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Committee advances $160M severance-bond authorization for 84 water projects
Summary
The Conservation Committee unanimously recommended passage of House Bill 206, authorizing about $160 million in severance-tax bonds from the Water Project Fund for projects recommended by the Water Trust Board.
The Conservation Committee unanimously gave House Bill 206 a due-pass recommendation after an overview from New Mexico Finance Authority staff and follow-up questions from senators.
Representative (sponsor) said HB206 is the annual authorization that allows the New Mexico Finance Authority to make loans and grants from the Water Project Fund; the projects are recommended by the Water Trust Board. She told the committee that "there is about $160,000,000 that's being made available from severance tax bonds" and that 84 projects were listed on the authorization bill after technical vetting.
Committee members pressed for clarification about the number of projects and the total dollar value. Marquita Russell of the New Mexico Finance Authority said the 84 projects listed total about $238,000,000; some applicants submitted more than one project type and the finance authority will do a further vetting before final execution. She said the project authorization is for projects that applied in the current cycle (the witness stated these are for projects in 2025 and that severance tax bonds would be available in June).
Committee discussion covered geographic distribution of projects, how applicants start the planning process (Russell said communities frequently use the Local Government Planning Fund for preliminary engineering reports and councils of government to shepherd applications), and the fund's limited suitability for emergency response because of the annual application cycle.
Senators raised fairness and capacity-to-repay questions about the mix of loan and grant portions for rate-paying utilities; Russell described the Finance Authority's approach, saying loans typically range from 10% to 40% depending on an entity's capacity to repay and that the average split historically has been about 85% grant and 15% loan.
Committee members also asked whether colonias may apply; Russell replied there is no prohibition against colonia projects applying to the Water Trust Board.
The committee recorded a motion and then a unanimous due-pass recommendation to advance HB206.
Votes at a glance: House Bill 206 '160 million in severance-tax-bond authorization available; 84 projects authorized on the bill (projects total approximately $238 million). Committee action: unanimous due-pass recommendation.
