Committee advances 'Future Fund' baby-bond plan after wide debate; task force, funding, eligibility remain to be resolved

The Senate Tax, Business and Transportation Committee on Feb. 28 recommended passage of House Bill 7, a proposal to create publicly held accounts (commonly called “baby bonds”) for New Mexico children, after extensive testimony and questions about funding, eligibility, and administration.

Representative Linda Serrato introduced the bill (HB 7), which would establish trust accounts for children born in New Mexico, with funds becoming available as young people reach adulthood provided they meet conditions such as continuous residence, high school graduation (or equivalency), and completion of a financial literacy course. The bill sets up a task force to develop financing and administrative details and directs the Legislative Council Service and the state treasurer to participate in planning.

Supporters — including Partnership for Community Action, New Mexico Voices for Children, the New Mexico Center on Law and Poverty and community leaders — told the committee the accounts can help close generational wealth gaps and support education, homeownership and business formation. Partnership for Community Action’s representative described a local pilot that seeded accounts with $6,000 for 15 families and reported early growth.

Committee members pressed sponsors on funding and residency rules. Senator Figueroa and others asked how the trust would be seeded and whether a lump-sum appropriation was required or whether a smaller recurring contribution would suffice. Sponsors said the task force would recommend a funding model; one private pilot cited a projected 7% annual return and estimated long-term growth figures, including hypothetical balances at age 65.

Senators also asked how “continuously lived in New Mexico” would be defined, how the plan would work for children born in neighboring jurisdictions but who attend New Mexico schools, and how the state would ensure compliance with the anti-donation clause. Sponsors repeatedly pointed to the bill’s task force as the vehicle to resolve those questions and to propose options including seed funding or matching contributions.

Senator O’Malley moved a do-pass recommendation, seconded by Senator Jaramillo; the committee recorded seven votes in favor and two against and reported the bill do pass. Several senators said they supported the concept but wanted to see more concrete funding commitments or task-force deliverables before final floor action.

Ending: House Bill 7 was recommended “do pass” by the committee. The committee’s action advances the Future Fund for further consideration while leaving key design issues — funding level, precise residency rules and distribution mechanics — to the task force and future legislative action.