HB 71 — EARLY CHILDHOOD ED & CARE FUND TRANSFERS

HOUSEAN BILLACT 71RELATING 57THTO LEGISLATUREPUBLIC -FINANCE; STATE OF NEW MEXICO - FIRST SESSION, 2025 INTRODUCED BY Doreen Y.

GallegosPROVIDING andFOR D.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;

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hPROVIDING ANFOR FIFTY PERCENT OF THE MONEY RECEIVED PURSUANT TO THE FEDERAL MINERAL LEASING ACT gTHAT oEXCEEDS RELATINGTHE ANNUAL AVERAGE AMOUNT TO PUBLICBE FINANCE;DISTRIBUTED TO THE MEDICAID TRUST FUND FOR THREE YEARS.

SFCº PROVIDING FOR FIFTY PERCENT OF t hr g e i k THE BALANCE OF THE EXCESS EXTRACTION TAXES SUSPENSE FUND THAT h r i s EXCEEDS THE ANNUAL AVERAGE AMOUNT TO BE TRANSFERRED TO THE h , t, BEHAVIORAL HEALTH TRUST FUND FOR THREE YEARS;»SFC INCREASING e u g e b l e e h THE AMOUNT THAT IS ANNUALLY TRANSFERRED TO THE EARLY CHILDHOOD n d d i = = o h EDUCATION AND CARE PROGRAM FUND FROM THE EARLY CHILDHOOD l ] b ,d i a º e EDUCATION AND CARE FUND SFCº ;

PROVIDING FOR REPORTING OF r i = r t e w d m a n o EXPENDITURES OF MONEY IN THE EARLY CHILDHOOD EDUCATION AND CARE d m :

b e d s º o t n = .229474.1AIC March 18, 2025 (8:24pm) s k m e e a n e d r e l u [ A d 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»SFC .

SFCº SECTION 1.

EXCESS EXTRACTION TAXES SUSPENSE FUND--TRANSFERFUND-- TRANSFER OF EXCESS OIL AND GAS EMERGENCY SCHOOL TAX REVENUE--TAXREVENUE-- TAX STABILIZATION RESERVE--EARLY CHILDHOOD EDUCATION AND CARE FUNDFUND--BEHAVIORAL --BEHAVIORAL HEALTH TRUST FUND--SEVERANCE TAX PERMANENT FUND.-- A.

Money in the fund shall only be used to make transfers by the HB 71/a Page 1 department of finance and administration as required by this section.

At the end of each fiscal year, the department h u of finance and administration shall calculate and transfer the » r t h balance of the fund attributable to that fiscal year as g e l i h r follows:

i s h , (1) if in the current fiscal year the total e h t u g net receipts attributable to the tax imposed pursuant to e b l e e , gh n d d i Section 7-31-4 NMSA 1978 and distributed pursuant to Section = = o h l ] b ,d 7-1-6.20 NMSA 1978 exceed the annual average amount, the i a º r e r = department shall distribute the excess amount above the annual taverage eamount was dfollows: m a n o d m :

b r e t º o t n = .229474.1AIC March 18, 2025 (8:24pm) s k m e - 2 - e a n e d r e l u [ A d average amount as follows:

and (b) [to the early childhood education and care fund] 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 2 fund and fifty percent to the behavioral health trust fund;

provided that if, as of the end of one of those fiscal years, the h u balance of the early childhood education and care fund is less » r t h than the balance of that fund as of the end of fiscal year g e l i h r 2025, the transfer to the behavioral health trust fund made i s h , pursuant to this item shall be decreased by an amount equal to e h t u g one-half of the difference between the balance of the early e b l e e , gh n d d i childhood education and care fund as of the end of fiscal year = = o h l ] b ,d 2025 and the balance of that fund as of the end of that fiscal i a º r e r = year;

and 2) for fiscal year 2029 and each fiscal year tthereafter, eone whundred dpercent mto athe nearly ochildhood deducation mand :care fund;

b r e t º o t n = .229474.1AIC March 18, 2025 (8:24pm) s k m e - 3 - e a n e d r e l u [ A d thereafter, one hundred percent to the early childhood education and care fund;

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 3 appropriation contingency fund, the general fund operating reserve, the state-support reserve fund and the tax stabilization reserve."»SFCreserve." h u SECTION SFCº1.»SFC2. SFCº2.»SFC Section 9-29A-1 NMSA 1978 » r t h (being Laws 2020, Chapter 3, Section 1, as amended) is amended g e l i h r to read:

iSection s9-29A-1 hNMSA ,1978 "9-29A-1.(being Laws 2020, Chapter 3, Section 1, as amended) is amended to read:

EARLY"9-29A-1. CHILDHOOD EDUCATION AND CARE FUND.-- e h t u g A.

TheEARLY "earlyCHILDHOOD childhoodEDUCATION educationAND andCARE careFUND.-- fund"A. is e b l e e , gh n d d i created within the state treasury.

The fund"early shallchildhood consisteducation ofand =care =fund" ois hcreated lwithin ]the bstate ,dtreasury. distributions, appropriations, gifts, grants and donations.

iThe a º r e r = Income from investment of the fund shall beconsist creditedof todistributions, theappropriations, tgifts, egrants wand ddonations. m a n o d m :

bIncome rfrom einvestment tof ºthe ofund tshall nbe =credited .229474.1AICto Marchthe 18, 2025 (8:24pm) s k m e - 4 - e a n e d r e l u [ A d fund.

Annually, a report shall be submitted no later than October 1 each year to the legislative finance committee, the revenue stabilization and tax policy committee and any other HB 71/a Page 4 appropriate interim committees.

On July 1 of each year, a distribution shall be h made from the early childhood education and care fund to the u » r early childhood education and care program fund in an amount t h g e l i equal to the greater of five percent of the average of the h r i s year-end market values of the fund for the immediately h , e h preceding three calendar years or [twofive hundred fifty million t u g e b l e e , gh dollars ($250,000,000)]($500,000,000). SFCºHfl1ºfive hundred million dollars n d d i = = o h ($500,000,000)»Hfl1 Hfl1ºfour hundred million dollars l ] b ,d i a º r ($400,000,000)»Hfl1»SFC SFCºfive hundred million dollars e r = t e w d m a n o ($500,000,000)»SFC .

dE. m :

b r e t º o t n = .229474.1AIC March 18, 2025 (8:24pm) s k m e - 5 - e a n e d r e l u [ A d E.

In that event, to avoid an unconstitutional deficit, the legislature may appropriate from the early childhood education and care 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 tobacco h settlement permanent HB 71/a Page 5 fund that exhaust those fund balances." g o t hr SFCº SECTION 2.3.

EFFECTIVESection DATE.--The9-29A-2 effectiveNMSA date1978 of(being gLaws e2020, iChapter k3, theSection provisions2, ofas thisamended) act is Julyamended 1,to 2025.»SFCread: h r i s SFCºSECTION 3.

Section"9-29A-2. 9-29A-2 NMSA 1978 (being Laws h , t, e u g 2020, Chapter 3, Section 2, as amended) is amended to read:

eEARLY bCHILDHOOD lEDUCATION eAND eCARE hPROGRAM "9-29A-2.FUND.-- A.

EARLYThe CHILDHOOD"early EDUCATIONchildhood ANDeducation CAREand PROGRAMcare nprogram dfund" dis icreated =in =the ostate htreasury. FUND.-- l ] b ,d i a º e r i = r A.

The "earlyfund childhoodconsists educationof anddistributions, careappropriations, programgifts, tgrants, edonations wand dincome mfrom ainvestment nof o fund" is created in the statefund. treasury.

The fund consists of d m :

b e d s º o t n = .229474.1AIC March 18, 2025 (8:24pm) s k m e - 6 - e a n e d r e l u [ A d distributions, appropriations, gifts, grants, donations and income from investment of the fund.

By November 1 of each year beginning in 2025, the state auditor shall report to the legislative finance committee on each expenditure of money in the fund, including the date, recipient and purposes for which the money was expended." h SECTION 4.