SENATE BILL

55th legislature - STATE OF NEW MEXICO - first session, 2021

INTRODUCED BY

Mimi Stewart

AN ACT

RELATING TO RESERVE FUNDS; INCREASING THE AMOUNT OF MONEY IN EXCESS OF APPROPRIATIONS THAT MUST BE IN THE GENERAL FUND BEFORE A PORTION OF THE EXCESS IS TRANSFERRED TO THE TAX STABILIZATION RESERVE; CHANGING THE FUND THAT THE BALANCE OF THE EXCESS EXTRACTION TAXES SUSPENSE FUND IS TRANSFERRED TO EACH YEAR FROM THE TAX STABILIZATION RESERVE TO THE GENERAL FUND OPERATING RESERVE.

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

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

     "6-4-4. TRANSFERS BETWEEN GENERAL FUND RESERVES.--

          A. For the seventy-seventh and subsequent fiscal years, 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 if the sum of the excess revenue plus the balance in the general fund operating reserve prior to the transfer is greater than [eight] fifteen 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] fifteen percent of the aggregate recurring appropriations from the general fund for the previous fiscal year shall be transferred to the tax stabilization reserve.

          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."

     SECTION 2. Section 6-4-27 NMSA 1978 (being Laws 2020, Chapter 3, Section 4) is amended to read:

     "6-4-27. EXCESS EXTRACTION TAXES SUSPENSE FUND--TRANSFER OF EXCESS OIL AND GAS EMERGENCY SCHOOL TAX REVENUE--[TAX STABILIZATION] GENERAL FUND OPERATING RESERVE--EARLY CHILDHOOD EDUCATION AND CARE 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 transfer the balance of the fund attributable to that fiscal year as follows:

                (1) to the [tax stabilization] general fund operating 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] general fund operating reserve; and

                (2) to the early childhood education and care fund, the balance remaining in the excess extraction taxes suspense fund, if any, after the transfer is made pursuant to Paragraph (1) of this subsection.

          C. As used in this section, "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, the tax stabilization reserve and the tobacco settlement permanent fund."

     SECTION 3. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2021.

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