Staff member Marquita of the New Mexico Finance Authority told a legislative oversight committee the Public Project Revolving Fund, known as the PPRF, can provide lower‑cost financing for local governments and will temporarily expand eligibility to include rural electric cooperatives and operate without prior legislative authorization for three years under a statutory suspension. "We were able to save them what we think will be closer to a million dollars in debt service," Marquita said, describing a recent loan to a hospital district in Colfax County.

The change matters because many small communities cannot efficiently access the bond market, NMFA presenters said. The PPRF combines its own high credit rating and a secondary pledge of the governmental gross receipts tax (GGRT) with disadvantaged funding that can include 0% or 2% loans for qualifying borrowers. Committee members pressed staff on how the PPRF sets collateral and repayment expectations.

NMFA staff said the authority currently has among the highest ratings in the state, with roughly $1 billion in senior‑lien debt and about $333 million in subordinate lien debt. Staff said the fund expects a large subordinate lien deal in the $225 million range and that putting the next ABC water authority loan into the subordinate lien preserves senior‑lien capacity for other borrowers. "We have substantial capacity in the subordinate lien right now," said a staff member identified as Chip.

Officials described the GGRT as the program's foundational credit support. The agency said GGRT receipts have grown from about $9 million in the fund's early years to more than $40 million annually, allowing the authority to make disadvantaged loans and reimbursements without requiring every small loan to be reimbursed into a bond issue. Staff said the PPRF has made loans as small as $5,000 and has made loans as large as $127 million to date; an upcoming ABC transaction could increase that top amount.

Presenters also summarized a set of proposed rule changes the NMFA will bring back to the committee in September after review by the NMFA board. The edits include adding rural electric cooperatives as eligible entities (a change arising from Senate Bill 170), removing duplicative or overly restrictive language in the financial‑approval section, clarifying that planning and design may stand on their own as an eligible public project, and explaining that locally chartered schools may apply directly while state (PEC‑chartered) schools cannot be the applicant in the same manner. Staff said previous edits in 2024 already added housing and nonprofit housing developers as qualified uses under Senate Bill 216.

Committee members asked detailed questions about pledge priority for net‑system‑revenue loans, loan size caps and how the PPRF treats subordinate and senior liens. Staff answered that the NMFA typically takes a net‑system revenue pledge from utility systems and requires coverage ratios (the example given was roughly a 1.25–1.30 coverage requirement). They said the authority sometimes takes a subordinate position when required by federal lenders such as USDA or when an entity already has a well‑established bonding structure.

On the proposed rule removals, staff said much of the language being removed already exists in board policy or federal tax guidance and that the edits are intended to reduce redundancy and clarify internal processes. Committee members urged keeping some language in the rule text as a check and balance; staff said the agency will return to the committee with final text in September.

The agency did not propose any immediate formal actions during the presentation; staff requested committee feedback and said they will take that feedback to the NMFA board and then return with final rules at a future meeting. The committee did not vote on any matter during this presentation.

Key figures and numbers discussed included the PPRF's roughly $1 billion senior lien and $333 million subordinate lien portfolio, anticipated $225 million subordinate issue, GGRT revenues now over $40 million annually, disadvantaged loan rates of 0% or 2% for qualifying low‑income jurisdictions, example savings of about $1 million over 20 years for a $5 million project using PPRF financing versus a standalone bond, and past loans ranging from $5,000 to $127 million.