LEGISLATIVE ROUNDUP: Sweeping Zero-Emissions Bill Gets Tables in Senate Finance Committee

SWEEPING ZERO-EMISSIONS BILL
GETS TABLED IN SENATE FINANCE COMMITTEE

• By 2030, a 45% reduction
• By 2040, a 75% reduction
• By 2050, a 100% reduction.

The scale and scope of the bill would affect all buildings, structures, modes of transportation, home heating fuels, virtually every nook and cranny of our economy. We were very concerned with the unintended consequences to our jobs base and overall economy with such an aggressive mandate. In particular, we believe the oil and gas industry would be negatively affected and the message to businesses wanting to come here and businesses trying to grow here will be negative – just the opposite of what all of us want and need. The Chamber has consistently opposed SB 4 along with a host of businesses and citizens that are very concerned about the impacts.

In prepared testimony, Terri Cole, Chamber president and CEO, offered the following:

“I’m here today to testify in opposition to SB4. The scale and scope of the bill would affect all buildings and structures. In just five short years, emissions have to be cut by 45%. We are very concerned with the unintended consequences to our jobs base and overall economy with such an aggressive mandate. In particular, we believe the oil and gas industry will be negatively affected and the message to businesses wanting to come here and businesses trying to grow here will be negative- just the opposite of what all of us want and need.

“This bill needs a realistic plan for implementation which is difficult to achieve when the definitions lack clarity. We have many questions. How will all the new rules that will be issued be enforced? How many more staffers in the Environment Department and elsewhere have to be hired? The bill will affect virtually every sector of our economy: electric generation, transportation, home heating fuels, buildings, all forms of waste, manufacturing and extraction of raw materials, agricultural and forest products and, of course, oil and gas. We believe this transition is too aggressive and lacks a necessary balanced strategy. Please vote against SB 4. Thank you.”

Bill Lee stood in opposition on behalf of the Gallup-McKinley County Chamber of Commerce. Lee described SB 4 as a clear government overreach with impacts across all sectors of the economy. He forecast increased prices and job losses as the bitter fruit of SB 4 passage. In summary, he called the measure “an unattainable fantasy.”

Other opponents included a host of small ranchers and farmers, many from the pueblos and Navajo Nation, citing the lack of electric infrastructure, unaffordability and impracticality of using electric vehicles for heavy transportation and farm equipment. Many people in remote rural areas are heating with propane, wood and coal and cannot afford to convert to electricity even if there is electric service available. Many business organizations also contributed to the opposition including the Santa Fe Chamber, the New Mexico Chamber, independent petroleum producers, the New Mexico Cattle Growers Association and Excel Energy Co.

Sen. Pat Woods (R-Curry, Harding, Quay & Union), a farmer, made this point: A diesel-powered semi truck costs $185,000 and can go 1,200 miles. An electric semi costs $1 million, can go only 200 miles and carries one-third of the load. He noted how transportation costs and, therefore, food prices would soar. Other members of the committee echoed these kind of concerns as well as questioning if the Environmental Improvement Board would make reasonable rules. Several committee members pointed out that if the goals aren’t achieved voluntarily then government mandates would be forthcoming.

New Mexico has made, and is making, significant strides in reducing greenhouse gas emissions, in no small part by voluntary actions of businesses across the state. Locking rigid rules, poorly defined, into our statutes is another matter. Goals and rules have to be well-defined and achievable. They also have to balance all the needs of our citizens, not just the environmental side of the equation.

The following is the text of a letter the Chamber joined many businesses in signing. The New Mexico Oil and Gas Association prepared and distributed it to members of the Legislature in opposition to SB 4:

SENATE PASSES SCIENCE OF READING ACT;
NOW IT’S HEADED TO THE HOUSE

This afternoon the Senate passed Senate Bill 242, Advancing the Science of Reading Act, by a vote of 32-6. President Pro Tempore Mimi Stewart (D-Bernalillo) sponsored the bill. She was an elementary school teacher for 30 years and says, and we agree, that successful implementation of this approach can get New Mexico’s student success on the right track.

Senator Pat Boone (R-Chaves, Curry, DeBaca, Lea and Roosevelt) offered a floor amendment to allow local school boards to choose between this approach, called structured reading, or the old system called balanced reading. The issue is over local control versus a state mandate. Moreover, school districts have invested a lot of money in the balanced reading methodology. Opponents of the amendment point to the poor reading results in New Mexico and that the latest science supports structured reading, which needs to be mandated if students are going to learn to read. The amendment was defeated by a vote of 14-26.

“You’ve all heard about the Mississippi miracle,” said Stewart. “The Mississippi miracle on the (National Assessment of Educational Progress) scores, they always fought with us for last. Well, we are now thoroughly last and Mississippi is in the middle of the pack. And how did they do that? In 2014 they passed a law like this in front of you today.”

Stewart has emphasized that her bill puts in statute what is already a directive to the state’s colleges of education. And she said the Mississippi Miracle has demonstrated that structured literacy is the answer and that the method works with all students, be they dyslexic, English-language learners, children from poverty – and that it supports the requirements from the landmark Yazzie-Martinez education ruling.

There is no doubt that SB 242 is a win for our teachers and for our students. The bill now begins its journey on the House side. Keep reading here, ’cause you know we’ll keep you in the know.

AND THEN, A MONEY MIRACLE HAPPENED

Move to Protect Early Childhood Trust Fund Advances

And then a miracle happened: Oil and gas revenues grew so rapidly that by year end, the fund is estimated to be worth $9.6 billion! Within the next decades, if the economy cooperates and anti-oil-and-gas legislation doesn’t drive the industry out of our state, the fund could pay for all of early childhood care and education services – not a nickel would come out of the general fund. Senate Joint Resolution 6, a proposed constitutional amendment, would secure this fund, keeping it safe from political influence and imprudent raids on the fund. The chart below, taken from the fiscal impact report, shows the projected distribution if both SJR 6 and enabling legislation, Senate Bill 167 (both sponsored by Padilla), were to become law.

“The Early Childhood Trust fund has been a booming success, and we need to keep it that way, free from political influence and secure for future generations.

“Early education and care is important for cultivating the future workforce, and it also ensures that working parents of today can participate in the economy. New Mexico’s maternal labor force participation rate is 10 percent higher than the national average, due to the incredible investments in early education. Research suggests returns of 13% on investment in early childhood education, through reduced social costs, higher tax revenue and a more productive workforce.

“SJR 6 provides a stable and predictable funding source for early childhood programs and services. Please vote ‘yes’ on SJR 6.”

Others in support include the Santa Fe Chamber of Commerce and the Los Alamos National Laboratory Foundation. SJR 6 will next be considered by the Senate Finance Committee. If the proposed constitutional amendment (CA) is passed by the House (the governor has no role in CAs), it will be placed before the voters, likely in November of 2026.

$10.8 BILLION BUDGET TOSSED TO SENATE

The total general fund spending proposed is $10.8 billion in fiscal 2026, a 5.8% increase over FY 25 spending. The measure leaves a 31.2% reserve, or a little north of $3 billion. The total budget proposal is about $100 million less than the governor’s proposed budget. Here are some highlights:

• An overall 4% pay increase for all state employees, including public education and higher education.
•  Minimum teacher salaries raised from $50,000 to $55,000 per year.
•  A significant increase for the Economic Development Department’s budget by 6.5% or $1.7 million.
• In addition, $50 million appropriated for regional recreation centers; $50 million to establish a research, development and deployment fund; $24 million for site readiness; $16 million for tourism and international marketing/ $15 million for entrepreneurship incubators; $10 million for recruitment in emerging high tech fields; multiple investments in quantum science; and $7 million for the Local Economic Development Act (LEDA).
•  $15 billion to the Health Care Authority, including increases for Medicaid providers.
• Other one-time appropriations support transitional housing ($110 million) and building housing capacity.
• $50 million for remediating contaminated sites and $40 million for the strategic water plan (the governor proposed $200 million).
• Funding for the Early Childhood Care and Education Department increased by $170 million or 21.6%.
• Total public school funding of $4.6 billion, nearly half of the general fund.
•  Another $500 million to education improvement including $40 million for career technical education and $3 million each for STEAM and STEM initiatives.
• $3 million to the Second Judicial District (Bernalillo County) for establishment of an organized crime commission.
• $1.6 million to State Police step increases to prevent salary compaction and $500,000 for recruitment and grant support.

Alternative Budget Proposed, Rejected

State revenues are expected to exceed recurring expenses by about $3.4 billion. This amount is called “new money.” In general, the “new money” is used for no more than a 6% increase to recurring spending, one-time appropriations or contributions to the various trust funds. A 6% increase in recurring spending is considered to be sustainable into the future.

This extraordinary amount of new money that has occurred for the last few years is courtesy of the oil and gas industry. Rep. Cathrynn Brown (R-Eddy and Lea) thinks some of that new money should go back to taxpayers in what she calls “energy dividends.” Consequently, she proposed a floor substitute for HB 2 that would give each person in New Mexico $600 – for a family of four that would be $2,400. Brown’s viewpoint is that the minerals of the state belong to the people, and the people should get a share of the largess. Alaska has a sharing program like this.

In total, the dividends would cost about $1.2 billion. To accommodate this expenditure, Brown proposed many reductions in other areas, including $1.5 billion in non-recurring expenditures. In addition to the dividends, the proposal also would have added $250 million for road construction, maintenance and repair. There were several smaller increases for Career Technical Education, foster-child stipends, a $1 million appropriation to fund a waste, fraud and abuse initiative along with a few other proposals. The committee substitute was tabled on a vote of 42-24.

We, too, would like to see a significant tax reduction for New Mexico families. Given the high prices of just about everything, folks could use some more cash in their pockets. The Legislature is spending enough on new programs and projects. Taxpayers now deserve to be at the front of the line.

SMART REVISION HELPS GOV’S STRATEGIC WATER SUPPLY INITIATIVE ADVANCE

The purpose of the bill is to accelerate the use of brackish water (salty water) found in deep aquifers. The town of Cuba, for example, is facing dire water shortages and is preparing to install a desalination (de-sal) plant. The bill is aimed at helping fund these kinds of projects and to advance scientific work at New Mexico Tech and New Mexico State University. Tech is working on characterizing aquifers throughout the state – geological mapping to understand possible effects of tapping brackish aquifers. NMSU is working on how to improve treatment technology.

A wide range of environmental interests are worried about effects on freshwater aquifers, subsidence and potentially harmful pollutants in the treated water. Former State Engineer John D’Antonio (he served under three governors) pointed out the hand-wringing is unnecessary. The State Engineer has authority and is involved in any of these kinds of projects and looks at all these issues before granting a permit.

El Paso has been desalinating brackish water since 2007, as have many towns throughout Texas and the world, for that matter. The Kay Bailey Hutchinson plant produces 27.5 million gallons a day of potable water, and there are plans to expand the plant to 42 million gallons per day. That would be enough to serve nearly 300,000 residences. The plant is described as cost-effective because a mineral processing plant is situated next door that buys the byproducts, contributing revenue to the cost of the de-sal treatment plant.

The bottom line is that there are existing cost-effective desalination options available right now. Through expanded research and development, costs can be reduced further – like we’ve seen with wind energy, for example. In fact, using treated brackish water could be a great use for renewable energy manufacturing. Forty-million dollars has been set aside in the budget bill to get this initiative started. It’s a wise investment to improve our state’s drought resilience and to ensure we can remain competitive in attracting and expanding businesses – it’s a win on several fronts.

A HIGHER TAX ON LIQUOR IS ON THE MOVE

In 2023, the New Mexico Department of Health reported 1,896 alcohol-related deaths. Some are associated with chronic diseases such as liver cirrhosis, alcohol dependence as well as alcohol-related injuries such as motor vehicle crashes, poisonings, falls, homicide and suicide. According to the University of New Mexico and New Mexico Department of Transportation, one in four traffic deaths last year involved alcohol.

Here’s what the bill will do: HB 417 would impose a 6% surtax on all alcoholic beverages sold. The bill does not change the current liquor excise tax, however, all the revenue will be used for prevention and treatment programs. Half of the current revenues now go to the general fund. The newly created Alcohol and Substance Use Harms Alleviation Fund will get most liquor excise tax revenue and the new liquor excise surtax.

The newly created surtax would be paid by consumers at the register when purchasing any alcoholic beverages, including drinks at a bar, restaurant, supermarket or liquor store.

Terri Cole, president and CEO of the Greater Albuquerque Chamber of Commerce, testified in opposition to the bill.

“We won’t dispute that our state has a drinking problem … but simply ratcheting up a tax isn’t the answer to combating alcohol abuse. It needlessly punishes very responsible adults, and it would harm local economies, especially the hospitality industry.

“Because while it’s less clear that this tax proceeds will support evidence-based programming to address alcohol-related harms, this bill will all but ensure that many New Mexico’s distinctive local brewers, wineries, and distilleries dry up completely. The bill would raise alcohol excise tax by as much as 650% over the current level and index future alcohol tax increases to inflation.

“And make no mistake: these attempts to make alcohol a cost-prohibitive luxury won’t deter anyone. Casual shoppers will turn to online retailers, and the truly determined will cross borders to build their own personal stores.

“Last but not least, given the historic revenues our state is in the midst of collecting, we really shouldn’t even be considering tax increases. If alcohol harms are truly a priority, and if we believe in the programs this proposed tax would fund, we should find the means to support them, right here and right now, without a bill that would hurt business. We strongly encourage the committee to vote down this extreme tax.”

Joining the Chamber in opposition were the Rio Grande Foundation, New Mexico Business Coalition, Santa Fe Chamber of Commerce, New Mexico Petroleum Marketers, Gallup Chamber of Commerce, Premier Distributing, city of Farmington, Anheuser-Busch, Bosque Brewing Company, New Mexico Brewers Guild, New Mexico Hospitality Association, New Mexico Restaurant Association and New Mexico Retail Association.

Cadena offered a fix many times during the hearing, saying she would be amenable to lowering the tax while not allowing any carve outs for certain businesses.

Before wrapping up the committee, Chair Rep. Derrick J. Lente (D-Rio Arriba, Sandoval & San Juan) made a point to thank Rep. Cadena for her tireless work on the initiative because it’s been a long time coming and commended her compassionate focus on equity in tax policy.

“We recognize that in New Mexico, we have a problem here. We recognize that in tribal communities, that we come from a history of alcoholism, that my family is a part of that, and I am so deeply, deeply frustrated and disappointed that we can’t even have the Indian Affairs Department to show face (at the hearing) for the people they are supposedly supporting.”

After hours of discussion and numerous amendment introductions, including a successful amendment to exempt local wine growers and those with small-brewers’ or craft brewers’ licenses, HB 417 passed by a vote of 6-4.

IMPORTANT BIOSCIENCE INVESTMENT BILL
MOVES ON FROM ITS 1ST COMMITTEE

SB119 increases investment capital available for New Mexico-based bioscience and biotech firms by adding the Bioscience Authority to the current group of existing funds and investors assessing and making investments in N.M. companies. This industry is fast-growing and has enormous economic impact. In the United States, total industry output is more than $3.2 trillion. More than 2 million Americans work in the industry, spread over 150,000 businesses. It’s estimated that the sector indirectly supports nearly 8 million jobs.

Chamber President and CEO Terri Cole says,

“We want to ensure that New Mexico gains a larger share of this very lucrative industry with good, high-paying jobs. The bioscience industry is responsible for major medical advancements and technology, everything from modern lab equipment to new, highly effective medications and cures for a range of diseases.”

While the state has other investment and venture capital funds, none are dedicated solely to attracting and growing bioscience investments. This sector is highly competitive and requires dedicated attention. That’s why we need SB 119. It deposits $25 million in the Bioscience Authority fund and puts appropriate guardrails in place. It requires accountability and transparency of investments. We need to get into this game in a much bigger way, and SB 119 is a good start.

Judiciary Chair Joseph Cervantes (D-Doña Ana and Otero) said he opposes the bill because of the failed promises and projects he’s seen over the years. He gave the example of the Spaceport and a film studio that received millions in taxpayer dollars to open in Las Cruces. “New Mexico is too often gullible on promises of huge returns,” he said.

We believe strongly in the strength of this industry and the economic impact it can have on our state. Let’s hope the bill makes it to the fourth floor! The bill moves to its next committee on a do pass without recommendation with a 7-1 vote.

BILL TO PROTECT BABIES FROM PRENATAL DRUG EXPOSURE ON TO NEXT COMMITTEE

The bill amends the legal definition of child abuse to include prenatal drug abuse, proven through a positive drug test of a baby less than 72-hours old. In an amendment by Dow, the bill was narrowed to deal only with babies born with drugs in their system. Dow wants to ensure that both mother and child receive a plan of care before leaving the hospital which will increase the health and well being of the child.

Enrique C. Knell offered the Chamber’s perspective:

“New Mexico needs to do a better job of protecting our children, and that should start as early as the day they are born. It’s clear that what we’re doing now isn’t working, and we shouldn’t tolerate it. These measures, along with others to improve our behavioral health system, recruit more doctors, fight crime and improve education will all make New Mexico a better place to be a child.”

We’ll follow this bill- all the way- we hope, to the fourth floor!

MEDICAL RECRUITMENT BILL GOES TO HAFC

Rep. Tara Lujan (D-Santa Fe) sponsored the bill and said her goal is to support the recruitment and retention of health care providers in rural or underserved areas, including federally qualified health centers. Her bill supports this goal by appropriating $5 million to the N.M. Health Service Corps. In turn, that funding will support tuition help for medical students in exchange for a promise to serve rural New Mexico for at least two years.

Enrique C. Knell relayed the Chamber’s support during the hearing this morning:

“New Mexico’s shortage of healthcare workers threatens our economic future in a big way. Not to mention what it does to the health of New Mexicans, particularly those who are low-income and live in rural New Mexico. HB 393 makes a relatively modest investment in helping train doctors, in exchange for the promise that they will work in our state for at least two years.”

The New Mexico Health Service Corps (NMHSC) was established to recruit and retain health care professionals in rural areas. It includes a stipend program, which provides financial support to medical and dental students in exchange for service in underserved communities, and a community practice site support program, which offers grants to health care facilities.

MEDICAL LICENSURE COMPACT PASSES 1ST VOTE

The bill would enter New Mexico in the Interstate Medical Licensure Compact for the purpose of facilitating interstate practice by physicians and improving public access to physician services. The Interstate Medical Licensure Compact Commission would serve as the national administrative body, and the bill authorizes the governor to appoint two members to the commission.

Chair Sen. Linda M. López (D-Bernalillo) made an amendment to the bill that promises to make things safer for New Mexico. If a physician has their license revoked in another state, then the physician wouldn’t be able to practice here. The amendment also provides that a license or certification should be immediately reinstated if the suspension or revocation is solely on the basis that a health care practitioner performed or provided reproductive health services or gender affirming care.

Adrian Gomez, Greater Albuquerque Chamber of Commerce SVP of Communications and Public Policy, testified in support of the bill:

“It’s no secret New Mexico has a critical shortage of doctors, and this is one way to get more providers caring for New Mexicans.

“As the Medical Board points out, ‘States that participate in the compact see a significant increase in physician licensure in their state, which we anticipate would occur in New Mexico.’

“The Interstate Medical Licensure Compact will make it simpler for physicians to enter into practice in New Mexico, to provide telehealth services to New Mexico patients, or to practice part-time in New Mexico — each would alleviate the shortage of all types of physicians within the state. The Interstate Medical Licensure Compact currently covers more than 37 states — and several more states are in the process of joining.”

There was no opposition to the bill. Joining the Chamber in support were Think New Mexico, the New Mexico Hospital Association, New Mexico Medical Board and Michael Casaus, who spoke of the doctor’s struggle in treating his son with cancer and having to travel to Texas to be seen by a physician.

Sen. Martin Hickey (D-Bernalillo) said this is a step in the right direction in helping the New Mexico medical personnel get some relief because they are overwhelmed. He said when a doctor retires, it used to be that another doctor would fill the position, but it’s not happening anymore.

Sen. Jay C. Block (R-Bernalillo & Sandoval) questioned if doctors would actually move to New Mexico or stay in their primary practicing state despite entering the Medical Licensure Compact because of New Mexico’s medical malpractice laws. Hickey said his Senate Bill 176 will further address the medical malpractice limits, and it’s already gained some bipartisan support. We’ll be watching for that one.

SB 46 passed with amendment by a 7-3 vote and is headed to the Senate Judiciary.

AUDIOLOGY/SPEECH PATHOLOGY COMPACT GETS A ‘DO PASS,’ HEADS TO SENATE JUDICIARY

The bill would enter New Mexico into the Audiology and Speech-Language Pathology Interstate Compact for the purpose of allowing for the use of telehealth technology to facilitate increased access to speech-language pathology services.

New Mexico faces shortages of virtually every type of health care practitioner. Interstate

Compacts may be partial solutions to this serious problem, easing movement of practitioners into the state or allowing them to practice part-time and/or via telehealth in the compact state of their choosing.

As of 2024, 34 states had adopted the Audiology and Speech-Language Pathology

Interstate Compact, according to the Audiology and Speech-Language Compact Commission.

Adrian Gomez, Albuquerque Greater Chamber of Commerce SVP of Communications and Public Policy, testified in support of the bill, saying:

“Making it easier for licensed providers in other states to treat New Mexicans – be it in person or in a telehealth setting – is a real way to begin to get more New Mexicans the care they need, and address the lack of providers here while at the same time encouraging them to practice in, perhaps even move to, our state.

“The state gives up no oversight, preserving ‘the regulatory authority … to protect public health and safety through the current system of state licensure.’ ”

Chair Sen. Linda M. López (D-Bernalillo) again made an amendment to the bill that should protect New Mexicans: If a physician has their license revoked in another state, then they wouldn’t be able to practice here.

Sen. Shannon D. Pinto (D-McKinley & San Juan) expressed concern of finding audiologists or speech therapists that will work with students within her district.

“I find it hard to bring someone from another state, have them come from across the state lines into one of my schools where the demographic of my students, the Native American population, is very high. They don’t really understand the cultural aspects of the students they are serving,” Pinto said.

The committee voted “do-pass” as amended with a vote of 6-3. The bill now heads to Senate Judiciary.

AROUND THE ROUNDHOUSE

Chamber’s Legislative Work Is Making Headlines

HB 8, AKA the Crime Package, Heads to the Governor!

NEXT STOP FOR SB1? GOV’S OFFICE

There’s only one place for that bill to head now, and that’s to the governor’s desk to be signed into law.

Senate Majority Leader Peter Wirth (D-Santa Fe) and Senate Minority Leader Bill Sharer (R-San Juan) teamed up on Senate Bill 3 to create a new, locally based infrastructure complete with guardrails, measurements and accountability. This three-bill package has been a heavy lift for Sens. Wirth, Sharer and George Muñoz (D- Cibola, McKinley & San Juan). It’s an impressive effort, and New Mexicans will benefit greatly from their collaboration and leadership.

Another Smart Health Care Compact Moves Ahead

Here’s How Committees Are Supposed To Be Run

And speaking of those who deserve compliments, Rep. Micaela Lara Cadena (D-Doña Ana) handled herself so professionally in presenting HB 417, Liquor Tax Changes and Programs. It’s a complex and controversial bill but she stayed cool and gracious. She, too, is a good role model.

Tortillas anyone?

SIGNING OFF FROM SANTA FE