SENATE BILL 166

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

Mimi Stewart

 

 

 

 

 

AN ACT

RELATING TO PUBLIC FUNDS; AUTHORIZING TRANSFERS FROM THE GENERAL FUND TO OTHER FUNDS IF REVENUES OF THE GENERAL FUND EXCEED APPROPRIATIONS AND THE SUM OF THE EXCESS AND THE BALANCE OF THE GENERAL FUND OPERATING RESERVE EXCEEDS A CERTAIN AMOUNT; CONFORMING SECTION 6-4-2.2 NMSA 1978 (BEING LAWS 1987, CHAPTER 264, SECTION 3 AND LAWS 1987, CHAPTER 347, SECTION 3, AS AMENDED).

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. Section 6-4-2.2 NMSA 1978 (being Laws 1987, Chapter 264, Section 3 and Laws 1987, Chapter 347, Section 3, as amended) is amended to read:

     "6-4-2.2. GENERAL FUND TAX STABILIZATION RESERVE.--

          A. The "tax stabilization reserve" is created within the state treasury as a reserve fund of the state.

          B. The tax stabilization reserve consists of money directed or appropriated to it by law and all income from investment of the reserve. The state investment officer, subject to the approval of the state investment council, shall invest money in the reserve:

                (1) in accordance with the prudent investor rule set forth in the Uniform Prudent Investor Act; and

                (2) in consultation with the state treasurer.

          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. 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 appropriate interim committees.

          D. Except as otherwise provided in [Subsection] Subsections E and F of this section [Subsection B of Section 6-4-4 NMSA 1978] and [Section 4 of this 2024 act] Laws 2024, Chapter 61, Section 4, any balance of the tax stabilization reserve may be:

                (1) appropriated only by a two-thirds' majority vote of both houses of the legislature following receipt by the legislature of a declaration of the governor that such an appropriation is necessary for the public peace, health and safety; or

                (2) expended by the governor only:

                     (a) pursuant to an appropriation made by a two-thirds' majority vote of both houses of the legislature specifying the amount of the appropriation and the purpose of the expenditure; and

                     (b) if the governor declares that the expenditure is necessary for the public peace, health and safety.

          E. If, as of the end of a fiscal year, the balance in the general fund operating reserve is less than one percent of aggregate general fund appropriations for that fiscal year, as determined by the department of finance and administration after the close of that fiscal year, then an amount equal to the smaller of either one percent of aggregate general fund appropriations for that fiscal year or the amount necessary to bring the balance of the general fund operating reserve to one percent of aggregate general fund appropriations for that fiscal year shall be transferred from the tax stabilization reserve to the general fund operating reserve. If a transfer pursuant to this subsection is made for a fiscal year, no further transfers pursuant to this subsection shall be made for that fiscal year.

          [E.] F. If general fund revenues, including all transfers to the general fund authorized by law, are projected by the governor to be insufficient either to meet the level of appropriations authorized by law from the general fund for the current fiscal year or to meet the level of appropriations recommended in the budget and appropriations bill submitted in accordance with Section 6-3-21 NMSA 1978 for the next fiscal year, the balance in the tax stabilization reserve may be appropriated by the legislature up to the amount of the projected insufficiency for either or both fiscal years."

     SECTION 2. Section 6-4-4 NMSA 1978 (being Laws 1987, Chapter 347, Section 4, as amended) is amended to read:

     "6-4-4. [TRANSFER] TRANSFERS FROM THE GENERAL FUND [TO THE GOVERNMENT RESULTS AND OPPORTUNITY EXPENDABLE TRUST--TRANSFER FROM THE TAX STABILIZATION RESERVE TO THE GENERAL FUND OPERATING RESERVE].--

          A. Except as provided in Subsection B of this section, if the revenues of the general fund exceed the total of appropriations from the general fund, the excess revenue shall be transferred to the general fund operating reserve. [provided that]

          B. If the sum of the excess revenue plus the balance in the general fund operating reserve prior to the transfer is greater than:

                (1) five percent but less than eight percent of the aggregate recurring appropriations from the general fund for the previous fiscal year, then the following percentages of the excess above five percent but less than eight percent shall be transferred from the general fund to the following funds; provided that the combined balances of the general fund operating reserve and the tax stabilization reserve for that fiscal year exceed twenty-five percent of the aggregate recurring appropriations for that fiscal year from the general fund, as determined by the department of finance and administration:

                     (a) twenty-five percent to the medicaid trust fund;

                     (b) twenty-five percent to the behavioral health trust fund;

                     (c) twenty-five percent to the community benefit fund;

                     (d) fifteen percent to the public education reform fund;

                     (e) seven percent to the rural health care delivery fund; and

                     (f) three percent to the Kiki Saavedra senior dignity fund; and

               (2) eight percent of the aggregate recurring appropriations from the general fund for the previous fiscal year, then [an amount equal to the smaller of either the amount of the excess revenue; or the difference between the sum and eight percent of the aggregate recurring appropriations from the general fund for the previous fiscal year; shall be transferred to the government results and opportunity expendable trust.

          B. If the balance in the general fund operating reserve as of the end of a fiscal year is less than one percent of aggregate general fund appropriations for that fiscal year, as determined by the department of finance and administration, then an amount equal to the smaller of either one percent of aggregate general fund appropriations for that fiscal year or the amount necessary to bring the balance of the general fund operating reserve to one percent of aggregate general fund appropriations for that fiscal year shall be transferred from the tax stabilization reserve to the general fund operating reserve] the transfers pursuant to Paragraph (1) of this subsection shall be made in accordance with the provisions of that paragraph, and the amount of the excess revenue above eight percent of aggregate recurring appropriations from the general fund for the previous fiscal year shall be transferred from the general fund to the government results and opportunity expendable trust."

     SECTION 3. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2026.

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