CS/SB 300 TRANSPORTATION PROJECT BONDS

Sen George K Munoz

Actions: [6] not prntd-SFC [7] DNP-CS/DP - PASSED/S (37-0) [11] HTPWC/HAFC-HTPWC

Scheduled: Not Scheduled

 Senate Bill 300 (SB 300) authorizes the issuance of severance tax bonds for certain transportation projects; establishes conditions for the expenditure and appropriation of the bond proceeds and for the reversion of unexpended balances of bond proceeds; authorizes the issuance of state transportation bonds; establishes criteria for the bonds; and requires reports. 

 Senate Bill 300 (SB 300) authorizes the State Board of Finance (SBF) to issue and sell severance tax bonds in compliance with the Severance Tax Bonding Act (STBA) for certain transportation projects, provided that the SBF only issues bonds with a term that does not extend beyond the fiscal year in which they are issued. 

The Department of Transportation (DOT) is to certify to the State Board of Finance (SBF) when the money from the proceeds of the severance tax bonds appropriated is needed for the following transportation projects: 

•	up to forty-five million dollars ($45,000,000) for acquisition of rights of way, reconstruction and improvement of the interchange at the intersection of state highway 213 and state highway 404; 
•	up to forty million dollars ($40,000,000) for acquisition of rights of way, reconstruction and improvement of the interstate 25 corridor from milepost 276 to milepost 291; 
•	up to sixty-two million eight hundred thousand dollars ($62,800,000) for acquisition of rights of way, reconstruction and improvement of the bridge on interstate 40 east of Gallup from milepost 28.7 to milepost 30.7;
•	up to eight million dollars ($8,000,000) for acquisition of rights of way and the first phase of construction of an interchange in Los Lunas to access interstate 25 at milepost 202; and 
•	up to fifty million dollars ($50,000,000) for transportation projects identified in Section 11 of the General Appropriation Act of 2024.

Before the Department of Transportation may certify for the need of severance tax bond proceeds, the project must be developed sufficiently so that the department reasonably expects to: (1) incur within six months after the applicable bond proceeds are available for the project a substantial binding obligation to a third party to expend at least five percent of the bond proceeds for the project; and (2) spend at least eighty-five percent of the bond proceeds within three years after the applicable bond proceeds are available for the project.

Except as otherwise specifically provided by law: (1) the unexpended balance from the proceeds of severance tax bonds appropriated for a project will revert to the Severance Tax Bonding Fund within six months of completion of the project, but no later than the end of Fiscal Year 2028; and (2) all remaining balances from the proceeds of severance tax bonds appropriated for a project shall revert to the severance tax bonding fund three months after the latest reversion date specified for that type of project. 

The State Transportation Commission (STC) may authorize the New Mexico Finance Authority (NMFA) to issue and sell state transportation bonds for the specified transportation projects. The Department of Transportation (DOT) must provide to the legislature and the governor a report on the progress of the transportation projects.  

 If the bill does not pass, the State Board of Finance would not be authorized to issue and sell severance tax bonds for the identified transportation projects, 

 Committee Substitute on February 7, 2024 in the Senate Finance Committee

SFCcs/SB 300: The Senate Finance Committee’s substitute for Senate Bill 300 (SB 300) provides the language for the bill. The original posted bill has only the following words: “Relating to the public peace, health, safety and welfare. Be it enacted by the legislature of the state of New Mexico:”

The bill authorizes the issuance of severance tax bonds for certain transportation projects; establishes conditions for the expenditure and appropriation of the bond proceeds and for the reversion of unexpended balances of bond proceeds; authorizes the issuance of state transportation bonds; establishes criteria for the bonds; and requires reports.