SB 223 MEDICAID TRUST FUND

Sen William E. Sharer

Actions: [4] SCC/SHPAC/SFC-SCC-germane-SHPAC [6] DP-SFC

Scheduled: Not Scheduled

 SB223 establishes the Medicaid Trust Fund and provides direction on fund distribution from the federal Mineral Leasing Act.  

 Synopsis: SB223 relating to public health by creating the Medicaid Trust Fund and the state supported Medicaid Fund by changing the distribution of certain oil and gas emergency school tac revenue and Federal Mineral Leasing Act revenue from the Early Childhood Education and Care Fund to the new Medicaid Trust Fundand subjecting the distribution to a limitation.

Analysis: Senate Bill 223 (SB223) The "Medicaid Trust Fund" is created within the state treasury. The fund consists of distributions, appropriations, gifts, grants, and donations. Income from investment of the fund shall be credited to the fund.

The State Investment Officer, subject to the approval of the State Investment Council, shall invest money in the fund and the State Investment Officer will report quarterly to the Legislative Finance Committee and the State Investment Council. An annual report is also required to the Revenue Stabilization and Tax Policy Committee and the Legislative Finance Committee. 

Money in the Medicaid Trust Fund 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 Operating Reserve, the Appropriation Contingency Fund and the Tax Stabilization Reserve, will not meet the level of appropriations authorized from the General Fund 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.

In addition, the State-supported Medicaid Fund. is created as a non-reverting fund in the State Treasury.

The Health Care Authority Department shall administer the Fund. Money in the fund is subject to appropriation by the legislature to support the state Medicaid program and to match federal funds for the state Medicaid program.

The Excess Extraction Taxes Suspense Fund, is created as a non-reverting 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 language in this Act. 

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) 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: (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 (b) to the Medicaid trust fund, 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; provided that, if a distribution from the Medicaid Trust Fund to the state-supported Medicaid fund in the previous fiscal year is an amount equal to or greater than one-half of the amount appropriated for the state Medicaid program for that fiscal year, no further transfer pursuant to this subparagraph shall be made, and the remaining balance of the fund, if any, shall be distributed to the severance tax permanent fund. 

Specific language pertaining to further distributions now read: 
A. If, by June 30 of each fiscal year, the net receipts for that fiscal year of the money received by the state pursuant to the federal Mineral Leasing Act exceed the annual average amount, the excess amount above the annual average amount shall be distributed to the Medicaid Trust Fund and attributed to that fiscal year; provided that, if a distribution from the Medicaid Trust Fund to the state-supported Medicaid fund is sufficient to meet one-half of the funding needed for the state Medicaid program for the following fiscal year, as determined by the Department of Finance and Administration in consultation with the legislative finance committee, no further distribution pursuant to this subsection shall be made. 
Language referencing the ….distribution from the Medicaid Trust Fund to the state-supported Medicaid fund is sufficient to meet one half of the funding needed…. is new language.

B. If, by June 30, 2025, and by June 30 of each fiscal year thereafter, the remaining amount of the net receipts for that fiscal year of the money received by the state pursuant to the federal Mineral Leasing Act after the distribution pursuant to Subsection A of this section exceeds the threshold amount, the excess shall be distributed to the severance tax permanent fund.
C. The Department of Finance and Administration shall make the calculations to determine if excess amounts shall be distributed pursuant to this section. If there is an excess amount, the distribution shall be made as soon as practicable. If there is not an excess amount, no distribution shall be made. 

The effective date of the provisions of this Act is July 1, 2024.