CS/HB 196 GOV'T ACCOUNTABILITY TRUST & FUND

Rep Nathan Small

Actions: [2] HAFC-HAFC [10] DNP-CS/DP [12] PASSED/H (39-28) [7] SFC-SFC [9] DP [10] PASSED/S (37-0) SGND BY GOV (Feb. 29) Ch. 18.

Scheduled: Not Scheduled

 House Bill 196 (HB 196) creates the Government Accountability Expendable Trust (GAET) and the Government Accountability Program Fund (GAPF); provides for distributions from the GAET to the GAPF to fund pilot projects that will be evaluated by the Legislative Finance Committee in consultation with the state budget division of the Department of Finance and Administration (DFA) and the state agency administering the pilot project; changes a provision of law that currently transfers certain excess revenue to the tax stabilization reserve to instead transfer the excess revenue to the GAET. 

 House Bill 196 (HB 196) creates the Government Accountability Expendable Trust (GAET) and the Government Accountability Program Fund (GAPF); provides for distributions from the GAET to the GAPF to fund pilot projects that will be evaluated by the Legislative Finance Committee (LFC) in consultation with the state budget division of the Department of Finance and Administration (DFA) and the state agency administering the pilot project; changes a provision of law that currently transfers certain excess revenue to the tax stabilization reserve to instead transfer the excess revenue to the GAET.

A new section of the Accountability in Government Act (AGA) is enacted to stipulate that an agency that proposes to conduct a pilot project must, by September 1 of the year prior to the legislative session in which a request for an appropriation from the GAPF for the pilot project is expected to be made, provide the following information to the LFC: 

•	a description of project premise, including the purpose of the pilot project, a working hypothesis or a theory of change and a description of how the pilot project will help to achieve specific agency goals or objectives; 

•	a justification of need describing the extent of the problem to be addressed and the locations and population the pilot project will serve; 

•	a description of the pilot project, including a list of specific activities to achieve expected outcomes and cost per unit for the proposal and an estimate of the cost to evaluate the pilot project; 

•	a current categorization of the pilot project as being evidence-based, promising or research-based or in need of additional research; 

•	an implementation or action plan for the pilot project that shall include a timeline for implementation of activities, milestones, and a target date for full implementation; 

•	a fidelity plan, including specific process metrics to be used to ensure the pilot project is implemented as intended; and 

•	a measurement and evaluation plan, including specific activities, evaluation requirements and outcome measures to be used to test the working hypothesis or theory of change, as well as dates for when these data will be made available. 

The LFC, in consultation with the division and the agency administering a pilot project, must develop performance measures for the agency to evaluate the pilot project. For each year the pilot project is in effect, a notification of the evaluation shall be sent to the agency on or before June 15, and the evaluation must be completed and submitted by the agency to the committee on or before July 15. The notification must include the performance measures to be evaluated and: 

•	a summary of the information and requirements; 

•	the outputs produced by, the outcomes resulting from, and baseline data associated with each performance measure; 

•	whether the information provided demonstrates that the pilot project has proven that the hypothesis of the pilot project is likely to be beneficial in New Mexico; 

•	if the pilot project is evidence-based, research-based, promising or lacking evidence of effectiveness; 

•	spending data to date; and 

•	results of evaluations or audits of the pilot project. 

The LFC, in consultation with the division and the agency, must review a pilot project's evaluation submitted for an agency and issue its approval or disapproval on or before September 1 following receipt of the evaluation.

The Government Accountability Expendable Trust (GAET) is created as a non-reverting fund in the State Treasury. The GAET consists of distributions, appropriations, gifts, grants and donations. Income from investment of the trust will be credited to the trust. Money in the trust is to be expended only as provided by the act. 

On July 1 of each year, a distribution is to be made from the GAET to the GAPF in an amount equal to twenty-five percent of the balance of the trust or three hundred million dollars ($300,000,000), whichever is greater; provided that if the balance of the trust is less than three hundred million dollars ($300,000,000), the balance of the trust must be distributed. 

Money in the GAET may be expended in the event that general fund balances, including all authorized revenues and transfers to the General Fund and balances in the General Fund’s operating reserve, will not meet the level of appropriations authorized from the General Fund for a fiscal year. In that event, the legislature may appropriate from the GAET 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 a transfer from the General Fund operating reserve that exhausts that fund balance. 

A new section of Chapter 6, Article 4 NMSA 1978 is enacted to create the "government accountability program fund" (GAPF), a non-reverting fund in the State Treasury. The fund consists of distributions, appropriations, gifts, grants, donations and income from investment of the fund. The DFA is to administer the fund. Money in the fund is subject to appropriation by the legislature to fund pilot projects to be evaluated per this act, provided that money appropriated to fund a pilot project shall be provided in equal amounts for each year the pilot project is funded by the appropriation. 

Section 6-4-4 NMSA 1978 is amended to change a provision of law that currently transfers certain excess revenue to the Tax Stabilization Reserve to instead transfer the excess revenue to the GAET.
 

 Currently, the Government Accountability Expandable Trust (GAET) and Government Accountability Program Fund (GAPF) do not exist, nor are there related allowable distributions. Also, certain excess revenue currently may only be transferred to the Tax Stabilization Reserve. If the bill does not pass, this situation will remain the status quo. 

 Committee Substitute by the House Appropriations and Finance Committee on February 8, 2024

HAFCcs/HB 196: The House Appropriations and Finance Committee substitute for House Bill 196 (HB 196) makes the following changes:

•	New titles are given to the trust and related fund, the “Government Results and Opportunity Expendable Trust” and the “Government Results and Opportunity Program Fund;”

•	Definitions are removed;

•	The required annual distribution to the Government Results and Opportunity Program Fund is reduced from $300,000,000 to $100,000,000;

•	A section is added for a temporary provision, requiring that during the 2024 legislative interim, the staff of the Legislative Finance Committee and the State Budget Division of the Department of Finance and Administration meet regularly to examine and analyze the provisions of the Accountability in Government Act to determine if changes to that act could be made to ensure more cost-effective and responsive government services. Further, on or before December 15, 2024, the staff must report their findings and make recommendations for any necessary legislative changes to the Legislative Finance Committee.