STATE HIGHWAY PROJECT BONDS, the official text

SENATE BILL 2

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

Roberto "Bobby" J. Gonzales and George K. Muñoz and Pete Campos
and Art De La Cruz and Benny Shendo, Jr.

AN ACT

RELATING TO THE FINANCING OF HIGHWAY PROJECTS; PROVIDING
ADDITIONAL BONDING AUTHORITY TO THE STATE TRANSPORTATION
COMMISSION FOR STATE HIGHWAY PROJECTS IDENTIFIED IN THE
STATEWIDE TRANSPORTATION IMPROVEMENT PROGRAM; REQUIRING THE
DEPARTMENT OF TRANSPORTATION TO INCLUDE A REPORT ON HIGHWAY
PROJECT SELECTION AND PRIORITIES FINANCED BY BONDS IN ITS
ANNUAL BUDGET REQUEST; INCREASING THE WEIGHT DISTANCE TAX FOR
MOTOR VEHICLES OTHER THAN BUSES; INCREASING REGISTRATION FEES
FOR PASSENGER VEHICLES; REQUIRING ADDITIONAL REGISTRATION FEES
FOR ELECTRIC AND PLUG-IN HYBRID ELECTRIC VEHICLES AND
DISTRIBUTING THE ADDITIONAL FEES TO THE STATE ROAD FUND;
ADJUSTING CERTAIN FORMULAIC DISTRIBUTIONS OF MOTOR VEHICLE
FEES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. Section 7-15A-6 NMSA 1978 (being Laws 1988,
Chapter 73, Section 33, as amended) is amended to read:

"7-15A-6. TAX RATE FOR MOTOR VEHICLES OTHER THAN BUSES--REDUCTION OF RATE FOR ONE-WAY HAULS.--

A. For on-highway operations of motor vehicles
other than buses, the weight distance tax shall be computed in
accordance with the following schedule:

Declared Gross Weight Tax Rate

(Gross Vehicle Weight) (Mills per Mile)

26,001 to 28,000 [11.01] 14.86

28,001 to 30,000 [11.88] 16.04

30,001 to 32,000 [12.77] 17.24

32,001 to 34,000 [13.64] 18.41

34,001 to 36,000 [14.52] 19.60

36,001 to 38,000 [15.39] 20.78

38,001 to 40,000 [16.73] 22.59

40,001 to 42,000 [18.05] 24.37

42,001 to 44,000 [19.36] 26.14

44,001 to 46,000 [20.69] 27.93

46,001 to 48,000 [22.01] 29.71

48,001 to 50,000 [23.33] 31.50

50,001 to 52,000 [24.65] 33.28

52,001 to 54,000 [25.96] 35.05

54,001 to 56,000 [27.29] 36.84

56,001 to 58,000 [28.62] 38.64

58,001 to 60,000 [29.93] 40.41

60,001 to 62,000 [31.24] 42.17

62,001 to 64,000 [32.58] 43.98

64,001 to 66,000 [33.90] 45.77

66,001 to 68,000 [35.21] 47.53

68,001 to 70,000 [36.52] 49.30

70,001 to 72,000 [37.86] 51.11

72,001 to 74,000 [39.26] 53.00

74,001 to 76,000 [40.71] 54.96

76,001 to 78,000 [42.21] 56.98

78,001 and over [43.78] 59.10.

B. All motor vehicles for which the tax is computed
under Subsection A of this section shall pay a tax that is two-thirds of the tax computed under Subsection A of this section
if:

(1) the motor vehicle is customarily used for
one-way haul;

(2) forty-five percent or more of the mileage
traveled by the motor vehicle for a registration year is
mileage that is traveled empty of all load; and

(3) the registrant, owner or operator of the
vehicle attempting to qualify under this subsection has made a
sworn application to the department to be classified under this
subsection for a registration year and has given whatever
information is required by the department to determine the
eligibility of the vehicle to be classified under this
subsection and the vehicle has been so classified."

SECTION 2. Section 66-6-2 NMSA 1978 (being Laws 1978,
Chapter 35, Section 337, as amended) is amended to read:

"66-6-2. PASSENGER VEHICLES--REGISTRATION FEES.--For the
registration of motor vehicles other than motorcycles, trucks,
buses and tractors, the division shall collect the following
fees for each twelve-month registration period:

A. for a vehicle whose gross factory shipping
weight is not more than two thousand pounds, [twenty-seven
dollars ($27.00)] thirty-three dollars seventy-five cents
($33.75); provided, however, that after five years of
registration, calculated from the date when the vehicle was
first registered in this or another state, the fee is [twenty-one dollars ($21.00)] twenty-six dollars twenty-five cents
($26.25);

B. for a vehicle whose gross factory shipping
weight is more than two thousand but not more than three
thousand pounds, [thirty-nine dollars ($39.00)] forty-eight
dollars seventy-five cents ($48.75); provided, however, that
after five years of registration, calculated from the date when
the vehicle was first registered in this or another state, the
fee is [thirty-one dollars ($31.00)] thirty-eight dollars
seventy-five cents ($38.75);

C. for a vehicle whose gross factory shipping
weight is more than three thousand pounds, [fifty-six dollars
($56.00)] seventy dollars ($70.00); provided, however, that
after five years of registration, calculated from the date when
the vehicle was first registered in this or another state, the
fee is [forty-five dollars ($45.00)] fifty-six dollars twenty-five cents ($56.25); and

D. for a vehicle registered pursuant to the
provisions of this section, a tire recycling fee of one dollar
fifty cents ($1.50)."

SECTION 3. A new section of the Motor Vehicle Code is
enacted to read:

"[NEW MATERIAL] ADDITIONAL REGISTRATION FEE--ELECTRIC AND
PLUG-IN HYBRID ELECTRIC VEHICLES.--

A. For registration of vehicles subject to the
registration fees imposed by Section 66-6-2 NMSA 1978, there is
imposed an additional annual fee due at the time of initial
registration and subsequent registration renewals in the
following amounts for each twelve-month period that an electric
vehicle with a gross vehicle weight of twenty-six thousand
pounds or less is registered:

(1) beginning January 1, 2027 and prior to
January 1, 2028, seventy dollars ($70.00);

(2) beginning January 1, 2028 and prior to
January 1, 2029, eighty dollars ($80.00); and

(3) on and after January 1, 2029, ninety
dollars ($90.00).

B. For registration of vehicles subject to the
registration fees imposed by Section 66-6-2 NMSA 1978, there is
imposed an additional annual fee due at the time of initial
registration and subsequent registration renewals in the
following amounts for each twelve-month period that a plug-in
hybrid electric vehicle with a gross vehicle weight of
twenty-six thousand pounds or less is registered:

(1) beginning January 1, 2027 and prior to
January 1, 2028, thirty-five dollars ($35.00);

(2) beginning January 1, 2028 and prior to
January 1, 2029, forty dollars ($40.00); and

(3) on and after January 1, 2029, forty-five
dollars ($45.00).

C. All fees collected pursuant to this section
shall be paid to the state treasurer to the credit of the motor
vehicle suspense fund with distribution in accordance with
Section 66-6-23 NMSA 1978.

D. The division shall determine whether a motor
vehicle is an electric vehicle or a plug-in hybrid electric
vehicle based on the vehicle's fuel type or power train
classification as identified through the vehicle identification
number decoding process or other standardized vehicle attribute
data source used by the division."

SECTION 4. Section 66-6-23 NMSA 1978 (being Laws 1978,
Chapter 35, Section 358, as amended) is amended to read:

"66-6-23. DISPOSITION OF FEES.--

A. After the necessary disbursements for refunds
and other purposes have been made, the money remaining in the
motor vehicle suspense fund, except for remittances received
within the previous two months that are unidentified as to
source or disposition, shall be distributed as follows:

(1) to each municipality, county or fee agent
operating a motor vehicle field office:

(a) an amount equal to six dollars
($6.00) per driver's license and five dollars ($5.00) per
identification card or motor vehicle or motorboat registration
or title transaction performed;

(b) for each such agent determined by
the secretary pursuant to Section 66-2-16 NMSA 1978 to have
performed ten thousand or more transactions in the preceding
fiscal year, other than a class A county with a population
exceeding three hundred thousand or a municipality with a
population exceeding three hundred thousand that has been
designated as an agent pursuant to Section 66-2-14.1 NMSA 1978,
an amount equal to one dollar ($1.00) in addition to the amount
distributed pursuant to Subparagraph (a) of this paragraph for
each driver's license, identification card, motor vehicle
registration, motorboat registration or title transaction
performed; and

(c) to each military installation
designated as a fee agent pursuant to Section 66-2-14.1 NMSA
1978, an amount equal to one dollar fifty cents ($1.50) in
addition to the amount distributed pursuant to Subparagraph (a)
of this paragraph for each administrative service fee remitted
by the military installation to the department pursuant to
Subsection A of Section 66-2-16 NMSA 1978;

(2) to each municipality or county, other than
a class A county with a population exceeding three hundred
thousand or a municipality with a population exceeding three
hundred thousand that has been designated as an agent pursuant
to Section 66-2-14.1 NMSA 1978, operating a motor vehicle field
office, an amount equal to one dollar fifty cents ($1.50) for
each administrative service fee remitted by that county or
municipality to the department pursuant to the provisions of
Subsection A of Section 66-2-16 NMSA 1978;

(3) to the state road fund:

(a) an amount equal to the fees
collected pursuant to Sections 66-7-413 and 66-7-413.4 NMSA
1978;

(b) an amount equal to the fee collected
pursuant to Section 66-3-417 NMSA 1978;

(c) the remainder of each driver's
license fee collected by the department employees from an
applicant to whom a license is granted after deducting from the
driver's license fee the amount of the distribution authorized
in Paragraph (1) of this subsection with respect to that
collected driver's license fee; [and]

(d) an amount equal to fifty percent of
the fees collected pursuant to Section 66-6-19 NMSA 1978; and

(e) an amount equal to the fees
collected pursuant to Section 3 of this 2026 act;

(4) to the local governments road fund, the
amount of the fees collected pursuant to Subsection B of
Section 66-5-33.1 NMSA 1978 and the remainder of the fees
collected pursuant to Subsection A of Section 66-5-408 NMSA
1978;

(5) to the department:

(a) any amounts reimbursed to the
department pursuant to Subsection D of Section 66-2-14.1 NMSA
1978;

(b) an amount equal to two dollars
($2.00) of each motorcycle registration fee collected pursuant
to Section 66-6-1 NMSA 1978;

(c) an amount equal to the fees provided
for in Subsection D of Section 66-2-7 NMSA 1978, Subsection E
of Section 66-2-16 NMSA 1978, Subsections K and L of Section
66-3-6 NMSA 1978 other than the administrative fee, Subsection
C of Section 66-5-44 NMSA 1978 and Subsection B of Section
66-5-408 NMSA 1978;

(d) the amounts due to the department
for the manufacture and issuance of a special registration
plate collected pursuant to the section of law authorizing the
issuance of the specialty plate;

(e) an amount equal to the registration
fees collected pursuant to Section 66-6-6.1 NMSA 1978 for the
purposes of enforcing the provisions of the Mandatory Financial
Responsibility Act and for creating and maintaining a
multilanguage noncommercial driver's license testing program;
and after those purposes are met, the balance of the
registration fees shall be distributed to the department to
defray the costs of operating the division;

(f) an amount equal to fifty cents
($.50) for each administrative fee remitted to the department
by a county or municipality operating a motor vehicle field
office pursuant to Subsection A of Section 66-2-16 NMSA 1978;

(g) an amount equal to one dollar
twenty-five cents ($1.25) for each administrative fee collected
by the department or any of its agents other than a county or
municipality operating a motor vehicle field office pursuant to
Subsection A of Section 66-2-16 NMSA 1978; and

(h) an amount equal to the royalties or
other consideration paid by commercial users of databases of
motor vehicle-related records of the department pursuant to
Subsection C of Section 14-3-15.1 NMSA 1978 for the purpose of
defraying the costs of maintaining databases of motor vehicle-related records of the department; and after that purpose is
met, the balance of the royalties and other consideration shall
be distributed to the department to defray the costs of
operating the division or for use pursuant to Subsection F of
Section 66-6-13 NMSA 1978;

(6) to each New Mexico institution of higher
education, an amount equal to that part of the fees distributed
pursuant to Paragraph (2) of Subsection D of Section 66-3-416
NMSA 1978 proportionate to the number of special registration
plates issued in the name of the institution to all such
special registration plates issued in the name of all
institutions;

(7) to the armed forces veterans license fund,
the amount to be distributed pursuant to Paragraph (2) of
Subsection E of Section 66-3-419 NMSA 1978;

(8) to the children's trust fund, the amount
to be distributed pursuant to Paragraph (2) of Subsection D of
Section 66-3-420 NMSA 1978;

(9) to the department of transportation, an
amount equal to the fees collected pursuant to Section 66-5-35
NMSA 1978;

(10) to the state equalization guarantee
distribution made annually pursuant to the general
appropriation act, an amount equal to one hundred percent of
the driver safety fee collected pursuant to Subsection D of
Section 66-5-44 NMSA 1978;

(11) to the motorcycle training fund, seven
dollars ($7.00) of each motorcycle registration fee collected
pursuant to Section 66-6-1 NMSA 1978;

(12) to the recycling and illegal dumping
fund:

(a) fifty cents ($.50) of the tire
recycling fee collected pursuant to the provisions of Section
66-6-1 NMSA 1978;

(b) fifty cents ($.50) of each of the
tire recycling fees collected pursuant to the provisions of
Sections 66-6-2 and 66-6-4 NMSA 1978; and

(c) twenty-five cents ($.25) of each of
the tire recycling fees collected pursuant to Sections 66-6-5
and 66-6-8 NMSA 1978;

(13) to the highway infrastructure fund:

(a) fifty cents ($.50) of the tire
recycling fee collected pursuant to the provisions of Section
66-6-1 NMSA 1978;

(b) one dollar ($1.00) of each of the
tire recycling fees collected pursuant to the provisions of
Sections 66-6-2 and 66-6-4 NMSA 1978; and

(c) twenty-five cents ($.25) of each of
the tire recycling fees collected pursuant to Sections 66-6-5
and 66-6-8 NMSA 1978;

(14) to each county, an amount equal to fifty
percent of the fees collected pursuant to Section 66-6-19 NMSA
1978 multiplied by a fraction, the numerator of which is the
total mileage of public roads maintained by the county and the
denominator of which is the total mileage of public roads
maintained by all counties in the state;

(15) to the litter control and beautification
fund, an amount equal to the fees collected pursuant to Section
66-6-6.2 NMSA 1978;

(16) to the local government division of the
department of finance and administration, an amount equal to
the fees collected pursuant to Section 66-3-424.3 NMSA 1978 for
distribution to each county to support animal control spaying
and neutering programs in an amount proportionate to the number
of residents of that county who have purchased pet care special
registration plates pursuant to Section 66-3-424.3 NMSA 1978;
and

(17) to the Cumbres and Toltec scenic railroad
commission, twenty-five dollars ($25.00) collected pursuant to
the Cumbres and Toltec scenic railroad special registration
plate.

B. The balance, exclusive of unidentified
remittances, shall be distributed in accordance with Section
66-6-23.1 NMSA 1978.

C. If any of the paragraphs, subsections or
sections referred to in Subsection A of this section are
recompiled or otherwise redesignated without a corresponding
change to Subsection A of this section, the reference in
Subsection A of this section shall be construed to be the
recompiled or redesignated paragraph, subsection or section."

SECTION 5. Section 66-6-23.1 NMSA 1978 (being Laws 1999,
Chapter 49, Section 8, as amended) is amended to read:

"66-6-23.1. FORMULAIC DISTRIBUTION.--

A. The balance from Section 66-6-23 NMSA 1978 shall
be transferred or distributed by the state treasurer on or
before the last day of the month next after its receipt, as
follows:

(1) [seventy-four and sixty-five] seventy-nine
and seventy-two hundredths percent shall be distributed to the
state road fund;

(2) [seven and six-tenths] six and eight-hundredths percent shall be transferred to each county in the
proportion, determined by the department in accordance with
Subsection B of this section, that the registration fees for
vehicles in that county are to the total registration fees for
vehicles in all counties;

(3) [seven and six-tenths] six and eight-hundredths percent shall be transferred to the counties, with
each county receiving an amount equal to the proportion,
determined by the secretary of transportation in accordance
with Subsection D of this section, that the mileage of public
roads maintained by the county is to the total mileage of
public roads maintained by all counties of the state. Amounts
distributed to each county in accordance with this paragraph
shall be credited to the respective county road fund and be
used for the improvement and maintenance of the public roads in
the county and to pay for the acquisition of rights of way and
material pits. For this purpose, the board of county
commissioners of each of the respective counties shall certify
by April 1 of each year to the secretary of transportation the
total mileage as of April 1 of that year; provided that in
their report, the boards of county commissioners shall identify
each of the public roads maintained by them by name, route and
location. By agreement and in cooperation with the department
of transportation, the boards of county commissioners of the
various counties may use or designate any of the funds provided
in this paragraph for a federal aid program;

(4) [four and six-hundredths] three and
twenty-five hundredths percent shall be allocated among the
counties in the proportion, determined by the department in
accordance with Subsection B of this section, that the
registration fees for vehicles in that county are to the total
registration fees for vehicles in all counties. The amount
allocated to each county shall be transferred to the
incorporated municipalities within the county in the
proportion, determined by the department of finance and
administration in accordance with Subsection C of this section,
that the sum of net taxable value, as that term is defined in
the Property Tax Code, plus the assessed value, as that term is
used in the Oil and Gas Ad Valorem Production Tax Act and in
the Oil and Gas Production Equipment Ad Valorem Tax Act,
determined for the incorporated municipality is to the sum of
net taxable value plus assessed value determined for all
incorporated municipalities within the county. Amounts
transferred to incorporated municipalities pursuant to the
provisions of this paragraph shall be used for the
construction, maintenance and repair of streets within the
municipality and for payment of paving assessments against
property owned by federal, county or municipal governments. In
a county in which there are no incorporated municipalities, the
amount allocated pursuant to this paragraph shall be
transferred to the county government road fund and used in
accordance with the provisions of Paragraph (3) of this
subsection; and

(5) [six and nine-hundredths] four and eighty-seven hundredths percent shall be allocated among the counties
in the proportion, determined by the department of finance and
administration in accordance with Subsection C of this section,
that the registration fees for vehicles in that county are to
the total registration fees for vehicles in all counties. The
amount allocated to each county shall be transferred to the
county and incorporated municipalities within the county in the
proportion, determined by the department of finance and
administration in accordance with Subsection B of this section,
that the computed taxes due for the county and each
incorporated municipality within the county bear to the total
computed taxes due for the county and incorporated
municipalities within the county. For the purposes of this
paragraph, the term "computed taxes due" for a jurisdiction
means the sum of the net taxable value, as that term is defined
in the Property Tax Code, plus the assessed value, as that term
is used in the Oil and Gas Ad Valorem Production Tax Act and in
the Oil and Gas Production Equipment Ad Valorem Tax Act, for
that jurisdiction multiplied by an average of the rates for
residential and nonresidential property imposed for that
jurisdiction pursuant to Subsection B of Section 7-37-7 NMSA
1978.

B. To carry out the provisions of this section,
during the month of June of each year:

(1) the department shall determine and certify
to the department of finance and administration the proportions
that the department is required to determine pursuant to
Subsection A of this section using information for the
preceding calendar year on the number of vehicles registered in
each county based on the address of the owner or place where
the vehicle is principally located, the registration fees for
the vehicles registered in each county, the total number of
vehicles registered in the state and the total registration
fees for all vehicles registered in the state; and

(2) the department of finance and
administration shall determine the proportions that the
department of finance and administration is required to
determine pursuant to this subsection based upon the net
taxable value, as that term is defined in the Property Tax
Code, and the assessed value, as that term is used in the Oil
and Gas Ad Valorem Production Tax Act and the Oil and Gas
Production Equipment Ad Valorem Tax Act, for the preceding tax
year and the tax rates imposed pursuant to Subsection B of
Section 7-37-7 NMSA 1978 in the preceding September.

C. By June 30 of each year, the department of
finance and administration shall determine the appropriate
percentage of money to be transferred to each county and
municipality for each purpose in accordance with Subsection A
of this section based upon the proportions determined by or
certified to the department of finance and administration. The
percentages determined shall be used to compute the amounts to
be transferred to the counties and municipalities during the
succeeding fiscal year.

D. The board of county commissioners of each of the
respective counties shall, by April 1 of every year, certify
reports to the secretary of transportation of the total mileage
of public roads maintained by each county as of April 1 of
every year; provided that in their reports, the boards of
county commissioners shall identify each of the public roads
maintained by them by name, route and location. By July 1 of
every year, the secretary of transportation shall verify the
reports of the counties and revise, if necessary, the total
mileage of public roads maintained by each county. The mileage
verified by the secretary of transportation shall be the
official mileage of public roads maintained by each county.
Distribution of amounts to a county for road purposes shall be
made in accordance with this section.

E. If a county has not made the required mileage
certification pursuant to Section 67-3-28.3 NMSA 1978 by April
1 of any year, the secretary of transportation shall estimate
the mileage maintained by those counties for the purpose of
making distribution to all counties, and the amount calculated
to be distributed each month to those counties not certifying
mileage shall be reduced by one-third each month for that
fiscal year, and that amount not distributed to those counties
shall be distributed equally to all counties that have
certified mileages."

SECTION 6. Section 67-3-59.1 NMSA 1978 (being Laws 1989,
Chapter 157, Section 1, as amended) is amended to read:

"67-3-59.1. STATE HIGHWAY DEBENTURES--ISSUANCE--LIMITS--
APPROVAL--COUPONS.--

A. In order to provide funds to finance state
highway projects, including state highway projects that are
required for the waste isolation pilot project and are eligible
for federal reimbursement or payment as authorized by federal
legislation, the state transportation commission is authorized,
subject to the limitations of this section, to issue bonds from
time to time, payable from federal funds not otherwise
obligated that are paid into the state road fund and the
proceeds of the collection of taxes and fees that are required
by law to be paid into the state road fund and not otherwise
pledged solely to the payment of outstanding bonds and
debentures.

B. Except as provided in Subsections C, [and] D and
E of this section, the total aggregate outstanding principal
amount of bonds issued from time to time pursuant to this
section, secured by or payable from federal funds not otherwise
obligated that are paid into the state road fund and the
proceeds from the collection of taxes and fees required by law
to be paid into the state road fund, shall not, without
additional authorization of the state legislature, exceed one
hundred fifty million dollars ($150,000,000) at any given time,
subject to the following provisions:

(1) the total aggregate outstanding principal
amount of bonds issued for state highway projects that are
required for the waste isolation pilot project and are eligible
for federal reimbursement or payment as authorized by federal
legislation shall not exceed one hundred million dollars
($100,000,000); and

(2) the total aggregate outstanding principal
amount of bonds issued for state highway projects other than
state highway projects that are required for the waste
isolation pilot project and are eligible for federal
reimbursement or payment as authorized by federal legislation
shall not exceed fifty million dollars ($50,000,000).

C. Upon specific authorization and appropriation by
the legislature, and subject to the limitations of Subsection D
of this section, an additional amount of bonds may be issued
pursuant to this section for state highway projects, to be
secured by or payable from taxes or fees required by law to be
paid into the state road fund and federal funds not otherwise
obligated that are paid into the state road fund, and, as
applicable, taxes or fees required by law to be paid into the
highway infrastructure fund, as follows:

(1) an aggregate outstanding principal amount
of bonds, not to exceed six hundred twenty-four million dollars
($624,000,000), for major highway infrastructure projects for
which the department has, prior to January 1, 1998, submitted
or initiated the process of submitting a plan to the federal
highway administration for innovative financing pursuant to 23
USCA Sections 122 and 307;

(2) an aggregate outstanding principal amount
of bonds, not to exceed one hundred million dollars
($100,000,000), for state highway projects that are required
for the waste isolation pilot project and are eligible for
federal reimbursement; and

(3) an aggregate outstanding principal amount
of bonds, not to exceed four hundred million dollars
($400,000,000), for other state highway projects.

D. The total amount of bonds that may be issued by
the state transportation commission for state highway projects
pursuant to Subsection C of this section shall not exceed a
total aggregate outstanding principal amount of:

(1) three hundred million dollars
($300,000,000) prior to July 1, 1999;

(2) six hundred million dollars ($600,000,000)
from July 1, 1999 through June 30, 2000;

(3) nine hundred million dollars
($900,000,000) from July 1, 2000 through June 30, 2001; and

(4) one billion one hundred twenty-four
million dollars ($1,124,000,000) after June 30, 2001.

E. An additional one billion five hundred million
dollars ($1,500,000,000) of total bond proceeds may be issued
pursuant to this section for state highway projects identified
in the statewide transportation improvement program to be
secured by or payable from federal funds or from taxes or fees
not otherwise obligated and required by law to be paid into the
state road fund; provided that the issuance of the bonds shall
not cause the aggregate outstanding principal amount of bonds
issued by the state transportation commission to exceed one
billion one hundred twenty-four million dollars
($1,124,000,000). Bond proceeds issued pursuant to this
subsection shall not be used, directly or indirectly, to
redeem, refund, defease or otherwise retire any previously
issued bonds or other debt obligations of the state
transportation commission. The commission shall not issue
bonds pursuant to this subsection if the average issuance in
every fiscal year for which the bonds may be issued exceeds two
hundred ninety million dollars ($290,000,000), including a
fiscal year in which no bonds are issued; provided that the
commission may issue bonds in an amount up to two hundred
twenty million dollars ($220,000,000) for fiscal year 2026 to
secure associated federal grant funding for projects; and
provided further that bonds issued by the commission shall not
exceed a total of one hundred thirty million dollars
($130,000,000) during the December 2026 bond sale.

[E.] F. The state transportation commission may
issue bonds to refund other bonds issued pursuant to this
section by exchange or current or advance refunding.

[F.] G. Each series of bonds shall have a maturity
of no more than twenty-five years from the date of issuance.
The state transportation commission shall determine all other
terms, covenants and conditions of the bonds; provided that the
bonds shall not be issued pursuant to this section unless the
state board of finance approves the issuance of the bonds and
the principal amount of and interest rate or maximum net
effective interest rate on the bonds.

[G.] H. The bonds shall be executed with the manual
or facsimile signature of the [chairman] chair of the state
transportation commission, countersigned by the state treasurer
and attested to by the secretary of the state transportation
commission, with the seal of the state transportation
commission imprinted or otherwise affixed to the bonds.

[H.] I. Proceeds of the bonds may be used to pay
expenses incurred in the preparation, issuance and sale of the
bonds and, together with the earnings on the proceeds of the
bonds, may be used to pay rebate, penalty, interest and other
obligations relating to the bonds and the proceeds of the bonds
under the Internal Revenue Code of 1986, as amended.

[I.] J. The bonds may be sold at a public or
negotiated sale at, above or below par or through the New
Mexico finance authority. A negotiated sale shall be made with
one or more investment bankers whose services are obtained
through a competitive proposal process. For any sale, the
state transportation commission or the New Mexico finance
authority shall also procure the services of any financial
advisor or bond counsel through a competitive proposal process.
If sold at public sale, a notice of the time and place of sale
shall be published in a newspaper of general circulation in the
state, and in any other newspaper determined in the resolution
authorizing the issuance of the bonds, once each week for two
consecutive weeks prior to the date of sale. The bonds may be
purchased by the state treasurer or state investment officer.

[J.] K. This section is full authority for the
issuance and sale of the bonds, and the bonds shall not be
invalid for any irregularity or defect in the proceedings for
their issuance and sale and shall be incontestable in the hands
of bona fide purchasers or holders of the bond for value.

[K.] L. The bonds shall be legal investments for a
person or board charged with the investment of public funds and
may be accepted as security for a deposit of public money and,
with the interest thereon, are exempt from taxation by the
state and a political subdivision or agency of the state.

[L.] M. Any law authorizing the imposition or
distribution of taxes or fees paid into the state road fund or
the highway infrastructure fund or that affects those taxes and
fees shall not be amended or repealed or otherwise directly or
indirectly modified so as to impair outstanding bonds secured
by a pledge of revenues from those taxes and fees paid into the
state road fund or the highway infrastructure fund, unless the
bonds have been discharged in full or provisions have been made
for a full discharge. In addition, while any bonds issued by
the state transportation commission pursuant to the provisions
of this section remain outstanding, the powers or duties of the
commission shall not be diminished or impaired in any manner
that will affect adversely the interests and rights of the
holder of such bonds.

[M.] N. In contracting for state highway projects
to be paid in whole or in part with proceeds of bonds
authorized by this section, the department shall require that
any sand, gravel, caliche or similar material needed for the
project shall, if practicable, be mined from state lands. Each
contract shall provide that the contractor notify the
commissioner of public lands of the need for the material and
that, through lease or purchase, the material shall be mined
from state lands if:

(1) the material needed is available from
state lands in the vicinity of the project;

(2) the commissioner determines that the lease
or purchase is in the best interest of the state land trust
beneficiaries; and

(3) the cost to the contractor for the
material, including the costs of transportation, is competitive
with other available material from non-state lands.

[N.] O. Bonds issued pursuant to this section shall
be paid solely from federal funds not otherwise obligated and
taxes and fees deposited into the state road fund and, as
applicable, the highway infrastructure fund, and shall not
constitute a general obligation of the state.

P. In the budget form submitted pursuant to Section
6-3-18 NMSA 1978, the department shall include a report on
highway projects to be financed pursuant to this section. The
report shall include:

(1) justification for the selection and
priority ranking of each project, including:

(a) traffic counts, accident rates and
the expected improvements to traffic flow and health and
safety;

(b) the ranking of the pavement and
substructure conditions;

(c) an assessment of economic
development impacts; and

(d) other information deemed significant
by the department;

(2) the expected life of the proposed project;

(3) the amount of revenue required to pay the
principal and interest of outstanding and proposed bonds based
on a five- and twenty-year forecast of the state road fund; and

(4) the effect of the bond program on the
department's construction and maintenance program."

SECTION 7. EFFECTIVE DATES.--

A. The effective date of the provisions of Sections
1, 2 and 5 of this act is July 1, 2026.

B. The effective date of the provisions of Sections
3 and 4 of this act is January 1, 2027.

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