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.
[11-30-95; 20.7.5.1 NMAC - Rn, 20 NMAC 7.5.100, 7/16/2000]
20.7.5.2 SCOPE. This part applies to financial assistance and actions pursuant to the Wastewater Facility Construction Loan Act.
[2-5-87; 11-30-95; 20.7.5.2 NMAC - Rn, 20 NMAC 7.5.101, 7/16/2000]
20.7.5.3 STATUTORY AUTHORITY. Wastewater Facility Construction Loan Act, NMSA 1978, Sections 74-6A-1 to 15 as amended.
[2-5-87; 11-30-95; 20.7.5.3 NMAC - Rn, 20 NMAC 7.5.102, 7/16/2000]
20.7.5.4 DURATION. Permanent.
[11-30-95; 20.7.5.4 NMAC - Rn, 20 NMAC 7.5.103, 7/16/2000]
20.7.5.5 EFFECTIVE DATE. July 16, 2000 This part amends and replaces 20 NMAC 7.5 filed October 25, 1995, amended September 17, 1998 entitled Wastewater Facility Construction Loan Act.
A. All references to 20 NMAC 7.5-7.7 or to the Wastewater Facility Construction Loan Act, in any other rule shall be construed as a reference to this part.
B. The amendment and replacement of 20 NMAC 7.5-7.7 shall not affect any administrative or judicial enforcement action pending on the effective date of such amendment nor the validity of any financial assistance provided pursuant to 20.7.5 NMAC - 20.7.7 NMAC.
[11-30-95; 20.7.5.5 NMAC - Rn, 20 NMAC 7.5.104 & A, 7/16/2000]
20.7.5.6 OBJECTIVE. The objective of this part is to establish a program to provide financial assistance to local authorities for the acquisition, construction or modification of wastewater facilities pursuant to the act.
[11-30-95; 20.7.5.6 NMAC - Rn, 20 NMAC 7.5.105, 7/16/2000]
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 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. "Final loan agreement" means an agreement executed by the local authority and the department upon completion of the project in order to evidence the permanent financing of the final loan amount.
H. "Final loan amount" means the aggregate amount of the principal disbursed by the department to the local authority during the construction of the wastewater facility, together with accrued and unpaid interest on the aggregate principal thereof.
I. "Financial assistance" means loans, combination loan/grants, the purchase or refinancing of existing 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. "Force account construction" means construction performed by the employees of a local authority rather than through a contractor.
K. "Fund" means the wastewater facility construction loan fund established in Section 74-6A-4.
L. "Local authority" means any municipality, county, 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. "Payment" means a disbursement from the fund directly to the local authority.
N. Priority list" means the list of eligible projects ranked according to the priority system pursuant to the Wastewater Facility Construction Loan Act.
O. "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.
P. "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 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. Other terms will retain their definition as given in the act.
[2-5-87; 10-25-88; 11-18-93; 11-30-95; 09-30-98; NMAC - Rn, 20 NMAC 7.5.108 & A, 7/16/2000; A, 11/15/2007]
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.
[11-30-95; 20.7.5.8 NMAC - Rn, 20 NMAC 7.5.106, 7/16/2000]
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.
[11-30-95; 20.7.5.9 NMAC - Rn, 20 NMAC 7.5.107, 7/16/2000]
20.7.5.10 ELIGIBILITY REQUIREMENTS FOR FINANCIAL ASSISTANCE.
A. Only local authorities 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 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 and to repay the financial assistance;
(2) agree to operate and maintain the wastewater facility so that the facility will function properly over its structural and material design life;
(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) provide a written assurance, signed by an attorney, that the local authority has or will acquire proper title, easements and rights-of-way to the property upon or through which the wastewater facility proposed for funding is to be constructed or extended;
(5) require the contractor of the construction project to post a performance and payment bond in accordance with the requirements of NMSA 1978, Section 13-4-18 and its subsequent amendments and successor provisions;
(6) provide a written notice of 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 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.
[2-5-87; 11-18-93; 11-30-95; 20.7.5.10 NMAC - Rn, 20 NMAC 7.5.200 & A, 7/16/2000]
20.7.5.11 APPLICATION PROCEDURES FOR PRIORITY LIST PLACEMENT.
A. Applications for financial assistance shall be made by the local authority 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 of any inadequacies in the submittal. The local authority may correct any inadequacies and resubmit the application.
D. Upon determination by the department that an application is complete, the application will be ranked utilizing the priority system and will be placed on the priority list.
[2-5-87; 11-18-93; 20.7.5.11 NMAC - Rn, 20 NMAC 7.5.201 & A, 7/16/2000]
20.7.5.12 PRIORITY SYSTEM AND PRIORITY LIST.
A. Financial assistance shall only be made to local authorities 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.
[2-5-87; 11-18-93; 20.7.5.12 NMAC - Rn, 20 NMAC 7.5.202, 7/16/2000]
20.7.5.13 ELIGIBLE AND INELIGIBLE FINANCIAL ASSISTANCE ITEMS.
A. Eligible items 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 that employ or contract with a registered professional engineer to provide and be responsible for engineering services on the project. Such services include, but are not limited to an engineering report, construction contract documents, supervision of construction and start-up services.
C. Ineligible items include:
(1) the costs of water rights;
(2) local 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.
[2-5-87; 11-24-88; 11-18-93; 20.7.5.13 NMAC - Rn, 20 NMAC 7.5.203 & A, 7/16/2000; A, 11/15/2007]
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), 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 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 (2%) of the unpaid principal balance of the refinanced loan will be assessed against the local authority 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 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 twenty 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. The base rate for the loan portion of the financial assistance shall not exceed three percent. 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. The following 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) An interest rate which shall not exceed two percent, when the local authority’s median household income is less than the statewide non-metropolitan median household income based on the most current decennial U.S. bureau of census statistics.
(2) An interest rate which shall not exceed one percent when the local authority's median household income is less than three-fourths of the statewide non-metropolitan median household income based upon the most current decennial 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 ($15.00) 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 is less than three-fourths of the statewide non-metropolitan median household income based upon the most current decennial U.S. bureau of census statistics.
I. 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. 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) nondiscrimination.
K. In the event of default by the local authority, 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.
[11-18-93; 11-30-95; 09-30-98; 20.7.5.14 NMAC - Rn, 20 NMAC 7.5.204 & N, 7/16/2000; & A, 7/16/2000; A, 11/15/2007]
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 12/5/67;
WQC Rule 72-1, Water Quality Control Commission Regulations, filed 8/4/72;
WQCC Rule 77-1, Amended Water Quality Control Commission Regulations, filed 1/18/77;
WQCC Rule 81-2, Water Quality Control Commission Regulations, filed 6/2/81;
WQCC Rule 82-1, Water Quality Control Commission Regulations, filed 8/19/82.
OTHER HISTORY:
That applicable portion of WQCC Rule 82-1, Water Quality Control Commission Regulations (filed 8/19/82) was renumbered, reformatted and replaced by 20 NMAC 7.5, Wastewater and Water Supply Facilities - Wastewater Facility Construction Loans, effective 11/30/95.
20 NMAC 7.5, Wastewater and Water Supply Facilities - Wastewater Facility Construction Loans (filed 10/25/95) renumbered, reformatted, amended, and replaced by 20.7.5 NMAC, Wastewater and Water Supply Facilities - Wastewater Facility Construction Loans, effective 7/16/2000.