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Committee debates bill 2 15 requiring interest on disaster loans be returned to revolving fund; members urge caution
Summary
Bill 2 15 would require interest earned on certain low‑ or no‑interest disaster loans to be returned to the natural disaster revolving fund rather than retained by local political subdivisions; committee members raised concerns about retroactivity and local projects already planned using held funds.
A Senate committee discussed bill 2 15, which would require that interest or income generated from certain low‑ or no‑interest disaster loans to political subdivisions be returned to the natural disaster revolving fund rather than retained by the borrowing entity.
Staff asked for help explaining the measure. A staff speaker (recorded as Speaker 6) summarized the bill: if a governmental political subdivision received low‑ or no‑interest disaster loans and that loan generated income, current practice allowed the political subdivision to keep that income; the bill would require that interest to be returned to the fund.
Committee members noted practical concerns. Speaker 3 said the state treasurer currently holds roughly "$40,000,000" in such disaster funds that have not yet been spent and that some of those resources were being used for operations or were about to be put out to bid for projects. Senator Campos warned against setting a precedent that would prevent communities such as Mora County, Ruidoso and Las Vegas from using resources already authorized for local projects. The chair suggested any change could be prospective rather than retroactive and indicated the bill would receive further consideration in Conservation and Finance committees so guardrails could be added.
Procedure and outcome: committee members ultimately excluded 2 15 from a motion that read multiple bills into committee reports (members explicitly noted they would "skip 2 15" in that motion). The committee advanced other listed bills into committee reports by unanimous consent and adjourned; the transcript records no final vote or formal disposition on 2 15 itself.
Why it matters: The bill would change whether local political subdivisions may retain interest on disaster loans, potentially affecting local project budgets and the amount returned to the state revolving fund for disaster recovery.
Next steps: The chair said the bill would be discussed further with the administration and could be refined with guardrails and a prospective effective date.
