HOUSE BILL 7
57th legislature - STATE OF NEW MEXICO - first session, 2025
INTRODUCED BY
Linda Serrato and Javier Martínez and Patricia Roybal Caballero
AN ACT
RELATING TO PUBLIC BENEFITS; ENACTING THE CHILDREN'S FUTURE ACT WITH THE INTENT TO PROVIDE, WITHOUT A GUARANTEE, A SHARE OF A TRUST FUND FOR EVERY ELIGIBLE PERSON BORN IN NEW MEXICO AFTER JANUARY 1, 2025 TO USE FOR PARTICULAR PURPOSES; CREATING THE CHILDREN'S FUTURE FUND; PROVIDING THAT BENEFITS SHALL NOT BE GUARANTEED AND A PROPERTY INTEREST SHALL NOT BE CREATED BY THE CHILDREN'S FUTURE ACT; CREATING THE CHILDREN'S FUTURE TASK FORCE; EXEMPTING MONEY SPENT FOR BENEFICIARIES PURSUANT TO THE CHILDREN'S FUTURE ACT FROM TAXATION; MAKING AN APPROPRIATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 5 of this act may be cited as the "Children's Future Act".
SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the
Children's Future Act:
A. "beneficiary" means a person born in New Mexico on or after January 1, 2025 and whose primary residence since birth is continuously in New Mexico; and
B. "department" means the department of finance and administration.
SECTION 3. [NEW MATERIAL] CHILDREN'S FUTURE FUND.--
A. The "children's future fund" is created as a nonreverting fund in the state treasury. The purpose of the fund is to assist beneficiaries who graduate from a high school in New Mexico in pursuing education, housing, entrepreneurship, retirement and investment opportunities. The fund consists of distributions, transfers, appropriations, gifts, grants, donations and income from investment of the fund. Money in the fund shall be expended only as provided for in the Children's Future Act.
B. In accordance with the prudent investor rule set forth in the Uniform Prudent Investor Act and in consultation with the secretary of finance and administration or the secretary's designee, money in the children's future fund shall be invested as follows:
(1) two-thirds of a transfer, distribution, appropriation, gift, grant or donation to the children's future fund shall be invested by the state investment officer for eighteen years, and then that two-thirds and the associated income from its investment shall be invested by the state treasurer; and
(2) one-third of a transfer, distribution, appropriation, gift, grant or donation shall be invested by the state investment officer.
C. Money in the children's future fund is appropriated to the department for the purposes specified in the Children's Future Act. The department shall administer the fund, and expenditures from the fund shall be by warrant of the secretary of finance and administration pursuant to vouchers signed by the secretary or the secretary's authorized representative.
D. The department may expend no more than three percent of the balance of the children's future fund at the end of a fiscal year for the costs incurred to administer the Children's Future Act.
SECTION 4. [NEW MATERIAL] NO GUARANTEE OF BENEFITS OR ENFORCEABLE INTEREST.--The provisions of the Children's Future Act do not guarantee any benefits and shall not be construed to create an interest in property that:
A. does not otherwise exist; or
B. is enforceable under state law.
SECTION 5. [NEW MATERIAL] FIDUCIARY DUTY.--A person who receives, collects, disburses, expends or invests money from the children's future fund or for a beneficiary pursuant to the Children's Future Act shall be responsible for such money in a fiduciary relationship to beneficiaries.
SECTION 6. A new section of the Income Tax Act is enacted to read:
"[NEW MATERIAL] EXEMPTION--CHILDREN'S FUTURE ACT.--
A. Money transferred to or spent on behalf of a beneficiary pursuant to the Children's Future Act is exempt from state income taxation.
B. As used in this section, "beneficiary" means a person born in New Mexico on or after January 1, 2025 and whose primary residence is in and remains in New Mexico."
SECTION 7. TEMPORARY PROVISION--CHILDREN'S FUTURE TASK FORCE--CREATION--MEMBERSHIP--DUTIES.--
A. The "children's future task force" is created to study and provide recommendations on the optimal design and administration of the Children's Future Act. The task force shall function from the date of its appointment until December 31, 2025. Staff and administrative support for the task force shall be provided by the state investment council. The task force consists of:
(1) one representative from the state investment council to serve as chair;
(2) one representative from the state treasurer's office to serve as vice chair;
(3) one representative from the department of finance and administration;
(4) one public member appointed by the governor; and
(5) four public members, one appointed by each of: the president pro tempore of the senate, the minority floor leader of the senate, the speaker of the house of representatives and the minority floor leader of the house of representatives.
B. At least two appointed members shall have at a minimum five years of professional investment or financial experience, and at least two appointed members shall be representatives of community-based organizations focused on family financial and economic well-being.
C. Appointments to the children's future task force shall be made by July 1, 2025. The task force shall meet not less than once per month at the call of the chair or at the request of two-fifths of its membership to carry out its duties. A majority of the members constitutes a quorum for the transaction of business, and the support of a majority of the quorum is required for adoption of any action.
D. Appointed members of the children's future task force are entitled to receive per diem and mileage as provided in the Per Diem and Mileage Act and shall receive no other compensation, perquisite or allowance.
E. The children's future task force shall research and produce a report with advice and recommendations on the implementation of the Children's Future Act, including:
(1) optimal design and administration of the program to implement the provisions of the Children's Future Act;
(2) a financial plan for financing and implementing the Children's Future Act within five years of its effective date, including data on the efficacy of baby bonds;
(3) eligibility requirements for beneficiaries to use money from the children's future fund;
(4) determination of eligibility, including possible certification processes across multiple state agencies;
(5) the application process and time periods during which eligible beneficiaries may apply to use money from the children's future fund;
(6) mechanisms for transferring and expending money on behalf of beneficiaries;
(7) creation and administration of investment and retirement accounts;
(8) conditions for and limitations on the use of money in the children's future fund for an investment account;
(9) third parties with whom to contract to assist in the administration of the provisions of the Children's Future Act and the responsibilities of those third parties;
(10) measures for ensuring fairness and equity for designated beneficiaries born in different years, considering varying levels of income from investment of the children's future fund;
(11) decisions of investment risk and asset allocation of the children's future fund; and
(12) other matters as determined by the task force.
F. The children's future task force shall, by December 31, report its findings, recommendations and any proposed legislation to the governor and the legislature.
G. As used in this section, "beneficiary" means a person born in New Mexico on or after January 1, 2025 and whose primary residence is in and remains in New Mexico.
SECTION 8. APPROPRIATION.--Five million dollars ($5,000,000) is appropriated from the general fund to the children's future fund for expenditure in fiscal year 2026 and subsequent fiscal years for the purposes of the children's future fund. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not revert to the general fund.
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