Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR Campos/Thornton/Gonzales
LAST UPDATED
ORIGINAL DATE 2/07/2025
SHORT TITLE Rural Libraries Endowment Fund
BILL
NUMBER Senate Bill 209
ANALYST Rodriguez
APPROPRIATION*
(dollars in thousands)
FY25 FY26
Recurring or
Nonrecurring
Fund
Affected $29,500.0 Nonrecurring General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
REVENUE*
(dollars in thousands)
Type FY25 FY26 FY27 FY28 FY29
Recurring or
Nonrecurring
Fund
Affected
Distributions $0.0 $0.0 $986.1
At least
$986.1
At least
$986.1
Recurring
Rural
Libraries
Program
Fund
Distributions $0.0 $0.0 $51.9
At least
$51.9
At least
$51.9
Recurring
Cultural
Affairs
Department
Parentheses ( ) indicate revenue decreases.
*Amounts reflect most recent analysis of this legislation.
Relates to Senate Bill 202
Sources of Information
LFC Files
Agency Analysis Received From
Cultural Affairs Department
State Investment Council
SUMMARY
Synopsis of Senate Bill 209
Senate Bill 209 (SB209) appropriates $29.5 million from the general fund to the rural libraries
endowment fund for expenditure in fiscal year 2026 and subsequent fiscal years.
Senate Bill 209 – Page 2
This bill does not contain an effective date and, as a result, would go into effect 90 days after the
Legislature adjourns if enacted, or June 20, 2025.
FISCAL IMPLICATIONS
The appropriation of $29.5 million contained in this bill is a nonrecurring expense to the general
fund. Any unexpended or unencumbered balance remaining at the end of FY26 shall not revert to
the general fund.
According to the State Investment Council (SIC), this bill could result in an additional $986.1
thousand annual distribution starting in FY27 to the rural libraries program fund and an
additional $51.9 thousand annual distribution to the Department of Cultural Affairs (DCA).
SIC writes:
Assuming passage of the bill, the additional $29.5 million appropriation will be deposited
in the [fund] in FY26, which will positively impact the distributions for FY27 and all
subsequent years. The projected positive impact of the new contribution is substantial, as
it would help the fund grow to approximately $93 million in value by 2040, compared to
about half of that size without additional funding. The additional benefits the funds are
projected to deliver from 2027 to 2040 are an estimated additional $24.8 million, split
5/95 to DCA, which receives 5 percent of the distribution for administrative costs, and 95
percent of which will go to benefit [New Mexico] rural libraries. See the chart below.
Senate Bill 209 – Page 3
SIGNIFICANT ISSUES
Rural Libraries Endowment Fund
The rural libraries endowment fund was created in 2019 to support rural libraries throughout the
state by providing funding for operational and capital needs and funding for the delivery of
specialized services to rural libraries. The endowment fund is invested by SIC. Laws 2019,
Chapter 165, outline distributions from the endowment fund. For FY22 and the following five
fiscal years, the distribution is the difference between investment earnings of the previous
calendar year and all fund distributions, up to 5 percent of the year-end market value of the fund
in the previous year. For FY28 and the following fiscal years, the distribution is the average fund
investment income of the previous five calendar years up to 5 percent of the year-end market
value of the fund in the previous calendar year. The statute also outlines that 5 percent of the
distribution covers the administration and delivery costs of DCA. The remaining amount, 95
percent, is for the rural libraries program fund.
The fund received its first appropriation of $1 million in 2019. The fund received an additional
$2.5 million in 2024, $15 million in 2023, $10 million in 2022, and $2 million in 2020.
According to SIC, the fund is valued at $33.1 million as of December 31, 20204.
Program Fund and Grants
The rural libraries program fund consists of distributions from the endowment fund. Money in
the fund is nonreverting. The rural libraries grant program directs the state librarian to annually
disburse grants to developing and established rural libraries. Statute also outlines that any
amount not disbursed shall be made available for the next award of grants. The state librarian
identifies 58 rural libraries in New Mexico. The statute also provides that the state librarian can
use funds for specialized services, such as professional development opportunities, program
support, IT support, and other capacity building services, to rural libraries. The fund also
provides grant funds to communities wishing to establish a library.
Fund Growth
SIC notes the fund has a projected 7 percent annual return based on its revised asset allocation
implemented in April 2024. The agency notes the fund should achieve greater returns over a full
market cycle, though it will also be taking additional risk, which can negatively impact short-
term returns in negative market environments. The agency writes:
The SIC-managed Rural Libraries Endowment Fund is currently invested in a “high
growth” allocation strategy, which is projected over a full market cycle to earn a
compound return of 7 percent annually, with an expected standard deviation (risk) of 14
percent. This compares similarly to the flagship Land Grant Permanent Fund’s allocation
which is projected to earn 7 percent compounded every year with a 13.6 percent standard
deviation. RLEF’s strategy has a higher allocation to private equity and other private-
market assets compared to the LGPF.
Senate Bill 209 – Page 4
SIC shows the following returns for the rural libraries endowment fund.
Fund Value
(in millions)
Performance Percent
(Net of Fees)
1 year 3-years 5-years 7-years 10-years
$33.1 9.61 4.82 4.77 N/ A N/ A
Recent Distributions
The FY25 distribution of $891.1 thousand has been made to 58 libraries, with each library
receiving $15.4 thousand.
The state librarian did not distribute any grants to rural libraries in FY22 and FY23, noting that
the amounts were too small to pay out. The state librarian reported that the first round of grants
was distributed in FY24. The total amount distributed in FY24 was $166.2 thousand, which was
sum of the full amount of the FY22 transfer and half of the FY23 transfer. Each of the total 54
libraries will receive grants of $2,600. The state librarian also set aside approximately $15
thousand for establishing grants—which are for libraries not yet recognized as state-funded
libraries to help them become established and eligible for other state grants.
Anticipated FY26 Distribution
The State Investment Council estimates the endowment fund will distribute $1.5 million to the
program fund in FY26, nearly double the FY25 distribution. If DCA distributes the full 95
percent share of the fund to 58 rural libraries, each library will receive approximately $24
thousand in FY26.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
This bill relates to Senate Bill 202 (SB202). SB202 is a language clean-up bill that clarifies and
creates consistency around investments managed by SIC. As noted by SIC:
SB202 also would change the [rural libraries endowment fund] distribution model from
its current conservative formula, to a more standard “5 percent of 5-year-fund-value”
spending policy in FY26. That change to the 5 percent formula is already scheduled for
FY28 under current law, so SB202 simply accelerates that timeline slightly.
JR/hj/hg