1. A. The "excess extraction taxes suspense fund" is created as a nonreverting fund in the state treasury. Money in the fund shall only be used to make transfers by the department of finance and administration as required by this section.

2. B. At the end of each fiscal year, the department of finance and administration shall calculate and transfer the balance of the fund attributable to that fiscal year as follows:

   1. (1) if in the current fiscal year the total net receipts attributable to the tax imposed pursuant to Section 7-31-4 NMSA 1978 and distributed pursuant to Section 7-1-6.20 NMSA 1978 exceed the annual average amount, the department shall distribute the excess amount above the annual average amount as follows:

      1. (a) to the tax stabilization reserve, the amount necessary to bring the balance of state reserves to a level equal to twenty-five percent of the aggregate recurring appropriations for that fiscal year from the general fund, as determined by the department; provided that, if the balance in the excess extraction taxes suspense fund is not sufficient to meet that level, the entire balance shall be transferred to the tax stabilization reserve; and
      2. (b) the balance of the excess amount above the annual average amount, if any, after the transfer is made pursuant to Subparagraph (a) of this paragraph shall be transferred as follows: 1) for fiscal years 2026 through 2028, fifty percent to the early childhood education and care fund and fifty percent to the behavioral health trust fund; provided that if, as of the end of one of those fiscal years, the balance of the early childhood education and care fund is less than the balance of that fund as of the end of fiscal year 2025, the transfer to the behavioral health trust fund made pursuant to this item shall be decreased by an amount equal to one-half of the difference between the balance of the early childhood education and care fund as of the end of fiscal year 2025 and the balance of that fund as of the end of that fiscal year; and 2) for fiscal year 2029 and each fiscal year thereafter, one hundred percent to the early childhood education and care fund; and
   2. (2) the remaining balance of the fund, if any, shall be distributed to the severance tax permanent fund.

3. C. As used in this section:

   1. (1) "annual average amount" means the total net receipts attributable to the tax imposed pursuant to Section 7-31-4 NMSA 1978 and distributed pursuant to Section 7-1-6.20 NMSA 1978 in the immediately preceding five fiscal years, divided by five; and
   2. (2) "state reserves" means the general fund balances, as determined by the department of finance and administration, including all authorized revenues and transfers to the general fund and balances in the appropriation contingency fund, the general fund operating reserve, the state-support reserve fund and the tax stabilization reserve.

History: Laws 2020, ch. 3, § 4; 2023, ch. 22, § 1; 2025, ch. 26, § 1.

ANNOTATIONS

The 2025 amendment, effective July 1, 2025, provided for fifty percent of the balance of the excess extraction taxes suspense fund that exceeds the annual average amount to be transferred to the behavioral health trust fund for fiscal years 2026 through 2028; in the section heading, after "early childhood education and care fund" added "behavioral health trust fund"; and in Subsection B, Subparagraph B(1)(b), after the subparagraph designation, deleted "to the early childhood education and care fund" and after "Subparagraph (a) of this paragraph" added the remainder of the subparagraph.

The 2023 amendment, effective July 1, 2024, provided for the distribution of certain excess oil and gas tax revenues to the severance tax permanent fund, and defined "annual average amount" and revised the definition of "state reserves"; in the section heading, added "severance tax permanent fund"; in Subsection B, after "administration shall" added "calculate and"; in Paragraph B(1), added "if in the current fiscal year the total net receipts attributable to the tax imposed pursuant to Section 7-31-4 NMSA 1978 and distributed pursuant to Section 7-1-6.20 NMSA 1978 exceed the annual average amount, the department shall distribute the excess amount above the annual average amount as follows", added new subparagraph designation "(a)", in Subparagraph B(1)(b), after "the balance", deleted "remaining in the excess extraction taxes suspense fund" and added "of the excess amount above the annual average amount", after "made pursuant to" deleted "Paragraph (1) of this subsection" and added "Subparagraph (a) of this paragraph; and", and added Paragraph B(2); and in Subsection C, added a new Paragraph C(1), and in Paragraph C(2), after "the tax stabilization reserve", deleted "and the tobacco settlement permanent fund".