New Mexico Statutes Chapter 6. Public Finances § 6-4-35. Medicaid trust fund

A. The “medicaid trust fund” is created as a nonreverting fund in the state treasury.  The trust fund consists of distributions, appropriations, gifts, grants and donations.  Income from investment of the trust fund shall be credited to the trust fund.  Money in the trust fund shall be expended only as provided in this section.

B. The state investment officer shall invest money in the trust fund in accordance with the prudent investor rule as set forth in Chapter 6, Article 8 NMSA 1978 and in consultation with the health care authority.

C. The state investment officer shall report quarterly to the legislative finance committee and the state investment council on the investments made pursuant to this section.  An annual report shall be submitted no later than October 1 of each year to the legislative finance committee, the revenue stabilization and tax policy committee and any other appropriate interim committees.

D. On July 1, 2029 and each July 1 thereafter, a distribution shall be made from the trust fund to the state-supported medicaid fund in an amount equal to five percent of the average of the year-end market values of the trust fund for the immediately preceding three calendar years;  provided that a distribution shall not be made until the balance of the trust fund at the end of a fiscal year is at least five hundred million dollars ($500,000,000).

E. Money in the trust fund may be appropriated for any purpose if, in a fiscal year, federal matching funds for the state medicaid program:

F. In fiscal years 2026 through 2029, money in the trust fund may be appropriated to support the state medicaid program if a reduction in federal medicaid funding received by the state will cause a reduction in coverage or benefits below the levels provided as of the effective date of this 2025 act.

G. Money in the 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, the tax stabilization reserve and the early childhood education and care fund, 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, the tax stabilization reserve and the early childhood education and care fund that exhaust those fund balances.