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HB 240

Income tax, state; contributions to Virginia College Savings Plan accounts, report.

2025 Regular Session Introduced by Lamont Bagby and 11 co-sponsors

Allows grants from the Drinking Water State Revolving Fund in addition to loans, expanding financing options for drinking water projects.

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Bill Summary · HB 240

Summary — HB 240: Drinking Water System Grants & Loans (New Mexico)

Status: Enacted (no specific effective date in bill) — becomes effective 90 days after adjournment (statutory default; LFC noted June 20, 2025)
Primary agencies: New Mexico Finance Authority (NMFA) and New Mexico Environment Department (NMED)

Purpose / intent

Align New Mexico’s Drinking Water State Revolving Fund (DWSRF) statute with federal Safe Drinking Water Act changes and increase state flexibility to finance drinking‑water infrastructure. The bill explicitly authorizes grants in addition to loans, redistributes certain administrative duties between NMFA and NMED, and expands borrower repayment options to improve affordability for communities.

Key provisions

  • Explicitly allows the NMFA to provide grants (in addition to loans) from the Drinking Water State Revolving Loan Fund for construction/rehabilitation of drinking water facilities.
  • Clarifies roles:
    • NMFA retains full authority to operate the DWSRF and is made responsible (not NMED) for annually applying for federal capitalization grants.
    • NMED maintains responsibility for project ranking/prioritization consistent with federal requirements (in cooperation with NMFA).
  • Extends maximum repayment periods:
    • Non‑disadvantaged communities: maximum loan term extended from 20 to 30 years.
    • Disadvantaged communities: maximum loan term extended from 30 to 40 years.
    • Loan term still may not exceed the design life of the funded project.
  • Confirms allowable uses of fund proceeds (loans, grants, purchase/refinancing of debt, guarantees, bond security) and maintains the requirement that fund activity comply with federal capitalization grant terms.
  • Authorizes NMFA to transfer up to one‑third of certain grants between the Drinking Water SRF and the Wastewater Facility Construction Loan Fund (renewal of existing authority).
  • Requires NMFA, in cooperation with NMED, to provide annual reporting and maintain fiscal controls and audits for the fund.
  • Allows NMFA to charge administrative fees (subject to federal rules) to cover fund administration.

Who is affected

  • Local authorities and public water systems (municipalities, districts, cooperatives): greater access to flexible financing (grants and longer, lower‑payment loans).
  • NMFA and NMED: adjusted responsibilities (NMFA leads federal grant application and fund administration; NMED continues project prioritization and technical cooperation).
  • State budget/federal relationship: no change to the federal/state match requirement for capitalization grants (20% state match remains).

Fiscal and policy impact

  • LFC and NMFA analysis: no material state administrative fiscal impact; the bill mainly changes program terms and authority rather than funding levels.
  • Borrowers: longer repayment terms can reduce annual debt service and improve affordability; explicit grant authority codifies practices (e.g., principal forgiveness) already used to meet federal requirements.
  • Federal compliance: statute updated to conform with 2018/2021 federal SRF changes, maintaining NM eligibility for capitalization grants.

Implementation / timeline

  • Because the bill contains no specific effective date, it takes effect under the state’s default rule (90 days after adjournment) — LFC noted June 20, 2025 as the effective date in its analysis. NMFA and NMED will need to update procedures and reporting to reflect the statutory changes.

Compiled from official sources — confirm details with the bill’s official record.

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