not
requested at least the applicable carryforward allocation percentage of the
balance of the state ceiling, the board may in its discretion determine, to the
extent requested by issuing authorities, to exceed the applicable carryforward
allocation percentage for any category of carryforward purpose.
[2/29/96; 11/30/96;
11/29/97; 2.61.4.8 NMAC - Rn & A, 2.61.4.8 NMAC, 01/01/06; A, 10/15/08; A,
01/15/09]
2.61.4.9 PRIVATE
ACTIVITY BOND FEES CHARGED: The act provides, in Section 6-20-11C
NMSA 1978, that the
board may require a reasonable application fee, allocation deposit and
extension fee to be paid by the issuing authority. Application and extension
fees collected by the board shall be deposited in the general fund. Allocation
deposits shall be deposited into a suspense account and after a determination
has been made that the allocation has been used for the intended purpose, the
board may direct the staff to refund in whole or in part the allocation deposit
without interest. Otherwise, the allocation deposit shall be deposited in the
general fund.
A. All fees shall be paid by bank cashier’s check, certified
check, money order, or by wire transfer in US funds.
B. An issuing authority will be required to pay an
application fee, an allocation deposit, and an extension fee. The board shall
charge the following fees:
(1) application fee for allocations valued at
$15,000,000.00 or less: $750.00
(2) application fee for allocations valued at
an amount greater than $15,000,000.00 and up to $30,000,000.00: $1,500.00
(3) application fee for allocations valued at
an amount greater than $30,000,000.00:
$3,000.00
(4) allocation deposit: $250.00 per million allocated
(5) extension fee: $750.00 if approved
C. Application and extension fees are due on the date a
request to appear on the board’s agenda is due; allocation deposits are due 7
business days following board approval of the allocation. If required fees are
not paid within the time specified, the allocation will become void.
[2.61.4.9 NMAC - N,
01/01/06; A, 10/15/08]
HISTORY OF 2.61.4 NMAC:
Pre-NMAC
History: The material in this part was
derived from that previously filed with the State Records Center:
SBF Rule 89-6,
Distribution of Private Activity Bond Allocations, 12/13/89.
History of Repealed
Material: [RESERVED]