Summary:

 House Bill 475 (HB 475) creates the Transportation Trust Fund; makes annual transfers to the State Road Fund for providing state matching funds for federal grants; distributes a portion of gross receipts tax revenue attributable to the sale of electricity to the Transportation Trust Fund; amends distributions of the motor vehicle excise tax; amends certain sections of Laws 2021 through 2024 to require certain unexpended General Fund capital outlay appropriations to revert to the Transportation Trust Fund; and makes an appropriation.  

Legislation Overview:

 House Bill 475 (HB 475) creates the "Transportation Trust Fund" (Trust Fund) as a nonreverting fund in the State Treasury. The fund consists of distributions, appropriations, gifts, grants and donations. Income from investment of the fund is to be credited to the Trust Fund, and money from the Trust Fund is only to be expended as provided in this section.

The State Investment Officer (Officer), subject to the approval of the State Investment Council and in consultation with the State Treasurer, is to invest money in the Trust Fund in accordance with the prudent investor rule set forth in the Uniform Prudent Investor Act. 

The Officer must submit an annual report on the investments made no later than October 1 of each year to the Legislative Finance Committee, the State Investment Council, the Revenue Stabilization and Tax Policy Committee and any other appropriate interim committees. 

On July 1, 2028 and each July 1 thereafter, a transfer must be made from the Trust Fund to the State Road Fund (Road Fund) in an amount equal to five percent of the average of the year-end market values of the fund for the immediately preceding three calendar years. Money transferred may only be expended to provide state matching funds for federal grants for transportation infrastructure projects. 

In addition to the transfer, money in the Trust Fund may be expended in the event that General Fund balances will not meet the level of appropriations authorized for a Fiscal Year. In that event, to avoid an unconstitutional deficit, the legislature may appropriate from the Trust Fund to the General Fund only in the amount necessary to meet General Fund appropriations for that Fiscal Year and only if the legislature has authorized transfers from the Appropriation Contingency Fund, the General Fund Operating Reserve and the Tax Stabilization Reserve that exhaust those fund balances. 

A new section of the Tax Administration Act, Section 7-1-6.73 NMSA 1978, is enacted to state that a distribution must be made to the Trust Fund in an amount equal to specified percentages of the taxable gross receipts attributable to the sale of electricity.

Section 7-14-10 NMSA 1978  is amended to require that receipts from the tax and any associated interest and penalties must be deposited in the "Motor Vehicle Suspense Fund", a newly created fund in the State Treasury. Distribution requirements are provided, with various portions going to the General Fund, the Road Fund, the Transportation Project Fund, and the Transportation Trust Fund.

If, for any single Fiscal Year occurring after fiscal year 2030 and prior to Fiscal Year 2041, gross receipts tax revenues are less than ninety percent of the gross receipts tax revenues for the previous Fiscal Year, various modified distributions are to be made to the above-mentioned funds.

Except as otherwise provided or required, the unexpended balance of an appropriation made in this Act from the General Fund will revert to the General Fund, according to specified instructions and deadlines.

Except for appropriations to the Capital Program Fund, money from appropriations made in this Act from the General Fund may not be used to pay indirect project costs. 
Except as otherwise provided, the balance of an appropriation made from the General Fund will revert in in a specified time frame to the Capital Projects Fund. 
The balance of an appropriation made from the General Fund to the Indian Affairs Department or the Aging and Long-Term Services Department for a project located on lands of an Indian nation, tribe or pueblo will revert in a specified time frame to the Tribal Infrastructure Project Fund. 

“Unexpended balance" is defined as the remainder of an appropriation after reserving for unpaid costs and expenses subject to a binding written agreement with a third party. 
Money that is appropriated from the General Fund pursuant to this Act may not be subject to a binding written agreement with a third party prior to the authorized state agency's approval to enter into that agreement. 

The unexpended balance of an appropriation made in this Act from the General Fund that has not reverted on or before the effective date of this 2025 Act must revert within a specified time frame.

Laws 2022, Chapter 53, Section 2 is amended to require that the unexpended balance of an appropriation made in this Act from the General Fund revert to the Federal Fund according to certain specified time frames and conditions. The unexpended balance of an appropriation made in this Act from the General Fund that has not reverted on or before the effective date of this 2025 Act must revert in in a specified time frame.

Laws 2023, Chapter 199, Section 1 is amended to require that except as otherwise provided or required, the unexpended balance of an appropriation made in this Act from the General Fund must revert to the General Fund according to specified time frames and conditions, and to state that money appropriated according to this Act may not be subject to a binding written agreement with a third party prior to the authorized state agency's approval to enter into that agreement. The unexpended balance of an appropriation made in this Act from the General Fund that has not reverted on or before the effective date of this 2025 Act must revert in a specified time frame.

Laws 2024, Chapter 66, Section 1 is amended to require that except as otherwise provided or required, the unexpended balance of an appropriation made in this Act from the General Fund must revert to the General Fund according to specified timelines and conditions. The agencies named in this Act must certify to the Department of Finance and Administration that the money appropriated in this Act is needed for the purposes specified in the applicable section of the Act. If an agency has not certified the need for the appropriation for a particular project by the end of fiscal year 2026, the authorization for that project is void. Money that is appropriated from the General Fund as directed by this Act is not to be subject to a binding written agreement with a third party prior to the authorized state agency's approval to enter into that agreement. The unexpended balance of an appropriation made in this Act from the General Fund that has not reverted on or before the effective date of this 2025 Act must revert within specified time frames to the Transportation Trust Fund.

Four hundred million dollars ($400,000,000) is appropriated from the General Fund to the Transportation Trust Fund for expenditure in Fiscal Year 2026 and subsequent years to provide initial funding to the Trust Fund. Any unexpended or unencumbered balance remaining at the end of a Fiscal Year is not to revert to the General Fund. 


 

Current Law:

 Current Law
The Transportation Trust Fund and related appropriation are not in place at this time, and associated monies are not included in existing distributions.