LEGISLATIVE ROUNDUP: And Then There Were None … Tax Increases, That is! It’s a Stunner!

The House promptly acted to reject the Senate amendment, which also put sunset dates on tax credits for various groups, returning the measure to the Senate and asking members to recede from their amendment. The Senate didn’t recede. They appointed Sens. Carrie Hamblen (D-Doña Ana), Majority Leader Peter Wirth (D-Santa Fe) and Joshua Sanchez (R-Socorro and Valencia) to represent the Senate on a conference committee. The House speaker appointed Reps. Derrick Lente (D-Rio Arriba, Sandoval & San Juan), Cristina Parajon (D-Bernalillo) and Mark Duncan (R-San Juan) to serve for the House on the conference committee.

The conference committee will now attempt to reach a compromise. If members do reach agreement, an amended version of the bill, known as a conference report, will be sent back to both chambers for their approval. The chambers may only vote “yes” or “no” to either accept or reject the conference report. Both chambers must accept the report before the bill can be sent to the governor – no agreement, then either back to another conference committee or throw in the towel and the bill is dead.

Stand Firm

The Chamber has stood firm all session in opposition to any new taxes. With $3 billion in new revenue, we have consistently said that no one, no where, no way should have a tax increase. We have argued that if the Legislature wants to spend more, then members need to go back to the budget and reprioritize just like any family or business would have to do. The Chamber’s unwavering opposition, along with the New Mexico Oil and Gas Association, had a big impact. Both organizations stood firm. We have a strong position – tax increases are really unconscionable in this era of plenty. Let’s hope the Senate members stand firm as well.

There are programs funded in the budget bill, House Bill 2, that won’t be implemented because their enabling legislation didn’t pass this session – there’s a solid start in finding some money to cover HB 14’s elimination of personal income tax on those making less than $70k a year as well as the various tax credits. And, of course, lawmakers should take a hard look at whether all items in the tax package really need to be enacted.

What’s in HB2 and the Capital Outlay Bill Is a Surprise To Many

With respect to both the capital outlay and budget bills, our observation is that there is a lack of advance information available to many, even legislators prior to the public release of the bills. These massive, multipage, tree-devouring documents are available right about the time legislators are asked to vote on them. The public is in the same wilderness. Now, don’t get us wrong, we understand that it takes significant time to process all the details and incorporate them into these bills. A lot of well- intentioned effort goes into the preparation of these bills. We believe that one solution, then, is to adhere to the rule that these bills have to be noticed and available for public review at least 24 hours before action can be taken. See, in the last eight days of the session, the normal 24-hour rule is suspended. For most bills, that’s probably okay, but even then there are many bills heavily amended without the legislators or the public having much of an opportunity to examine and analyze the effects. Surely, we can do better.

Capital Outlay Process Is Broken – Reform Is Needed

As Mark Twain said, “The problem with the weather is that everyone complains about it but no one does anything about it.” So it goes with the capital outlay process. We’ve been advocating for reform of the capital outlay process for years. With the passage of House Bill 450, there will be more than 6,000 projects totaling around $7 billion in some form of suspended animation. And, there’s a staff of six or seven people to oversee all these projects – in other words, mission impossible.

So what’s the central problem? Folks back home, like cities, counties and schools, push for things they want and convince legislators to put them in the capital outlay bill regardless of whether it’s really a viable project, whether the local governments can pony up their share of the funding and whether there’s a solid plan in place. Senate Finance Committee Chair George Muñoz (D-Cibola, McKinley & San Juan) is more frustrated than anyone. He said in committee today, “capital outlay is the worst thing we’re doing. It’s absolutely a waste of money. People show up with no real idea about what they’re doing – it’s just free money. … We can have nice things in New Mexico, but we won’t achieve that until we say we’re not going to do it this way any more.”

So what’s the solution? As Muñoz observes, it has to be done gradually. One step taken this year was setting aside $50 million as a “closing fund” to finish several large projects that have been languishing for some time – like a waterline in Curry County and a hospital in Taos. Another step next year would be to place a minimum amount that can be included in capital outlay. Muñoz thinks a minimum of $50,000 should be put in rule. Large projects are the things that elevate the quality of life and make the state an attractive place to live. Muñoz said that if the Legislature has to come back in special session to deal with cuts in federal spending, raking in the unspent capital outlay cash is going to be on top of the list. Just think, $7 billion – that’s two thirds of general fund spending for a year! Quite obviously, a lot more work needs to be done on fixing the process. Let’s see if a better result can be achieved next session.

Through a grant from the Thornburg and Los Alamos Laboratory foundations, the Chamber engaged Education Research and Development, a nationally recognized group of experts, to prepare a report on school leadership, and many of those recommendations are included in HB 157. Unfortunately, changes made in Senate Finance this week push those changes out to the next decade. And just as unfortunate, those changes add another step in the process for HB 157. It must now go back to the House so that chamber can approve the changes made in the Senate.

We’ll let you know what happens next. Next decade is better than never. Still, we think our kids deserve these changes today, not in 2033.

So, what’s a Senate to do? Try another run and keep on truckin’. Today, the Senate passed Senate Bill 510, which was transformed from an omnibus crime bill, sponsored by Senate Minority Leader William Sharer (R-Farmington), into a replica of SB 166. The House’s response? Stuffed into three kill committees: House Health and Human Services, House Consumer and Public Affairs and House Judiciary. Those individuals and families seeking help will just have to wait.

During its journey, the bill received a Senate Judiciary substitute that makes minor modifications to clarify the illegality of a person making a false report.

Adrian Gomez, SVP of policy at the Greater Albuquerque Chamber of Commerce, testified in support of the bill by saying:

“Nothing is more terrifying to a student than to be threatened with violence, especially our youngest and most vulnerable. Swatting is a form of violence and intimidation that can leave lasting emotional scars. For those that commit such crimes, a slap-on-the-wrist misdemeanor is not nearly enough of a consequence for perpetrating violence. SB 18 would bring a meaningful consequence by making swatting a felony. It’s what we should do for our children. As you can see, this is a big problem, and a growing problem. SB 18 is an important tool that can help. We urge your support of SB 18. Please vote ‘yes.’ Thank you.”

There was no opposition to the bill.

Rep. Stefani Lord (R-Bernalillo & Torrance) said swatting is a problem and goes above and beyond because it’s happening every day. “If you go on X, it’s happening to people and politicians. We are vulnerable to this, too. It’s not that they are calling in and saying there’s a DV (domestic violence). They are calling saying someone has a gun. What they want is law enforcement to come in with their firearms drawn and somebody ends up dead. That’s the end game of swatting.”

With less than 20 minutes of discussion, a motion was made for a “do-pass” vote. The committee voted 4-1 to move the bill to the House Judiciary Committee.

The Chamber strongly supports this legislation, Racketeering Act: 13 New and Additional Crimes, as J.D. Bullington explained in his testimony:

“SB 70 is aimed at dealing with heinous crimes committed by organized groups. These criminal enterprises need to be stopped in their tracks. That’s why the Chamber supports SB 70, which would expand the state’s Racketeering Act to include such heinous crimes as sexual exploitation of children, threats to our law enforcement officers and threats to some of our communities’ most vulnerable with human trafficking. The bill would also target the leaders of such enterprises, specifically making it a crime to solicit or coerce another person, including a minor, into being a member of or working with their criminal enterprise, as well as financing or supervising racketeering activity. SB 70 offers those in our legal system a better tool by casting a wider net over criminal gangs.”

Bullington added that “we know that human trafficking is a growing problem, largely because organized crime is involved – preying on women and children. Racketeering statutes are designed to go after just these kinds of organizations, but New Mexico’s statute does not now encompass so many heinous crimes. That’s why we need SB 70 to pass.”

We’ll let you know what happens with SB 70 in the waning days of this session.

The Chamber has supported this bill throughout its journey because it’s a common-sense measure that gives law enforcement and prosecutors an additional tool to go after embezzlers. Prosecutors would be able to aggregate crimes against any one victim, punishing all embezzlements within a one-year period as one crime, rather than treating each as a separate instance, and would aggregate the value of embezzled items to determine sentencing. Consolidating multiple offenses into a single chargeable amount addresses repeat offenses and ensures appropriate sentencing based on cumulative financial harm.

Embezzlement happens in government entities and in small and large businesses alike. Indeed, it’s happened in surprising places. You may recall that a former legislator is facing state and federal charges for allegedly embezzling money (while she was a legislator) over several years meant for the Albuquerque School District and its students.

J.D. Bullington testified in support of the bill for the Chamber:

“This bill is similar to legislation passed in 2023 that allowed aggregation of retail theft charges. And that new law is working. Albuquerque Police Department reports that they have charged over 100 repeat offenders under the aggregation of retail theft provision. And year-to-date, starting in November, Albuquerque was down in shoplifting for the year overall. Whether you steal a physical item or embezzle funds, it’s theft, and unfortunately in New Mexico we’ve seen embezzlement in some pretty high places. The Chamber urges you to support this bill.”

With just a day and a half left, and no amendments to require concurrence, here’s to SB 155 getting off the House floor and to the governor for her signature.

Senate Majority Whip Michael Padilla (D-Bernalillo) is the bill’s sponsor.

It’s estimated that New Mexico is losing 30% or more of prospects because of the lack of building sites. Thirty-six states already have such a program. SB 169 fills in a piece that is absent in our state’s economic development efforts, namely site readiness. Site readiness is something that we can easily do for ourselves. Essentially what needs to be done is site characterization studies that are overseen by a strategic economic development site advisory committee that knows what to look for.

The House approved the measure 59-4 today with little debate, sending it up to the fourth floor, where the governor hangs out. The Chamber has strongly supported this measure throughout its legislative journey.

Padilla said SB 170 is a follow-up companion bill with SB 169, which is site readiness, which essentially is making sure sites are ready and provides an expedited — six months — approval process through the Public Regulation Commission. “If companies and organizations are looking to New Mexico and hanging out there waiting for too long, we will lose those opportunities. This is a great handshake with Senate Bill 169.”

Adrian Gomez, SVP of policy at the Greater Albuquerque Chamber of Commerce, testified in support of the bill by saying:

“SB 170 is another pragmatic bill that allows New Mexico to do the literal groundwork necessary to be truly ready when economic development opportunities arise. Allowing public utilities to recover prudent and reasonable costs for certain economic development projects will encourage investment in future projects today. And oversight from both the Economic Development Department and the Public Regulation Commission as well as a 10-year sunset are designed to ensure projects indeed pay dividends. We respectfully ask for your ‘yes’ vote on SB 170. Thank you.”

Standing in support alongside the Chamber are El Paso Electric, N.M. Idea, Southwestern Public Service, PNM, the New Mexico Chamber of Commerce and Mesa del Sol.

With little discussion and no objection, a motion for a “do pass” was made, and a vote of 15-0 moved the bill to the House floor.

PLANNING MOVES TO HOUSE FLOOR

The Chamber is a strong supporter of this legislation as reflected in president and CEO Terri Cole’s testimony:

“I’d like to make two points that are very important to understanding the value of this bill:

“1. Many young families own homes in the area around the fairgrounds because it’s affordable and a place they can get a starter home. If we revitalize this area, it will make their neighborhoods safer with increased home value. Moreover, revitalization will attract more retail stores back to the area and also construction of more affordable housing.

“2. There are multiple safeguards in the bill against conflict of interest. The board consists of mostly elected officials, and all proceedings of the board are done in the open, including written documents. The Board of Finance and the New Mexico Finance Authority must oversee and review the district’s proposals and approve them. Finally, before any bonds can be issued, the Legislature itself must approve. And, the district self-destructs in four years if progress has not been made.

“The Chamber has been involved in this issue for years, and I can tell you from personal experience this is the most well-conceived and credible of all the attempts made. We urge you to support SB 481.”

Republicans continue to question whether there are enough safeguards built in to avoid conflict of interest. We certainly believe there are since, before any bonds can be issued, the State Board of Finance, the New Mexico Finance Authority and the Legislature itself must approve. All the meetings of the newly formed governing board of the district must adhere to all open meetings and records acts. We’re not sure what more could reasonably be done. Moreover, if progress can’t be made by 2029, then all money reverts to the state general fund. It’s time to take this leap to the future for a better neighborhood and a better State Fair.

POLICY BILL BACK FOR CONCURRENCE

We know there is a direct link to increased suicide rates, anxiety, depression and a number of issues. The bill is not a mandate to school districts. Rather, it requires school districts to adopt a phone-free classroom policy, but the details of what that policy looks like would be left up to the individual districts.

Phones in the classroom undermine the learning environment, contributing to decreased academic performance, particularly in math, and increased classroom distractions – with low-income students disproportionately affected. The bill has one mandate, a conversation in every single school district community to come up with a policy for that school district. Here’s to getting the bill on the governor’s desk.

House Bill 167, Higher Ed Payment for Certain Tests, sailed out of the Senate today on a quick 39-0 vote. The bill makes GED testing for adults free in New Mexico, and we’ll admit it wasn’t a bill we were watching closely. Until a couple days ago, that is. The Senate Finance Committee made some major amendments to the bill, basically building in an entire Science of Reading component.

If you recall, we told you last week that the House Education Committee disappointingly tabled Senate President Pro Tem Mimi Stewart’s Senate Bill 242, Advancing the Science of Reading Act, effectively killing it. But not so fast. That bill is back and baked into the new and improved HB 167. Now that the bill passed the Senate, it goes back for a concurrence vote on the House floor.

Rep. Katherine Cullen (R-Sandoval), that former school board member, spoke eloquently about the importance of the Science of Reading:

“Parents are saying ‘enough is enough.’ You have chambers of commerce saying that they support this. Why? Because our scores are so low. Businesses are not coming here partially because of our education system. And we need to drastically move this needle. And we can’t keep kicking the can down the road. We need to make bold change and to move the needle. If you’re okay saying that we’re 50th in the United States, then just keep doing what you’re doing. Or you make that change.”

It was disappointing the House Education Committee would scuttle a demonstrated successful method to teach our students to read. But now, this incredibly important and game-changing effort has new life and will bypass the committee on its way directly to the House floor.

We’ll be watching this one closely over the next day and a half as the session comes to a close.

Padilla began by saying there were a couple of substitutes that were put together to get to the bill where it is today. The Senate Judiciary Committee substitute for the Senate Rules Committee substitute for Senate Bill 42 makes a variety of changes within the state’s child welfare system, including a few highlights:

• Enhancing the state’s implementation of the Comprehensive Addiction and Recovery Act (CARA).

• Replacing the term “plan of care” with “plan of safe care” throughout sections of the Children’s Code to align with federal statute.

• Making the Department of Health (DOH) the lead agency with more specific

expectations about the roles and responsibilities of care coordination.

• Making DOH responsible for ensuring the completion of federally required reporting

related to plans of safe care, developing an annual report related to the creation and

implementation of plans of safe care for the Legislature, and delivering training. The

bill also provides DOH with rule-making authority.

• Requiring someone at a birthing facility to create a plan of safe care for each

substance-exposed newborn.

• Making DOH responsible for all training for hospitals and providers related to plans

of safe care.

• Allowing for the creation of plans of safe care perinatally and directing all hospitals

to use an evidence-based screening tool to screen and identify a substance-exposed newborn.

J.D. Bullington testified in support of the bill for the Chamber, saying:

“It’s clear from Legislative Finance Committee analysis that we’re not reaching mothers with substance abuse through the current system. The National Institutes of Health reported that overdose deaths among pregnant women aged 35-44 tripled between 2018 and 2021. It’s a problem all the states are grappling with. In New Mexico, the LFC tells us that rates of newborns with substance-withdrawal symptoms in New Mexico have climbed to more than twice the national average. And yet only one in seven local families with substance-exposed newborns accepts referrals to addiction treatment. We need to close the gaps on service delivery, and SB 42 seeks to do just that. It’s a complicated problem that we want to try to solve through treatment rather than penalization. Yet, this is very real child abuse that has to be dealt with. We urge a ‘yes’ vote on SB 42.”

There was no public opposition on the bill.

Majority Floor Leader Rep. Reena Szczepanski (D-Santa Fe) made an amendment to the bill that focuses on evidence-based practices to support the families that are involved in CARA. It also addresses the use of state devices for CYFD business. Szczepanski explained it “addresses records retention or devices used by employees of CYFD. So it’s basically stating that CYFD employees must use only department-issued devices for communication related to their duties. It is ensuring that software and applications are allowed or compliant with all of the relevant data retention and protection laws. By (backing) up all electronic records to be saved for at least seven years, to ensure records retention policies and that those records are backed up on a daily basis, and then related to the CARA program.” The amendment had no opposition.

A motion was made for a “do pass” of Senate Judiciary Committee substitute for the Senate Rules Committee substitute as amended. The committee voted 9-0, and the bill heads to the House floor.

1. Creates a non-reverting fund with a cap of $15 million.

2. Expands the purposes of the program to include recharging of aquifers.

3. List supplementary purposes of the program to include such things as cultural and recreational benefits.

The Chamber supports this legislation which, with little debate, passed the House by a vote of 42-20, sending the bill to the governor’s desk.

PROPERTY-TAX EXEMPTIONS FOR VETERANS

The bill is sponsored by Rep. Art De La Cruz (D-Bernalillo), Minority Whip Rep. Alan Martinez (R-Sandoval) and Sen. Harold Pope (D-Bernalillo). The bill’s journey didn’t have much opposition as it sailed through the House on Feb. 15 with a vote of 62-0 and the Senate on March 12 with a vote of 39-0. The bill has an emergency clause, which means it bacame law the instant it was signed.

The Chamber has supported this bill since its filing and testified in support at each stop. The Chamber wants to make New Mexico more attractive for active-duty personnel and veterans to serve here and stay in our great state. HB 47 is a good investment in New Mexico’s economy and the many veterans who are business owners, consumers and contributors to our state’s success.

“Today marks an important step forward in how we honor and support our veterans in New Mexico,” said Lujan Grisham. “Our veterans deserve meaningful support for their service and sacrifice, and I’m proud to sign legislation that provides tangible benefits to them and their families.”

The bill, sponsored by Rep. Tara Lujan (D-Santa Fe), allows the Public Regulation Commission (PRC) to approve low-income rates for gas and electric customers or other programs that can help low-income customers lower their home energy bills. According to sponsors, low-income consumers spend as much as 20% of their household income on utility bills. President Pro Tempore Sen. Mimi Stewart (D-Bernalillo) presented the bill today and fielded a few tough questions from Republicans opposed to the legislation.

Sen. Larry Scott (R-Chaves, Eddy & Lea): “Only in New Mexico would we develop public policies that increase utility rates on all of our ratepayers, including low-income customers. But the consequence of this piece of legislation will be to increase those rates on the folks that are actually paying their bills as opposed to the folks that are not.”

“It’s working in 20 other states,” said Stewart. “I believe we want to do this in New Mexico, too.”

The Chamber has supported this bill throughout the process as a short-term measure of necessity rather than a permanent way of life. Our long-term goal should be making New Mexico more competitive, attracting new businesses, and creating good, high-paying jobs in the private sector.

Very serious hospital concerns were raised about the initial iteration of this legislation, which the Chamber shared. Legislators engaged directly with the hospital association to address those concerns in the new version, and hospital officials then dropped their opposition.

In short, the bill creates a process that allows the secretary of the Health Care Authority (HCA) to review proposed transactions (e.g., acquisitions, mergers) that materially change the control of a New Mexico health care entity.

The bill now heads to Gov. Michelle Lujan Grisham for her consideration.