• Changes capital gains deduction to $2,500 or 40% for the sale of a New Mexico business valued at not more than $1 million; • Eliminates lower corporate income tax bracket, making it a flat 5.9% rate for all corporate income; and • Ensures receipts derived from copayments or deductibles by health care providers are GRT deductible. Paid Family and Medical Leave Act (SB 3) Clearly, one of the most controversial bills considered by the 2024 Legislature was SB 3 (Stewart), the Paid Family and Medical Leave Act. This was the fourth session in which the issue has been addressed, and, again, SB 3 was defeated in the House 34-36, with 11 Democrats joining all House Republicans voting against the legislation. Opponents cited the following reasons for opposition: the ease with which the law could be abused, inadequate protection for employers, the program’s fiscal unsustainability, the unrealistically large amount of leave (12 weeks) that could be taken every year for a wide range of purposes, the imposition of a tax on employers and employees to create the program, and the disruption the program would have on workplaces, especially for small businesses. Budget The Legislature approved a budget of $10.2 billion for the next fiscal year beginning on July 1, 2024, an increase of over 6% from the current year. Reserves will be held at 30%. Some of the budget highlights include: • $10.5 million for the Local Economic Development Act job creation fund (LEDA); • $6.7 million for the Job Training Incentive Program (JTIP); • $100 million for career technical education; • $750 million for road maintenance construction and improvements; • $50 million to shore up rural hospitals; • 3% compensation increase for all state employees; • $50 million to the NM Housing Trust Fund and $50 million to the Affordable Housing Act; • $125 million to the NM Finance Authority for the Opportunity Enterprise Fund for housing development and infrastructure; • $300 million for the Land of Enchantment Fund to support natural resource projects; and • $15 million for medical professionals’ loan repayment assistance. General Obligation Bonds The legislation authorizes the issuance of general obligation bonds totaling approximately $289.6 million. The bill includes bond issues for senior citizen facilities statewide ($30.4 million), library resource acquisitions ($19 million), and higher education, special school and tribal school capital improvements and acquisitions ($229.6 million). Capital Outlay Projects (SB 275) The legislation appropriates in excess of $1 billion to capital outlay projects statewide, including $932.2 million from the general fund and $73.5 million from other state funds. The appropriations contained in the legislation are non-recurring expenses for state agencies, higher education, judiciary, individual legislative and governor’s projects. Bills Monitored by the NMBA That Were Enacted by Legislature and Signed by the Governor: • HB 5: Workforce Development and Apprenticeship Fund — Support • HB 83: Angel Investment Tax Credit Extension — Support • HB 177: New Mexico Match Fund — Support • HB 195: Housing Opportunity Enterprise Fund — Support • SB 7/HB 2: Housing Trust Fund — Support • SB 216: NM Finance Authority Housing Projects — Support • SB 7/HB 2: Housing Trust Fund Appropriation — Support • SB 125/HB 252: Military Income Tax Exemption-Sunset Removal — Support Bills Monitored by the NMBA That Failed To Be Enacted by the Legislature: • HB 246: Financial Literacy Mandate for Graduation — Support • HB 125/SB 110: State Bank — Opposed • SB 37: Revised Uniform Unclaimed Property Act — Support • SB 3: Paid Family and Medical Leave Act — Oppose • HB 71: Student Loan Bill of Rights — Neutral • HB 248: Removal of Cap on Social Security Taxation — Support • HB 249: Social Security Taxation Indexing — Support Among the Governor’s Key Priorities To Pass and Be Signed by the Governor Are: • SB 271: Repeat Felony Offender No-Bond Hold • HB 129: 7-Day Firearm Waiting Period • SB 5: Firearms Near Polling Places • HB 236: Public Safety Return to Work • SB 96: Increase Second-Degree and Attempted Murder Penalties • SB 128: State Fire Members Retirement • SB 175: Law Enforcement and Corrections Recruitment ($25 million) • HB 193: Law Enforcement Retention • HB 41: Clean Fuels • HB 177: New Mexico Match Fund ($75 million) • SB 17: Health Care Delivery and Access Act (Hospital Assessment/Tax) 7
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