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Committee advances bill to align state law with federal Drinking Water State Revolving Fund rules
Summary
House Bill 240 updates state law to permit grants from the Drinking Water State Revolving Loan Fund and to extend allowable loan terms to match recent federal changes, easing project financing for drinking water construction and rehabilitation.
Representative Herrera presented House Bill 240, which updates New Mexico statute so the state program that manages federal Drinking Water State Revolving Loan Fund (DWSRF) grants can deliver financial assistance consistent with current federal requirements.
An unnamed New Mexico Finance Authority (NMFA) representative told the committee the bill’s principal changes are: (1) allow certain portions of DWSRF capitalization awards to be provided as grants rather than only as loans or loan forgiveness; and (2) extend maximum loan terms to match federal allowance—regular projects could be financed up to 30 years and severely disadvantaged communities up to 40 years, where federal law permits longer terms than the current state statute. The NMFA representative said the prior practice used loan forgiveness to mimic grants because state law had not been updated.
Committee members asked which systems and applicants would qualify. The NMFA representative said eligible recipients must be public water systems as defined by the Environment Department, and that some regulated for-profit water utilities in the portfolio also qualify. Representative Hernandez asked whether tribal communities can apply; the NMFA representative confirmed tribal communities are eligible and that EPA sometimes sends tribal earmarks that are managed to avoid conflicts with the SRF program.
Representative Duncan and others questioned language on reimbursement when funds aren’t immediately available; the NMFA representative said the language traces to program design in the late 1990s and that reimbursements depend on specific capitalization grants and administrative rules.
Action: Ranking Member Chatfield moved the motion to “do bounce” for House Bill 240; Representative Garrett seconded; the committee approved the motion with no recorded opposition.
Why it matters: Allowing grants and extending loan terms is intended to make federal drinking-water funds easier to use for small or disadvantaged communities and to reduce administrative complexity for recipients.
