LEGISLATIVE UPDATE: Legislative Bulletin from the NM Municipal League

The First Session of the 56th Legislature has ended, and it was a busy session for the New Mexico Municipal League, with several priority bills relating to public safety, airport funding, and revenue for roads. Overall, there were a number of positive outcomes for municipalities – including $55 million in airport funding, increased distributions to the local road fund, and an increase in the firefighter survivor benefit.

The next step is bill signing. The governor has until April 7 to sign, veto, or fail to sign (i.e., pocket veto) bills that she did not act on during the session.

Municipal League Priority Legislation

» Funding for statewide airports (originally in Senate Bill 104) was included in House Bill 2, the General Appropriation Act. We were pleased to see $55 million in general fund monies for airports in HB2 –the largest investment in statewide airports in the state’s history.

» We also pushed for an adjustment to the motor vehicle excise tax distribution (originally in Senate Bill 184). The omnibus tax bill, House Bill 547, increases the distribution of excise tax revenues to the transportation project fund (which provides funding for local road projects) from approximately 19 percent to 25 percent, generating an additional $18 million for the fund.

» SB250, increasing the firefighter survivor benefit from $250 thousand to $1 million, passed unanimously through several committees and both chambers. We were gratified to see strong support for aligning the firefighter survivor benefit with that of law enforcement officers.

» We supported $10 million for EMS services (Senate Bill 23) and $2.5 million for public safety radio network subscriber fees (Senate Bill 409). Neither bill made it even though both initiatives represented much-needed support for our public safety agencies. We will continue to advocate for increased funding for emergency medical services and other public safety needs.

Other Relevant Bills

» House Bill 547, the tax omnibus bill, passed with over 25 substantive tax code changes. The final version of the bill decreases the state GRT rate by one-eighth over four years, on top of a planned decrease passed last year. The decrease in state GRT does not impact municipalities, which will still receive the 1.225 local share of GRT.In a positive change for local governments, HB547 adjusts motor vehicle excise tax distributions, directing 25 percent to the transportation project beginning in FY26. The distribution to the state road fund is gradually increased to 75 percent by FY26. (Currently, approximately 60 percent of revenues go to the general fund, 22 percent to the state road fund, and 18 percent to the transportation project fund).

» House Bill 2, the General Appropriation Act, passed with a budget of $9.57 billion for FY24, representing a nearly 14 percent increase over the current fiscal year budget. As mentioned above, HB2 includes $55 million in general fund monies for airport projects statewide, a significant amount of money that we believe will support economic development and health and safety needs in our communities. HB2 also includes $100 million for law enforcement initiatives and $4 million in general fund monies for the firefighter survivor’s fund.

» The capital outlay bill – House Bill 505 – includes over $1.1 billion in general fund revenues for capital projects. Approximately $271 million is directed to local government projects, through the Local Government Division of the Department of Finance and Administration

» The “junior bill” (Senate Bill 192) includes $100 million in additional one-time appropriations. Approximately $21 million is for local projects.

» A substantive law enforcement bill – Senate Judiciary Committee substitute for Senate Bills 19 and 252 – passed. The bill includes provisions relating to use-of-force policies, peer intervention, and development of a database to track outcomes of misconduct investigations, among other changes.

» Following reports prior to session that the Law Enforcement Protection Fund (LEPF) risked insolvency, legislators addressed the issue through Senate Bill 491, which directs 10 percent of health insurance premium tax revenue to the LEPF (currently health insurance premium tax revenues do not go to the LEPF). Statutory changes in SB491 direct an additional $22 million annually to the LEPF, ensuring solvency and continued distributions to law enforcement agencies.

» House Bill 345 passed, targeting firefighter recruitment. The bill creates a recruitment fund for municipal and county firefighters.

» House Bill 232 passed, amending statutes related to the Inspection of Public Records Act, and we believe the changes are much needed and long overdue. The updates will better protect individuals’ personal rights, as well as streamline administration of IPRA for municipal clerks and other employees.

» Senate Bill 368 also passed, providing exceptions to law enforcement body camera requirements. The bill provides that officers are not required to wear body cameras during undercover operations or explosive recovery and disposal operations.

» As in past years, return-to-work bills – notably Senate Bill 124 – failed to pass, facing stiff opposition from organized labor groups.

» House Bill 106, which passed the Legislature, raises the maximum amount of a pension benefit from 90 percent to 100 percent of an employee’s final average salary. The bill covers members of the Public Employees Retirement Association, including municipal members.

» House Bill 139, which eliminates post-adjudication fees for criminal and traffic cases, including in municipal courts, passed. The bill also includes provisions expanding the types of community service that can be applied in lieu of fees and increase the credit for community service and jail time in lieu of payment.

» Senate Bill 251 passed, amending the Metropolitan Redevelopment Code. SB251 allows a municipality or county to dedicate up to 75 percent of local option gross receipts tax, as applied to any increase in economic activity in the metropolitan redevelopment area (MRA).

» Proposals to raise the minimum wage to $16 per hour failed this year, with House Bill 28 making it through just one committee before languishing.

» Senate Bill 11, which proposed a new family and medical leave program, received plenty of debate during the session but was ultimately tabled in the House Commerce and Economic Development Committee.