Committee Substitute February 18, 2025 in SFC: 

SFCcs/SB 115: Senate Finance Committee Substitute for Senate Bill 115 grants the New Mexico Finance Authority (NMFA) the ability to issue loans for public infrastructure projects through the Public Project Revolving Fund. The bill identifies specific public entities eligible to receive funding, including municipalities, counties, school districts, higher education institutions, and water conservation districts. Approved projects range from road and street construction, water and wastewater system upgrades, and public facility improvements to refinancing existing infrastructure debt.

Loans of $1 million or less do not require explicit legislative authorization, but the bill provides a detailed list of entities seeking larger loans. Each loan is subject to terms and conditions set by NMFA. The substitute also includes a voiding clause, which stipulates that if a listed entity does not certify its intent to proceed with a loan by the end of fiscal year 2028, the authorization for that loan will expire.

The bill includes an emergency clause, ensuring that once enacted, the authorization takes effect immediately. This allows eligible entities to proceed with loan applications without delay, expediting public infrastructure development.

Implications

SFCcs/SB 115 facilitates public infrastructure financing by expanding loan eligibility for municipalities, school districts, and public improvement districts. By specifying which entities may receive loans and outlining project types, the bill provides clear guidance for the New Mexico Finance Authority to manage fund allocations. The provision allowing smaller loans without legislative approval streamlines financing for smaller-scale projects, reducing administrative burdens.

The voiding clause ensures that authorized projects do not remain indefinitely listed without progress, allowing NMFA to reallocate funds if necessary. This prevents stagnation in fund utilization and ensures that approved projects are actively pursued. However, entities that face delays in planning or securing additional funding may find themselves unable to meet the certification deadline, requiring them to seek reauthorization in future legislative sessions.

The emergency clause accelerates the loan process, ensuring that approved projects can move forward as soon as possible. This is particularly beneficial for projects addressing urgent infrastructure needs, such as water system upgrades or road repairs. However, the immediate effect may also place pressure on local governments and agencies to quickly complete loan applications and planning processes.

By providing a structured loan approval process, the bill helps local governments and public institutions finance critical infrastructure without relying solely on direct appropriations. The bill does not allocate new state funding but instead facilitates access to revolving loan funds, maintaining financial sustainability while supporting public development efforts.

Comparison of Original SB 115 and SFCcs SB 115

The committee substitute maintains the core intent of the original SB 115 but makes three primary changes:
1.  Expanded List of Loan Recipients
  • The original bill included a broad authorization for loans from the Public Project Revolving Fund but contained a more limited list of approved recipients.
  • The committee substitute adds more entities, including additional municipalities, school districts, and public improvement districts, expanding access to financing.

2.  Inclusion of a Voiding Clause
  • The original bill did not specify a timeline for entities to confirm their intent to proceed with a loan.
  • The substitute introduces a requirement that entities must certify their intent by the end of fiscal year 2028, or their authorization will be void. This prevents unused loan authorizations from remaining indefinitely listed.
3.  Clarifications and Adjustments to Eligible Projects
  •  The substitute refines project eligibility language, ensuring clarity in the types of infrastructure improvements covered.
  •  While both versions allow for refinancing of existing debt, the substitute specifies more detailed conditions under which refinancing may occur.

These changes increase accessibility to loan funding while ensuring responsible fund management through the voiding clause. The refinements to project eligibility improve clarity for applicants, while the emergency clause ensures immediate implementation.