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Committee backs tax credit to direct money to foster‑care organizations; substitutes address FIR concerns
Summary
House Health & Human Services recommended a committee substitute for House Bill 437 creating a qualifying foster care organization income tax credit; sponsors said the substitute fixes Fiscal Impact Report concerns, sets contribution and eligibility rules and prevents double‑dipping with federal/state deductions.
Representative presenting House Bill 437 said the bill would create a state income tax credit to allow taxpayers to donate to "qualified foster care organizations" in lieu of paying tax to the state. The sponsor described the policy as modeled on programs in other states, including Arizona, and said the substitute addresses issues raised in the Fiscal Impact Report (FIR).
Andrew Thornton, a tax attorney testifying in support, described the credit as $500 for single filers and $1,000 for joint filers (sponsor language). He said the substitute added guardrails: a delayed repeal, clarifications about minimum donations, and a rule that a taxpayer cannot both claim the state credit and a separate state/federal charitable deduction for the same contribution.
Supporters from the nonprofit community, including Marilyn Beck of New Mexico Child First Network and a coalition aligned with an Arizona model called Foster Alliance, said the credit would create unencumbered local funds for organizations serving foster youth. Sponsors noted the substitute includes a 50% budget test (an organization must allocate at least 50% of its budget to foster services) and a threshold that an organization provide foster care services to at least 200 qualified individuals (a number copied from Arizona). Committee members asked whether the 200 figure would disqualify many New Mexico organizations; the sponsor and witnesses named several organizations they believed would likely qualify.
Committee members also questioned what counts as "foster care services" and whether recipients would be required to report how donations are spent. Witnesses answered that nonprofits' IRS Form 990 filings are public records and could be used to review allocations; they said eligible services include recruitment and training of foster parents, housing assistance for youth aging out of the system, and behavioral health services provided by organizations such as Red Mountain Family Services.
Representative Martinez moved for a do‑pass on the substitute; the motion was seconded and the substitute passed out of committee as a "do pass". The committee recorded the final motion and moved the bill to the next stage.
