SB 253 FREIGHT LINE PROJECT, STB

Sen William E. Sharer

Actions: [4] SCC/STBTC/SFC-SCC [6]germane-STBTC

Scheduled: Not Scheduled

 Senate Bill 253 (SB 253):  This is a legislative act pertaining to capital expenditures in the state of New Mexico. This act establishes the legal framework for issuing severance tax bonds to fund a freight rail line project, imposing conditions, limitations, and accountability measures to ensure responsible use of the funds and compliance with federal regulations. 

 Senate Bill 253 (SB 253):  Purpose of the Act:
•	The act is focused on authorizing the issuance of severance tax bonds for a specific project – the construction of a freight rail line in McKinley and San Juan counties.

Authorization and Limitations:
•	Timeframe: The state board of finance is authorized to issue and sell severance tax bonds between the years 2025 and 2029.
•	The total amount of bonds to be issued is capped at $100,000,000.

Conditions for Issuance:
•	Department of Transportation Certification: The issuance of bonds is contingent on the Department of Transportation certifying the need for the bonds and confirming that federal matching funds are secured or will be provided for the project.

Expedited Issuance: 
•	The state board of finance is instructed to expedite the issuance and sale of bonds based on a finding that the funds are needed, and the project can proceed to contract within a reasonable time.

Appropriation of Proceeds:
•	The proceeds from the sale of the bonds are specifically appropriated to the Department of Transportation for the completion of the freight rail line project.

Financial Accountability:
•	The money from the bonds is not to be used for indirect costs.
•	Any unexpended balance from the bond proceeds must revert to the severance tax bonding fund within six months of completing the project.

Expiration of Authorization:
•	If the Department of Transportation does not certify the need for bond issuance by December 31, 2029, the authorization for bond issuance under this section will expire.

Compliance:
•	The state board of finance is required to take necessary steps to comply with the federal Internal Revenue Code of 1986, as amended.