Pub. 16 2019 Issue 1

4 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S EXECUTIVE VICE PRESIDENT’S MESSAGE JOHN W. ANDERSON, EXECUTIVE VICE PRESIDENT New Mexico Bankers Association FEDERAL LEGISLATIVE AND REGULATORY MATTERS For rural electric cooperatives, the bill requires 100 percent zero carbon resources by 2050, composed of at least 80 percent renewable energy after considering safety, reliability, and costs to customers. State and Federal Legislative Updates State Legislature: The 2019 Legislature adjourned at noon on Saturday, March 16, having considered 695 bills introduced in the House and 675 in the Senate. Legislators approved 310 bills-the highest output in a decade. The Governor signed 282 bills into law and vetoed 28. In the final week of the session, the Legislature agreed on a diverse set of bills that include: a $7 bil - lion budget for the next fiscal year; capital improve - ments worth $933 million; education reforms that add $450million for public education; a gradual increase in the minimumwage that will eventu- ally reach $12 per hour; allowing same-day voter registration; a tax package estimated to raise an additional $70million in state revenues; a plan for transitioning the state to renewable energy sources; and film tax credit revisions to include an increase in the annual cap from$50million to $110million. Legislation Approved by the Governor: • Trust Taxation: The Legislature approved the NMBA Trust Commit - tee-sponsored HB 163 which creates a new section of the Income Tax Act to provide a deduction from net income of an estate or trust for certain income sequestered within the overall trust or estate that is set aside for future distributions to a nonresi- dent individual. The deduction would not include income from allocable sources of income occurring in New Mexico such as income derived from real property, miner- al, oil and gas interests, and water rights, but would allow the deduction for busi- ness income that would be apportioned to the non-resident’s state of residence were the income directly distributed to the beneficiary rather than flowing through the trust. The purpose of the deduction is to assist in the expansion of the trust and estate business in New Mexico by allow - ing the trustee to hold and invest income sequestered in the trust by not having to distribute that income to non-resident trust beneficiaries in the year of receipt. • SBIC: The Governor signed SB 10 which increases the amount of Severance Tax Permanent Fund (STPF) capital dedicated for investment through the Small Business Investment Corporation (SBIC) from 1 per- cent of the STPF to 2 percent, with the goal of increasing state participation in loans to small business owners in New Mexico. • Probate Code: The Governor approved SB 395 which amends the provisions of the Uniform Probate Code pertaining to adult guardianship and conservatorship matters. The bill failed to adequately address the individual liability of a con- servator which was raised by the NMBA during the 2018 Legislature. In fact, SB 395 contains a new section of law which prohibits waiver of liability for conserva- tors and their agents. • MinimumWage: SB 437 will increase the state minimum wage to $12 on and af- ter January 1, 2023. The legislation does not provide for a cost of living adjustment. • Hemp: HB 581 enacts the Hemp Man - ufacturing Act, which assigns licensing and other regulatory duties to the New Mexico Department of Agriculture for matters related to unprocessed hemp testing laboratories, hemp harvesters, and hemp research breeders. The New Mexico Environment Department is David Hockmuth, Jay Jenkins, John Gulas, Aaron Emmert, Congressman Ben Ray Lujan, John Anderson, Jon Hitchcock, Lorin Saavedra, Lonnie Talbert, Jason Wyatt, and Tim Jennings.