SB 116 TOBACCO FUND IS NOT A RESERVE FUND

Sen Martin E Hickey

Actions: [1] SCC/SHPAC/SFC-SCC [4]germane-SHPAC [6] DP-SFC- DP [7] PASSED/S (38-0) [10] HAFC-HAFC [14] DP - PASSED/H (65-0) SGND BY GOV (Feb. 29) Ch. 25.

Scheduled: Not Scheduled

 Senate Bill 116 (SB 116):  This legislative act is related to state reserves in New Mexico. The act focuses on the Tobacco Settlement Permanent Fund and outlines various provisions related to its creation, investment, distribution, and permissible expenditures. The act also specifies amendments to Section 6-4-9 of the New Mexico Statutes Annotated (NMSA) from Laws 1999, Chapter 207, Section 1, as amended. 

 Senate Bill 116 (SB 116):  The act relates to state reserves and specifically addresses the status of the Tobacco Settlement Permanent Fund.
•	The purpose of this act is to clarify the Tobacco Settlement Permanent Fund is not considered a reserve fund of the state. 
•	The act establishes the "tobacco settlement permanent fund" in the state treasury and explicitly states that it is not a reserve fund of the state.
•	The fund is to consist of money distributed to the state as part of the master settlement agreement with tobacco product manufacturers.

The state investment officer is tasked with investing the money in the fund according to constitutional limitations.
•	Income generated from the fund's investments is to be credited back to the fund.
•	The act outlines an annual distribution from the Tobacco Settlement Permanent Fund to the Tobacco Settlement Program Fund, with the distribution amount being a percentage of the average year-end market values of the fund for the preceding five calendar years.

Money in the fund is generally not to be expended for any purpose, except as provided in the act.
•	The act outlines specific circumstances under which money in the Tobacco Settlement.
•	Permanent Fund may be expended. 
•	Funds may be used if general fund balances are insufficient to meet authorized appropriations from the general fund, and only to the extent necessary.

The act amends Section 6-4-9 NMSA 1978, striking outdated provisions from Laws 1999, Chapter 207, Section 1, as amended.  The effective date of the provisions is specified as July 1, 2024.