Summary:

 Senate Bill 1 (SB 1):  This act proposes to create a robust financial and administrative framework to ensure long-term, sustainable funding and support for behavioral health services, while addressing critical needs in mental health and substance abuse treatment through strategic investment and resource allocation.   

Legislation Overview:

 Senate Bill 1 (SB 1):  Behavioral Health Trust Fund:  The fund is established as a non-reverting fund within the state treasury, meant to accumulate and manage assets through distributions, appropriations, gifts, grants, and donations.  The state investment officer is responsible for managing the investments of the fund according to the prudent investor rule, with regular reporting obligations to various legislative committees.  An annual distribution of 5% of the average year-end market values of the fund over the preceding three years (or since its establishment, if that timeframe is less than three years) is to be made every July 1st to the Behavioral Health Program Fund.

Behavioral Health Program Fund:  This fund also resides within the state treasury and is intended to receive distributions from the Behavioral Health Trust Fund.  It is administered by the health care authority and is designated for appropriations by the legislature to support various aspects of behavioral health services, including treatment, infrastructure, workforce development, and compliance with federal requirements.  Unspent or unencumbered funds at the fiscal year's end revert back to the Behavioral Health Trust Fund, ensuring a cyclical funding mechanism to maintain and enhance the program's sustainability.

Initial Funding and Financial Management:  A significant initial transfer of $1 billion from the general fund to the Behavioral Health Trust Fund is proposed to kickstart the fund.  The fund’s management involves careful investment and regular auditing, with accountability ensured through mandatory reporting to the legislative finance committee and other relevant bodies.

Purpose and Use of Funds:  Funds are specifically earmarked for comprehensive behavioral health services, including mental health and substance abuse treatment programs, development of necessary infrastructure and technology, provision of matching funds for various sources, and implementation of regional behavioral health plans.
 

Amendments:

 Amended February 12, 2025 in SFC

SFCa/SB 1:	This proposed legislation creates a long-term financial framework to fund and support behavioral health services in New Mexico. Key provisions include:
1.	Establishing the Behavioral Health Trust Fund
2.	Creation & Purpose - 
The Behavioral Health Trust Fund (BHTF) is established as a non-reverting fund in the state treasury.
3.	Initial funding includes a $1 billion transfer from the general fund, plus any future appropriations, gifts, grants, and donations.
4.	Investment & Reporting
The State Investment Officer will invest the BHTF under the prudent investor rule and provide quarterly reports to the Legislative Finance Committee (LFC) and the State Investment Council.
5.	An annual report is due by October 1 to the LFC, the Revenue Stabilization and Tax Policy Committee, and other appropriate interim committees.
6.	Annual Distribution to Program Fund
Beginning July 1, 2026, 5% of the average year-end market values of the BHTF (for the preceding three calendar years) is distributed each year to the Behavioral Health Program Fund.
7.	If the BHTF is less than three years old, the distribution is 5% of the average market value for however long the fund has existed.
8.	For fiscal years 2026 and 2027, any unexpended or unencumbered balance after that annual distribution is counted toward state reserves.
A.  Creating the Behavioral Health Program Fund
Creation & Administration
The Behavioral Health Program Fund (BHPF) is also created in the state treasury.
It receives money from BHTF distributions, appropriations, grants, and investment income.
The Health Care Authority administers the BHPF.
Use of Funds:
Subject to legislative appropriation, money in the BHPF may be used to fund:
a.	Mental health & substance misuse treatment, prevention, and intervention.
b.	Infrastructure, technology, and workforce supports essential for service delivery.
c.	Matching funds for federal, local, or private grants related to behavioral health.
d.	Compliance costs with federal requirements.
e.	Implementation of regional behavioral health plans throughout the state.
Reversion:
Any unexpended or unencumbered balance in the BHPF at the end of a fiscal year reverts to the BHTF, ensuring unused funds remain available for future behavioral health needs.
3. Appropriation & Transfer
One-Time Transfer
$1 billion is transferred from the General Fund to the BHTF upon enactment of this legislation.
Overall Impact
This legislation is designed to stabilize and expand the funding for behavioral health services in New Mexico by creating a large endowment-like trust. The annual 5% distribution from the trust’s investments to the Program Fund will provide a recurring revenue stream dedicated to mental health and substance misuse treatment, infrastructure improvements, workforce development, and other critical behavioral health needs statewide.
SHPACa/SB 1 - Here is a breakdown of the amendments.
 1.  On page 1, lines 12 and 13, strike "; MAKING A TRANSFER
 FROM THE GENERAL FUND TO THE BEHAVIORAL HEALTH TRUST FUND".
 2.  On page 2, line 19, strike "year 2026" and insert in lieu
 thereof "years 2026 and 2027".
 3.  On page 3, line 7, strike "abuse" and insert in lieu
 thereof "misuse".
 4.  On page 4, strike Section 3