State officials and disaster managers told lawmakers that New Mexico set up a $100 million zero‑interest loan pool to advance immediate recovery needs after the Hermits Peak–Calf Canyon wildfire, but the money has not yet been widely spent and FEMA reimbursements are limited.

Emily Hilla, an analyst with the Legislative Finance Committee, reminded legislators that the 2023 Legislature approved $100 million in state general‑fund appropriations — implemented through Senate Bill 6 — to provide interest‑free cash flow to political subdivisions before FEMA reimburses eligible work. Hilla said that as of the most recent DFA update, “San Miguel County is the only entity that has received FEMA reimbursements,” about $703,626.70 returned to the state general fund.

Ally Rye, deputy cabinet secretary and state director at the Department of Homeland Security and Emergency Management (DHSEM), told the committee that disaster‑recovery funding is inherently a reimbursement process and that local governments often lack the cash to get work started. “The federal dollars are reimbursement program[s], which means that the funds have to be spent first before FEMA will reimburse the dollars,” she said, describing the common problem of communities that never complete projects because they lack upfront capital.

Rye said the state is urging FEMA to treat wildfire‑related cascades — soil loss, debris flows and post‑fire flooding — as part of a continuing incident period so later storm‑driven damage can qualify for recovery. She also said the state emergency operations center is at its highest activation level because of active flooding and that DHSEM is running frequent coordination meetings with affected jurisdictions to complete project paperwork and speed reimbursements.

Legislators raised several implementation issues. Representative Zachary Chatfield asked whether the federal Bureau of Reclamation or other federal owners were responsible for particular dams; staff answered that non‑jurisdictional dams are handled by the respective owners. Chatfield and Representative Robert Vincent pushed DHSEM and DFA to provide “concierge” or on‑the‑ground assistance to local governments to navigate the reimbursement process. Rye and other staff said biweekly coordination calls and on‑site staff were working directly with affected counties and communities, and that some agencies have staff living in the impacted counties to help move projects forward.

Representatives said local officials were reluctant to spend state loan dollars because of worries that work could be ineligible for FEMA $ reimbursement, or that damage from subsequent storms would wash completed work away. DHSEM said it has advised local officials they may spend available funds on eligible projects and that partial payments and documentation can be submitted to begin reimbursement even for large projects.

Committee members asked whether debris removal on private property would be reimbursed; Rye said the state has contracted for right‑of‑way and private property debris removal in some locations to relieve local burden, and that additional debris removal assistance (including work under the Public Assistance debris removal mission) is under way. Jeremy Class, bureau chief of mitigation and recovery at DHSEM, said the state is exploring a long‑term recovery program in case federal support changes and referenced Senate Bill 31, a state revolving loan program that the department is implementing.

Lawmakers and local officials described practical problems: local procurement and limited contractor capacity, complex documentation requirements, and the need to coordinate FEMA’s large‑project vs. small‑project thresholds (large projects are usually over $1 million). Representative Robert Vincent pressed for quicker partial reimbursements to avoid local cash‑flow shortfalls; DHSEM said partial reimbursements are possible when documentation is supplied.

On broader recovery cash flows, DHSEM summarized federal claims reporting for private property claims from the Hermits Peak–Calf Canyon response: roughly $5.4 billion of claims funding had been appropriated by Congress for the disaster; the claims office reported that about 47% of claim funds had been reported as paid to date, with approximately 18,800 claims totaling about $2.6 billion reported paid so far (the claims office separates its program from FEMA public assistance and is managed independently). Rye and Jeremy Class stressed that the state does not operate the claims office for private property claims and receives only secondhand reporting on that program.

Local leaders pleaded for clearer pathways to use state funding and quicker reimbursements. The mayor of Las Vegas (city) said the city is working with state and federal agencies and added that a long‑term plant redesign will be a multiyear process. Committee members asked for a written update once DFA completes reconciliation with federal offices and recommended that DHSEM and DFA provide continuing on‑the‑ground support until funds move into construction.

Less critical details: officials noted ongoing activations for other fires (Trout Fire, Cotton fires) and that DHSEM had mobilized swift‑water rescue teams and national‑guard engineers in places where post‑fire erosion poses an imminent risk.