New Mexico 2025 Regular Session

New Mexico House Bill HB71 Compare Versions

Version 1 (Old)

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1		-	~~HB 71/a~~
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	28	+	HOUSE BILL 71
	29	+	57
	30	+	TH LEGISLATURE
	31	+	-
	32	+
	33	+	STATE
	34	+
	35	+	OF
	36	+
	37	+	NEW
	38	+
	39	+	MEXICO
	40	+
	41	+	-
	42	+	FIRST SESSION
	43	+	,
	44	+
	45	+	2025
	46	+	INTRODUCED BY
	47	+	Doreen Y. Gallegos
28	48		AN ACT
29		-	RELATING TO PUBLIC FINANCE; PROVIDING FOR FIFTY PERCENT OF
30		-	THE BALANCE OF THE EXCESS EXTRACTION TAXES SUSPENSE FUND THAT
31		-	EXCEEDS THE ANNUAL AVERAGE AMOUNT TO BE TRANSFERRED TO THE
32		-	BEHAVIORAL HEALTH TRUST FUND FOR THREE YEARS; INCREASING THE
33		-	AMOUNT THAT IS ANNUALLY TRANSFERRED TO THE EARLY CHILDHOOD
34		-	EDUCATION AND CARE PROGRAM FUND FROM THE EARLY CHILDHOOD
35		-	EDUCATION AND CARE FUND; PROVIDING FOR REPORTING OF
36		-	EXPENDITURES OF MONEY IN THE EARLY CHILDHOOD EDUCATION AND
37		-	CARE PROGRAM FUND; PROVIDING FOR FIFTY PERCENT OF THE MONEY
38		-	RECEIVED PURSUANT TO THE FEDERAL MINERAL LEASING ACT THAT
39		-	EXCEEDS THE ANNUAL AVERAGE AMOUNT TO BE DISTRIBUTED TO THE
40		-	MEDICAID TRUST FUND FOR THREE YEARS.
	49	+	RELATING TO PUBLIC FINANCE; INCREASING THE AMOUNT THAT IS
	50	+	ANNUALLY TRANSFERRED TO THE EARLY CHILDHOOD EDUCATION AND CARE
	51	+	PROGRAM FUND FROM THE EARLY CHILDHOOD EDUCATION AND CARE FUND.
41	52		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
42		-	SECTION 1. Section 6-4-27 NMSA 1978 (being Laws 2020,
43		-	Chapter 3, Section 4, as amended) is amended to read:
44		-	"6-4-27. EXCESS EXTRACTION TAXES SUSPENSE FUND--
45		-	TRANSFER OF EXCESS OIL AND GAS EMERGENCY SCHOOL TAX REVENUE--
46		-	TAX STABILIZATION RESERVE--EARLY CHILDHOOD EDUCATION AND CARE
47		-	FUND--BEHAVIORAL HEALTH TRUST FUND--SEVERANCE TAX PERMANENT
48		-	FUND.--
49		-	A. The "excess extraction taxes suspense fund" is
50		-	created as a nonreverting fund in the state treasury. Money
51		-	in the fund shall only be used to make transfers by the HB 71/a
52		-	Page 2
	53	+	SECTION 1. Section 9-29A-1 NMSA 1978 (being Laws 2020,
	54	+	Chapter 3, Section 1, as amended) is amended to read:
	55	+	"9-29A-1. EARLY CHILDHOOD EDUCATION AND CARE FUND.--
	56	+	A. The "early childhood education and care fund" is
	57	+	created within the state treasury. The fund shall consist of
	58	+	distributions, appropriations, gifts, grants and donations.
	59	+	Income from investment of the fund shall be credited to the
	60	+	fund. Money in the fund shall be expended only as provided in
	61	+	this section.
	62	+	B. The state investment officer, subject to the
	63	+	.229474.1 underscored material = new
	64	+	[bracketed material] = delete
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78		-	department of finance and administration as required by this
79		-	section.
80		-	B. At the end of each fiscal year, the department
81		-	of finance and administration shall calculate and transfer
82		-	the balance of the fund attributable to that fiscal year as
83		-	follows:
84		-	(1) if in the current fiscal year the total
85		-	net receipts attributable to the tax imposed pursuant to
86		-	Section 7-31-4 NMSA 1978 and distributed pursuant to Section
87		-	7-1-6.20 NMSA 1978 exceed the annual average amount, the
88		-	department shall distribute the excess amount above the
89		-	annual average amount as follows:
90		-	(a) to the tax stabilization reserve,
91		-	the amount necessary to bring the balance of state reserves
92		-	to a level equal to twenty-five percent of the aggregate
93		-	recurring appropriations for that fiscal year from the
94		-	general fund, as determined by the department; provided that,
95		-	if the balance in the excess extraction taxes suspense fund
96		-	is not sufficient to meet that level, the entire balance
97		-	shall be transferred to the tax stabilization reserve; and
98		-	(b) the balance of the excess amount
99		-	above the annual average amount, if any, after the transfer
100		-	is made pursuant to Subparagraph (a) of this paragraph shall
101		-	be transferred as follows: 1) for fiscal years 2026 through
102		-	2028, fifty percent to the early childhood education and care HB 71/a
103		-	Page 3
	90	+	approval of the state investment council, shall invest money in
	91	+	the early childhood education and care fund:
	92	+	(1) in accordance with the prudent investor
	93	+	rule set forth in the Uniform Prudent Investor Act; and
	94	+	(2) in consultation with the state treasurer.
	95	+	C. The state investment officer shall report
	96	+	quarterly to the legislative finance committee and the state
	97	+	investment council on the investments made pursuant to this
	98	+	section. Annually, a report shall be submitted no later than
	99	+	October 1 each year to the legislative finance committee, the
	100	+	revenue stabilization and tax policy committee and any other
	101	+	appropriate interim committees.
	102	+	D. On July 1 of each year, a distribution shall be
	103	+	made from the early childhood education and care fund to the
	104	+	early childhood education and care program fund in an amount
	105	+	equal to the greater of five percent of the average of the
	106	+	year-end market values of the fund for the immediately
	107	+	preceding three calendar years or [two hundred fifty million
	108	+	dollars ($250,000,000) ] five hundred million dollars
	109	+	($500,000,000).
	110	+	E. In addition to the distribution pursuant to
	111	+	Subsection D of this section, money in the early childhood
	112	+	education and care fund may be expended in the event that
	113	+	general fund balances, including all authorized revenues and
	114	+	transfers to the general fund and balances in the general fund
	115	+	.229474.1
	116	+	- 2 - underscored material = new
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129		-	fund and fifty percent to the behavioral health trust fund;
130		-	provided that if, as of the end of one of those fiscal years,
131		-	the balance of the early childhood education and care fund is
132		-	less than the balance of that fund as of the end of fiscal
133		-	year 2025, the transfer to the behavioral health trust fund
134		-	made pursuant to this item shall be decreased by an amount
135		-	equal to one-half of the difference between the balance of
136		-	the early childhood education and care fund as of the end of
137		-	fiscal year 2025 and the balance of that fund as of the end
138		-	of that fiscal year; and 2) for fiscal year 2029 and each
139		-	fiscal year thereafter, one hundred percent to the early
140		-	childhood education and care fund; and
141		-	(2) the remaining balance of the fund, if
142		-	any, shall be distributed to the severance tax permanent
143		-	fund.
144		-	C. As used in this section:
145		-	(1) "annual average amount" means the total
146		-	net receipts attributable to the tax imposed pursuant to
147		-	Section 7-31-4 NMSA 1978 and distributed pursuant to Section
148		-	7-1-6.20 NMSA 1978 in the immediately preceding five fiscal
149		-	years, divided by five; and
150		-	(2) "state reserves" means the general fund
151		-	balances, as determined by the department of finance and
152		-	administration, including all authorized revenues and
153		-	transfers to the general fund and balances in the HB 71/a
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	143	+	operating reserve, the appropriation contingency fund, the
	144	+	tobacco settlement permanent fund, the state-support reserve
	145	+	fund and the tax stabilization reserve, will not meet the level
	146	+	of appropriations authorized from the general fund for a fiscal
	147	+	year. In that event, to avoid an unconstitutional deficit, the
	148	+	legislature may appropriate from the early childhood education
	149	+	and care fund to the general fund only in the amount necessary
	150	+	to meet general fund appropriations for that fiscal year and
	151	+	only if the legislature has authorized transfers from the
180	152		appropriation contingency fund, the general fund operating
181		-	reserve, the state-support reserve fund and the tax
182		-	stabilization reserve."
183		-	SECTION 2. Section 9-29A-1 NMSA 1978 (being Laws 2020,
184		-	Chapter 3, Section 1, as amended) is amended to read:
185		-	"9-29A-1. EARLY CHILDHOOD EDUCATION AND CARE FUND.--
186		-	A. The "early childhood education and care fund"
187		-	is created within the state treasury. The fund shall consist
188		-	of distributions, appropriations, gifts, grants and
189		-	donations. Income from investment of the fund shall be
190		-	credited to the fund. Money in the fund shall be expended
191		-	only as provided in this section.
192		-	B. The state investment officer, subject to the
193		-	approval of the state investment council, shall invest money
194		-	in the early childhood education and care fund:
195		-	(1) in accordance with the prudent investor
196		-	rule set forth in the Uniform Prudent Investor Act; and
197		-	(2) in consultation with the state
198		-	treasurer.
199		-	C. The state investment officer shall report
200		-	quarterly to the legislative finance committee and the state
201		-	investment council on the investments made pursuant to this
202		-	section. Annually, a report shall be submitted no later than
203		-	October 1 each year to the legislative finance committee, the
204		-	revenue stabilization and tax policy committee and any other HB 71/a
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231		-	appropriate interim committees.
232		-	D. On July 1 of each year, a distribution shall be
233		-	made from the early childhood education and care fund to the
234		-	early childhood education and care program fund in an amount
235		-	equal to the greater of five percent of the average of the
236		-	year-end market values of the fund for the immediately
237		-	preceding three calendar years or five hundred million
238		-	dollars ($500,000,000).
239		-	E. In addition to the distribution pursuant to
240		-	Subsection D of this section, money in the early childhood
241		-	education and care fund may be expended in the event that
242		-	general fund balances, including all authorized revenues and
243		-	transfers to the general fund and balances in the general
244		-	fund operating reserve, the appropriation contingency fund,
245		-	the tobacco settlement permanent fund, the state-support
246		-	reserve fund and the tax stabilization reserve, will not meet
247		-	the level of appropriations authorized from the general fund
248		-	for a fiscal year. In that event, to avoid an
249		-	unconstitutional deficit, the legislature may appropriate
250		-	from the early childhood education and care fund to the
251		-	general fund only in the amount necessary to meet general
252		-	fund appropriations for that fiscal year and only if the
253		-	legislature has authorized transfers from the appropriation
254		-	contingency fund, the general fund operating reserve, the tax
255		-	stabilization reserve and the tobacco settlement permanent HB 71/a
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282		-	fund that exhaust those fund balances."
283		-	SECTION 3. Section 9-29A-2 NMSA 1978 (being Laws 2020,
284		-	Chapter 3, Section 2, as amended) is amended to read:
285		-	"9-29A-2. EARLY CHILDHOOD EDUCATION AND CARE PROGRAM
286		-	FUND.--
287		-	A. The "early childhood education and care program
288		-	fund" is created in the state treasury. The fund consists of
289		-	distributions, appropriations, gifts, grants, donations and
290		-	income from investment of the fund. The early childhood
291		-	education and care department shall administer the fund.
292		-	Money in the fund is subject to appropriation by the
293		-	legislature for early childhood education and care services
294		-	and programs. Expenditures from the fund shall be by warrant
295		-	of the secretary of finance and administration pursuant to
296		-	vouchers signed by the secretary of early childhood education
297		-	and care or the secretary's authorized representative. Any
298		-	unexpended or unencumbered balance in the fund at the end of
299		-	a fiscal year shall revert to the early childhood education
300		-	and care fund.
301		-	B. By November 1 of each year beginning in 2025,
302		-	the state auditor shall report to the legislative finance
303		-	committee on each expenditure of money in the fund, including
304		-	the date, recipient and purposes for which the money was
305		-	expended."
306		-	SECTION 4. Section 9-29A-3 NMSA 1978 (being Laws 2020, HB 71/a
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333		-	Chapter 3, Section 3, as amended) is amended to read:
334		-	"9-29A-3. DISTRIBUTION--EARLY CHILDHOOD EDUCATION AND
335		-	CARE FUND--MEDICAID TRUST FUND--SEVERANCE TAX PERMANENT
336		-	FUND--PAYMENTS PURSUANT TO FEDERAL MINERAL LEASING ACT.--
337		-	A. If, by June 30 of each fiscal year, the net
338		-	receipts for that fiscal year of the money received by the
339		-	state pursuant to the federal Mineral Leasing Act exceed the
340		-	annual average amount, the excess amount above the annual
341		-	average amount shall be distributed as follows and attributed
342		-	to that fiscal year:
343		-	(1) for fiscal years 2026 through 2028:
344		-	(a) fifty percent to the early
345		-	childhood education and care fund and fifty percent to the
346		-	medicaid trust fund; provided that
347		-	(b) if, as of the end of one of those
348		-	fiscal years, the balance of the early childhood education
349		-	and care fund is less than the balance of that fund as of the
350		-	end of fiscal year 2025, the distribution to the medicaid
351		-	trust fund made pursuant to Subparagraph (a) of this
352		-	paragraph shall be decreased by an amount equal to one-half
353		-	of the difference between the balance of the early childhood
354		-	education and care fund as of the end of fiscal year 2025 and
355		-	the balance of that fund as of the end of that fiscal year;
356		-	and
357		-	(2) for fiscal year 2029 and each fiscal HB 71/a
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384		-	year thereafter, one hundred percent to the early childhood
385		-	education and care fund.
386		-	B. If, by June 30, 2025, and by June 30 of each
387		-	fiscal year thereafter, the remaining amount of the net
388		-	receipts for that fiscal year of the money received by the
389		-	state pursuant to the federal Mineral Leasing Act after the
390		-	distribution pursuant to Subsection A of this section exceeds
391		-	the threshold amount, the excess shall be distributed to the
392		-	severance tax permanent fund.
393		-	C. The department of finance and administration
394		-	shall make the calculations to determine if excess amounts
395		-	shall be distributed pursuant to this section. If there is
396		-	an excess amount, the distribution shall be made as soon as
397		-	practicable. If there is not an excess amount, no
398		-	distribution shall be made.
399		-	D. As used in this section:
400		-	(1) "annual average amount" means the total
401		-	net receipts attributable to money received by the state
402		-	pursuant to the federal Mineral Leasing Act in the
403		-	immediately preceding five fiscal years, divided by five; and
404		-	(2) "threshold amount" means the net
405		-	receipts of the money received by the state pursuant to the
406		-	federal Mineral Leasing Act distributed in fiscal year 2024
407		-	pursuant to Subsection B of Section 22-8-34 NMSA 1978."
408		-	SECTION 5. CONTINGENT EFFECTIVE DATE.--The provisions HB 71/a
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435		-	of Section 4 of this act shall become effective upon Senate
436		-	Bill 88 or similar legislation creating a "medicaid trust
437		-	fund" of the first session of the fifty-seventh legislature
438		-	becoming law; provided that if Senate Bill 88 or similar
439		-	legislation does not take effect by July 1, 2025, the
440		-	provisions of Section 3 of this act shall not take effect.
441		-	SECTION 6. EFFECTIVE DATE.--The effective date of the
442		-	provisions of Sections 1 and 2 of this act is July 1, 2025.
	153	+	reserve, the tax stabilization reserve and the tobacco
	154	+	settlement permanent fund that exhaust those fund balances."
	155	+	SECTION 2. EFFECTIVE DATE.--The effective date of the
	156	+	provisions of this act is July 1, 2025.
	157	+	- 3 -
	158	+	.229474.1