A. The authority with the approval of the governor and as authorized in the intended use plan may transfer up to one-third of a drinking water state revolving loan fund capitalization grant to the wastewater facility construction loan fund. This provision is available one year after the receipt of the first full capitalization grant and will expire with the capitalization grant of the year 2002. Before the authority makes the transfer, the authority shall:

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(1)     outline the transfer in the applicable intended use plans for both the drinking water state revolving loan fund and the wastewater facility construction loan fund; and

(2)     report the intended transfer to the legislature. B. The authority will have the power:

(1)     to foreclose upon or attach any drinking water facility, property or interest in the facility pledged, mortgaged or otherwise available as security for a project financed in whole or in part pursuant to the Drinking Water State Revolving Loan Fund Act in the event of a default by a local authority;

(2)     to acquire and hold title to or leasehold interest in real and personal property and to sell, convey or lease that property for the purpose of satisfying a default or enforcing the provisions of a loan agreement; and

(3)     to enforce its rights by suit or mandamus or may utilize all other available remedies under state law in the event of default by a local authority.

C. The authority will have the power to issue bonds or refunding bonds pursuant to the New Mexico Finance Authority Act [N.M. Stat. Ann. Chapter 6, Article 21] and the Drinking Water State Revolving Loan Fund Act when the authority determines that a bond issue is required or desirable to implement the provisions of the Drinking Water State Revolving Loan Fund Act.

D. As security for the payment of the principal and interest on bonds issued by the authority, the authority is authorized to pledge, transfer and assign:

(1)     any obligations of each local authority, payable to the authority; (2)     the security for the local authority obligations;

(3)     any grant, subsidy or contribution from the United States or any of its agencies or instrumentalities; or

(4)     any income, revenues, funds or other money of the authority from any other source appropriated or authorized for use for the purpose of implementing the provisions of the Drinking Water State Revolving Loan Fund Act, including the fund.

E. The bonds and other obligations issued by the authority shall be issued and delivered in accordance with the provisions of the New Mexico Finance Authority Act and may be sold at any time the authority determines appropriate. The authority may apply the proceeds of the sale of the bonds to:

(1)     the purposes of the Drinking Water State Revolving Loan Fund Act or the purposes for which the fund may be used;

(2)     the payment of interest on bonds issued by the authority for a period not to exceed three years from the date of issuance of the bonds; and

(3)     the payment of all expenses, including publication and printing charges, attorney fees, financial advisory and underwriter fees and premiums or commissions that the authority determines are necessary or advantageous in connection with the recommendation, advertisement, sale, creation and issuance of bonds.

F. In the event that funds are not available for a loan for a drinking water facility project when application is made, in order to accelerate the completion of any drinking water facility project, the local authority may, with the approval of the authority, obligate such local authority to provide local funds to pay that portion of the cost of the drinking water facility project that the authority agrees to make available by loan, and the authority may reimburse the amount expended on its behalf by the local authority.

G. Authority members or employees and any person executing bonds issued pursuant to the New Mexico Finance Authority Act and Drinking Water State Revolving Loan Fund Act shall not be liable personally on such bonds or be subject to any personal liability or accountability by reason of the issuance thereof.

H. All bonds, notes and certificates issued by the authority shall be special obligations of the authority, payable solely from the revenue, income, fees or charges that may, pursuant to the provisions of the New Mexico Finance Authority Act and the Drinking Water State Revolving Loan Fund Act, be pledged to the payment of such obligations, and the bonds, notes or certificates shall not create an obligation, debt or liability of the state. No breach of any pledge, obligation or agreement of the authority shall impose a pecuniary liability upon the state or a charge upon its general credit or taxing power.