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F I S C A L I M P A C T R E P O R T

SPONSOR Garcia

DATE TYPED 3/14/05 HB

SHORT TITLE NMFA Public Project Revolving Fund Projects SB 152/aSCONC/aSFC/aHTRC

ANALYST Kehoe

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

NFI

Public Project Revolving

Fund (See narrative)

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

New Mexico Finance Authority (NMFA)

New Mexico Environment Department (ED)

SUMMARY

Synopsis of HTRC Amendment

The House Taxation and Revenue Committee amendment strikes Senate Finance Committee

amendment #2 and in lieu thereof requests legislative authority for loans from the Public Project

Revolving Fund to 105 entities and projects. The amendment also strikes Senate Conservation

Committee amendment #2, which was an incorrect typographical change.

Synopsis of SFC Amendment

The Senate Finance Committee amendment strikes the Senate Conservation Committee amend-

ments and in lieu thereof requests legislative authority for 88 entities and projects with an ap-

proximate value of $100 million to make loans from the Public Project Revolving Fund.

Synopsis of SCONC Amendment

The Senate Conservation Committee amendment provides for punctuation corrections through-

out the bill; and adds 42 entities and projects with an approximate value of $60 million within

the bill to be considered for legislative authority to make loans from the Public Project Revolv-

ing Fund.

Senate Bill 152/aSCONC/aSFC/aHTRC -- Page 2

Synopsis of Original Bill

Senate Bill 152 authorizes NMFA to provide loans from the Public Project Revolving Fund

(PPRF) to 108 statewide qualified entities for public infrastructure projects under the conditions

established by NMFA.

Significant Issues

Section 1, describes the 108 projects and identifies the state and local entities requesting legisla-

tive authority to make loans from PPRF. According to NMFA, the approximate value of all the

projects contained in this section totals approximately $216 million in statewide needs.

Loans from PPRF benefit eligible entities by allowing them to borrow for infrastructure projects

at below market costs, based on terms and conditions established by NMFA. The authorization

provided in the bill does not guarantee that those projects will receive an NMFA loan. Loans

will be made to entities that can identify a sufficient revenue source for repayment of a loan and

are able to meet other financial criteria established by the Authority.

Section 2, voids legislative authorization if a qualified entity does not notify the Authority by the

end of fiscal year 2008 of its desire to continue to pursue a loan from NMFA.

Section 3, contains an emergency clause.

FISCAL IMPLICATIONS

Senate Bill 152 does not appropriate funds. However, loans made in the interim as a result of

passage of this bill would result in reducing the loan capacity of the Public Project Revolving

Fund. PPRF capacity for direct cash loans as of December 2004 was approximately $15 million.

A significant source of capital for infrastructure projects administered by NMFA, approximately

$18 million per year, is derived from an annual distribution of 75% of the state’s Governmental

Gross Receipts Tax (GGRT). In addition to GGRT, NMFA raises capital through the issuance of

tax-exempt pooled bonds and direct loan repayments. To date, PPRF has financed 420 loans

statewide totaling $599 million. Demand for PPRF funding has increased significantly from fis-

cal year to fiscal year. The graph below provided by NMFA depicts the growth of senior lien

lending activity and shows the demand trend for PPRF funding.

Senate Bill 152/aSCONC/aSFC/aHTRC -- Page 3

PPRF Annual Activity

by millions of dollars and numbers of projects

0

20

40

60

80

100

120

140

160

180

FY

96

FY

97

FY

98

FY

99

FY

00

FY

01

FY

02

FY

03

FY

04

FY05

0

10

20

30

40

50

60

70

80

90

100

M illion s Number of projects

DUPLICATION

Senate Bill 152 duplicates House Bill 95 in its entirety.

LMK/lg:yr