SB 88
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AN ACT
RELATING TO PUBLIC FUNDS; CREATING THE MEDICAID TRUST FUND
AND THE STATE-SUPPORTED MEDICAID FUND; REQUIRING CERTAIN
BALANCES OF REVERTING FUNDS AND ACCOUNTS TO BE TRANSFERRED
FROM THE GENERAL FUND TO THE MEDICAID TRUST FUND.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. MEDICAID TRUST FUND.--
A. The "medicaid trust fund" is created as a
nonreverting fund in the state treasury. The trust fund
consists of distributions, appropriations, gifts, grants and
donations. Income from investment of the trust fund shall be
credited to the trust fund. Money in the trust fund shall be
expended only as provided in this section.
B. The state investment officer shall invest money
in the trust fund in accordance with the prudent investor
rule as set forth in Chapter 6, Article 8 NMSA 1978 and in
consultation with the health care authority.
C. The state investment officer shall report
quarterly to the legislative finance committee and the state
investment council on the investments made pursuant to this
section. An annual report shall be submitted no later than
October 1 of each year to the legislative finance committee,
the revenue stabilization and tax policy committee and any
other appropriate interim committees. SB 88
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D. On July 1, 2029 and each July 1 thereafter, a
distribution shall be made from the trust fund to the
state-supported medicaid fund in an amount equal to five
percent of the average of the year-end market values of the
trust fund for the immediately preceding three calendar
years; provided that a distribution shall not be made until
the balance of the trust fund at the end of a fiscal year is
at least five hundred million dollars ($500,000,000).
E. Money in the trust fund may be appropriated for
any purpose if, in a fiscal year, federal matching funds for
the state medicaid program:
(1) decrease by at least seven and one-half
percent from the previous fiscal year; or
(2) are less than a one-to-one match with
money appropriated by the legislature for the program.
F. In fiscal years 2026 through 2029, money in the
trust fund may be appropriated to support the state medicaid
program if a reduction in federal medicaid funding received
by the state will cause a reduction in coverage or benefits
below the levels provided as of the effective date of this
2025 act.
G. Money in the trust fund may be expended in the
event that general fund balances, including all authorized
revenues and transfers to the general fund and balances in
the general fund operating reserve, the appropriation SB 88
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contingency fund, the tax stabilization reserve and the early
childhood education and care fund, will not meet the level of
appropriations authorized from the general fund for a fiscal
year. In that event, to avoid an unconstitutional deficit,
the legislature may appropriate from the trust fund to the
general fund only in the amount necessary to meet general
fund appropriations for that fiscal year and only if the
legislature has authorized transfers from the appropriation
contingency fund, the general fund operating reserve, the tax
stabilization reserve and the early childhood education and
care fund that exhaust those fund balances.
SECTION 2. STATE-SUPPORTED MEDICAID FUND.--The
"state-supported medicaid fund" is created in the state
treasury. The fund consists of distributions,
appropriations, gifts, grants, donations and income from
investment of the fund. The health care authority shall
administer the fund. Money in the fund is subject to
appropriation by the legislature to support the state
medicaid program and to match federal funds for the state
medicaid program. Expenditures from the fund shall be by
warrant of the secretary of finance and administration
pursuant to vouchers signed by the secretary of health care
authority or the secretary's authorized representative. Any
unexpended or unencumbered balance remaining at the end of a
fiscal year shall revert to the medicaid trust fund. SB 88
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SECTION 3. Section 6-5-10 NMSA 1978 (being Laws 1994,
Chapter 11, Section 1, as amended) is amended to read:
"6-5-10. STATE AGENCY REVERSIONS--DIRECTOR POWERS--
COMPLIANCE WITH FEDERAL RULES--TRANSFER OF REVERSIONS IN
GENERAL FUND TO THE MEDICAID TRUST FUND.--
A. Except as provided in Subsection B of this
section, all unreserved undesignated fund balances in
reverting funds and accounts as reflected in the central
financial reporting and accounting system as of June 30 shall
revert by September 30 to the general fund. The division may
adjust the reversion within forty-five days of release of the
audit report for that fiscal year.
B. By October 1 of each year, the balance of the
reversions in excess of one hundred ten million dollars
($110,000,000) for the previous fiscal year shall be
transferred to the medicaid trust fund until the balance of
the medicaid trust fund reaches two billion dollars
($2,000,000,000) as of the end of a fiscal year.
C. The director of the division may modify a
reversion required pursuant to Subsection A of this section
or a transfer made pursuant to Subsection B of this section
if the reversion made pursuant to Subsection A of this
section would violate federal law or rules pertaining to
supplanting of state funds with federal funds or other
applicable federal provisions." SB 88
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SECTION 4. EFFECTIVE DATE.--The effective date of the
provisions of this act is July 1, 2025.