New Mexico HB 71: EARLY CHILDHOOD ED & CARE FUND TRANSFERS

Bill Text

HB 71/a
Page 1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
AN ACT
RELATING TO PUBLIC FINANCE; PROVIDING FOR FIFTY PERCENT OF
THE BALANCE OF THE EXCESS EXTRACTION TAXES SUSPENSE FUND THAT
EXCEEDS THE ANNUAL AVERAGE AMOUNT TO BE TRANSFERRED TO THE
BEHAVIORAL HEALTH TRUST FUND FOR THREE YEARS; INCREASING THE
AMOUNT THAT IS ANNUALLY TRANSFERRED TO THE EARLY CHILDHOOD
EDUCATION AND CARE PROGRAM FUND FROM THE EARLY CHILDHOOD
EDUCATION AND CARE FUND; PROVIDING FOR REPORTING OF
EXPENDITURES OF MONEY IN THE EARLY CHILDHOOD EDUCATION AND
CARE PROGRAM FUND; PROVIDING FOR FIFTY PERCENT OF THE MONEY
RECEIVED PURSUANT TO THE FEDERAL MINERAL LEASING ACT THAT
EXCEEDS THE ANNUAL AVERAGE AMOUNT TO BE DISTRIBUTED TO THE
MEDICAID TRUST FUND FOR THREE YEARS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 6-4-27 NMSA 1978 (being Laws 2020,
Chapter 3, Section 4, as amended) is amended to read:
"6-4-27. EXCESS EXTRACTION TAXES SUSPENSE FUND--
TRANSFER OF EXCESS OIL AND GAS EMERGENCY SCHOOL TAX REVENUE--
TAX STABILIZATION RESERVE--EARLY CHILDHOOD EDUCATION AND CARE
FUND--BEHAVIORAL HEALTH TRUST FUND--SEVERANCE TAX PERMANENT
FUND.--
A. The "excess extraction taxes suspense fund" is
created as a nonreverting fund in the state treasury. Money
in the fund shall only be used to make transfers by the

HB 71/a
Page 2
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
department of finance and administration as required by this
section.
B. At the end of each fiscal year, the department
of finance and administration shall calculate and transfer
the balance of the fund attributable to that fiscal year as
follows:
(1) if in the current fiscal year the total
net receipts attributable to the tax imposed pursuant to
Section 7-31-4 NMSA 1978 and distributed pursuant to Section
7-1-6.20 NMSA 1978 exceed the annual average amount, the
department shall distribute the excess amount above the
annual average amount as follows:
(a) to the tax stabilization reserve,
the amount necessary to bring the balance of state reserves
to a level equal to twenty-five percent of the aggregate
recurring appropriations for that fiscal year from the
general fund, as determined by the department; provided that,
if the balance in the excess extraction taxes suspense fund
is not sufficient to meet that level, the entire balance
shall be transferred to the tax stabilization reserve; and
(b) the balance of the excess amount
above the annual average amount, if any, after the transfer
is made pursuant to Subparagraph (a) of this paragraph shall
be transferred as follows: 1) for fiscal years 2026 through
2028, fifty percent to the early childhood education and care

HB 71/a
Page 3
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
fund and fifty percent to the behavioral health trust fund;
provided that if, as of the end of one of those fiscal years,
the balance of the early childhood education and care fund is
less than the balance of that fund as of the end of fiscal
year 2025, the transfer to the behavioral health trust fund
made pursuant to this item shall be decreased by an amount
equal to one-half of the difference between the balance of
the early childhood education and care fund as of the end of
fiscal year 2025 and the balance of that fund as of the end
of that fiscal year; and 2) for fiscal year 2029 and each
fiscal year thereafter, one hundred percent to the early
childhood education and care fund; and
(2) the remaining balance of the fund, if
any, shall be distributed to the severance tax permanent
fund.
C. As used in this section:
(1) "annual average amount" means the total
net receipts attributable to the tax imposed pursuant to
Section 7-31-4 NMSA 1978 and distributed pursuant to Section
7-1-6.20 NMSA 1978 in the immediately preceding five fiscal
years, divided by five; and
(2) "state reserves" means the general fund
balances, as determined by the department of finance and
administration, including all authorized revenues and
transfers to the general fund and balances in the

HB 71/a
Page 4
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
appropriation contingency fund, the general fund operating
reserve, the state-support reserve fund and the tax
stabilization reserve."
SECTION 2. Section 9-29A-1 NMSA 1978 (being Laws 2020,
Chapter 3, Section 1, as amended) is amended to read:
"9-29A-1. EARLY CHILDHOOD EDUCATION AND CARE FUND.--
A. The "early childhood education and care fund"
is created within the state treasury. The fund shall consist
of distributions, appropriations, gifts, grants and
donations. Income from investment of the fund shall be
credited to the fund. Money in the fund shall be expended
only as provided in this section.
B. The state investment officer, subject to the
approval of the state investment council, shall invest money
in the early childhood education and care fund:
(1) in accordance with the prudent investor
rule set forth in the Uniform Pr