TRANSFER FROM GENERAL FUND TO OTHER FUNDS

SB0166

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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