HOUSE BILL 176
57th legislature - STATE OF NEW MEXICO - second session, 2026
INTRODUCED BY
Alan T. Martinez and Rebecca Dow and Jonathan A. Henry
AN ACT
RELATING TO HOUSING; CREATING THE ZERO INTEREST DOWN PAYMENT LOAN FUND FOR FIRST-TIME HOME BUYERS; CHANGING CERTAIN DISTRIBUTIONS MADE TO THE EARLY CHILDHOOD EDUCATION AND CARE FUND, THE BEHAVIORAL HEALTH TRUST FUND AND THE MEDICAID TRUST FUND TO BE MADE TO THE ZERO INTEREST DOWN PAYMENT LOAN FUND; MAKING AN APPROPRIATION.
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] ZERO INTEREST DOWN PAYMENT LOAN 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 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) to the zero interest down payment loan 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 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 appropriation contingency fund, the general fund operating reserve, the state-support reserve fund and the tax stabilization reserve."
SECTION 2. Section 9-29A-3 NMSA 1978 (being Laws 2020, Chapter 3, Section 3, as amended) is amended to read:
"9-29A-3. DISTRIBUTION--[EARLY CHILDHOOD EDUCATION AND CARE FUND--MEDICAID TRUST FUND] ZERO INTEREST DOWN PAYMENT LOAN FUND--SEVERANCE TAX PERMANENT FUND--PAYMENTS PURSUANT TO FEDERAL MINERAL LEASING ACT.--
A. If, by June 30 of each fiscal year, the net receipts for that fiscal year of the money received by the state pursuant to the federal Mineral Leasing Act exceed the annual average amount, the excess amount above the annual average amount shall be distributed [as follows and attributed to that fiscal year:
(1) for fiscal years 2026 through 2028:
(a) fifty percent to the early childhood education and care fund and fifty percent to the medicaid trust fund; provided that
(b) 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 distribution to the medicaid trust fund made pursuant to Subparagraph (a) of this paragraph 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] to the zero interest down payment loan fund and attributed to that fiscal year.
B. If, [by June 30, 2025, and] by June 30 of each fiscal year, [thereafter] the remaining amount of the net receipts for that fiscal year of the money received by the state pursuant to the federal Mineral Leasing Act after the distribution pursuant to Subsection A of this section exceeds the threshold amount, the excess shall be distributed to the severance tax permanent fund.
C. The department of finance and administration shall make the calculations to determine if excess amounts shall be distributed pursuant to this section. If there is an excess amount, the distribution shall be made as soon as practicable. If there is not an excess amount, no distribution shall be made.
D. As used in this section:
(1) "annual average amount" means the total net receipts attributable to money received by the state pursuant to the federal Mineral Leasing Act in the immediately preceding five fiscal years, divided by five; and
(2) "threshold amount" means the net receipts of the money received by the state pursuant to the federal Mineral Leasing Act distributed in fiscal year 2024 pursuant to Subsection B of Section 22-8-34 NMSA 1978."
SECTION 3. A new section of the Mortgage Finance Authority Act is enacted to read:
"[NEW MATERIAL] ZERO INTEREST DOWN PAYMENT LOAN FUND FOR FIRST-TIME HOME BUYERS--REQUIREMENTS.--
A. The "zero interest down payment loan fund" is created as a nonreverting fund in the state treasury. The fund consists of distributions, appropriations, gifts, grants, donations and income from investment of the fund. The authority shall administer the fund, and money in the fund is appropriated to the department of finance and administration to contract with the authority to provide loans as provided in this section. Expenditures from the fund shall be by warrant of the secretary of finance and administration pursuant to vouchers signed by the secretary of finance and administration or the secretary's authorized representative.
B. Subject to availability of money in the fund, money in the fund shall be used to provide zero interest loans to eligible home buyers for up to twenty percent of the purchase price of residential housing in New Mexico that is the first home of the eligible home buyer; provided that the loan provided by the authority shall be a lien on the property secured by a thirty-year mortgage. If the property is sold in less than thirty years, the balance of the loan shall be immediately repaid. The authority may foreclose on the loan if the home buyer defaults on the loan.
C. Applications for a zero interest loan shall be submitted to the authority on forms and in a manner prescribed by the authority.
D. The authority may promulgate rules to carry out the provisions of this section.
E. As used in this section, "eligible home buyer" means a person whose household income is less than four hundred percent of the federal poverty level."
SECTION 4. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2026.
- 7 -