TITLE 20             ENVIRONMENTAL PROTECTION

CHAPTER 7       WASTEWATER AND WATER SUPPLY FACILITIES

PART 5                WASTEWATER FACILITY CONSTRUCTION LOANS

 

20.7.5.1                 ISSUING AGENCY:  Water Quality Control Commission.

[20.7.5.1 NMAC - Rp, 20.7.5.1 NMAC, 12/16/2015]

 

20.7.5.2                 SCOPE:  This part applies to financial assistance and actions pursuant to the Wastewater Facility Construction Loan Act.

[20.7.5.2 NMAC - Rp, 20.7.5.2 NMAC, 12/16/2015]

 

20.7.5.3                 STATUTORY AUTHORITY:  Wastewater Facility Construction Loan Act, Sections 74-6A-1 to 15 NMSA 1978, as amended.

[20.7.5.3 NMAC - Rp, 20.7.5.3 NMAC, 12/16/2015]

 

20.7.5.4                 DURATION:  Permanent.

[20.7.5.4 NMAC - Rp, 20.7.5.4 NMAC, 12/16/2015]

 

20.7.5.5                 EFFECTIVE DATE:  December 16, 2015, unless a later date is cited at the end of a section.

[20.7.5.5 NMAC - Rp, 20.7.5.5 NMAC, 12/16/2015]

 

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, 9/29/2018]

 

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 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.            “Base Rate” means the highest loan interest rate.

                D.            “Clean Water Act” means the federal Clean Water Act of 1977 and its subsequent amendments or successor provisions.

                E.            “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.

                F.            “Commission” means the water quality control commission.

                G.            “Department” means the New Mexico environment department.

                H.            “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.

                I.             “Final loan agreement” means an agreement executed by the qualified borrower and the department upon completion of the project in order to document the permanent financing of the final loan amount.

                J.             “Final loan amount” means the aggregate amount of the principal disbursed by the department to the qualified borrower during the construction of the eligible project, together with accrued and unpaid interest on the aggregate principal thereof.

                K.            “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.

                L.            “Force account construction” means construction performed by the employees of a local authority rather than through a contractor.

                M.           “Fund” means the wastewater facility construction loan fund established in Section 74-6A-4 NMSA 1978 of the act.

                N.            “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.

                O.            “Payment” means a disbursement from the fund directly to the qualified borrower.

                P.            “Priority list” means the list of eligible projects ranked according to the priority system pursuant to the act.

                Q.            “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.

                R.            “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.

                S.             “State agency” means an agency or department of the executive branch of government.

                T.            “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.

[20.7.5.7 NMAC - Rp, 20.7.5.7 NMAC, 12/16/2015; A, 9/29/2018; A, 10/27/2020]

 

20.7.5.8                 CONSTRUCTION:  This part shall be liberally construed to effectuate the purposes of the act.  If any provision or application of this part is held invalid, the remainder, or its application to other situations or persons, shall not be affected.

[20.7.5.8 NMAC - Rp, 20.7.5.8 NMAC, 12/16/2015]

 

20.7.5.9                 COMPLIANCE WITH OTHER REGULATIONS:  Compliance with this part does not relieve a person from the obligation to comply with other applicable state and federal regulations.

[20.7.5.9 NMAC - Rp, 20.7.5.9 NMAC, 12/16/2015]

 

20.7.5.10               ELIGIBILITY REQUIREMENTS FOR FINANCIAL ASSISTANCE:

                A.            Only 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, 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 eligible project so that the 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 qualified borrower has or will acquire proper title, easements and rights-of-way to the property upon or through which the eligible project proposed for funding is to be constructed or extended;

                                (5)           require the contractor of the 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

                                (7)           provide such information to the department as required in order to comply with the provisions of the Clean Water Act and state law.

                D.            Financial assistance shall be made only to 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, 9/29/2018]

 

20.7.5.11               APPLICATION PROCEDURES FOR PRIORITY LIST PLACEMENT:

                A.            Applications for financial assistance shall be made by the 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 qualified borrower of any inadequacies in the submittal.  The 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, 9/29/2018]

 

20.7.5.12               PRIORITY SYSTEM AND PRIORITY LIST:

                A.            Financial assistance shall only be made to 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, 9/29/2018]

 

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 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 qualified borrowers that employ or contract with a New Mexico licensed professional engineer to provide and be responsible for engineering services on the project.  Such services include, but are not limited to 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)           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 fees.

[20.7.5.13 NMAC - Rp, 20.7.5.13 NMAC, 12/16/2015; A, 9/29/2018]

 

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 NMSA 1978 of the 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 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 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 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 loan agreement is executed.  The interest rate shall not change during the term of the financial assistance unless refinanced in accordance with Subsection J. 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.            Local authority interest rates and interest rate conditions shall be determined by the department and reported to the commission at the beginning of each state fiscal year.

                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.

                J.             The interest rate for all other eligible borrowers will be the base rate at the time the loan agreement is executed.

                K.            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.

                L.            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.

                M.           In the event of default by the 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, 5/30/2017; A, 9/29/2018; A, 10/27/2020]

 

HISTORY OF 20.7.5 NMAC:

Pre-NMAC History:  Material in the part was derived from that previously filed with the commission of public records - state records center and archives:

WQC Rule 67-2, Regulations Governing Water Pollution Control in New Mexico, filed 12/5/1967.

WQC Rule 72-1, Water Quality Control Commission Regulations, filed 8/4/1972.

WQCC Rule 77-1, Amended Water Quality Control Commission Regulations, filed 1/18/1977.

WQCC Rule 81-2, Water Quality Control Commission Regulations, filed 6/2/1981.

WQCC Rule 82-1, Water Quality Control Commission Regulations, filed 8/19/1982.

History of Repealed Material:

20.7.5 NMAC, Wastewater Facility Construction Loans, filed 6/16/2000 - Repealed effective 12/16/2015.

 

Other History:

That applicable portion of WQCC Rule 82-1, Water Quality Control Commission Regulations (filed 8/19/1982) was renumbered, reformatted and replaced by 20 NMAC 7.5, Wastewater and Water Supply Facilities - Wastewater Facility Construction Loans, effective 11/30/1995.

20 NMAC 7.5, Wastewater and Water Supply Facilities - Wastewater Facility Construction Loans (filed 10/25/1995) renumbered, reformatted, amended, and replaced by 20.7.5 NMAC, Wastewater and Water Supply Facilities - Wastewater Facility Construction Loans, effective 7/16/2000.