The 2026 legislative session has officially wrapped up, and the good news for restaurants is that no major legislation directly affecting our industry advanced this year. The proposed liquor excise tax bill did not even receive a hearing, so there are no new liquor tax increases coming out of this session.
The biggest victory of the session was the passage of House Bill 99, the medical malpractice reform bill, which is now on the Governor’s desk for signature. HB 99 makes multiple important reforms to New Mexico’s malpractice law, including:
- Raising the standard of proof for punitive damages
- Capping punitive damages
- Ending the stacking of multiple lawsuits over a single incident
After a wild ride, HB 99 passed the House 66–3 and the Senate 40–2 and is expected to be signed into law. These reforms will make it easier to recruit, attract, and retain doctors in New Mexico and should reduce our state’s sky‑high malpractice insurance premiums; the Office of the Superintendent of Insurance estimates premiums should decline by at least 18.5%, and possibly more. A big thanks to Representative Christine Chandler for leading this effort and to Representative Gail Armstrong and the 47 bipartisan co-sponsors who helped push this across the finish line.
Another major success was Senate Bill 1, now signed into law, which brings New Mexico into the interstate licensure compact for doctors. The New Mexico Medical Board expects this to increase the number of doctors applying to practice here by 10–15% annually. While this primarily affects the health care system, it has downstream benefits for our restaurants, communities, workforce stability, and overall quality of life in New Mexico.
Unfortunately, eight other interstate licensure compacts for health care professionals—including EMTs, dentists, psychologists, counselors, physician assistants, physical therapists, occupational therapists, and speech therapists/audiologists—passed the House unanimously but did not make it to the Governor’s desk. This is a disappointment given the serious workforce shortages New Mexico continues to face in these fields.
Lawmakers also moved forward on a large tax and budget package, including Senate Bill 151 (the “tax package”) and House Bill 2 (the budget). Key highlights include:
- An increase of roughly $110 million in corporate taxes over what they would have been without SB 151, which may affect New Mexico’s overall tax competitiveness.
- A proposed 1% pay increase for all state and public school employees.
- A construction gross receipts tax deduction for affordable multifamily housing.
- A new $10,000 physician income tax credit (stackable with the rural health care practitioner credit).
- Extension of the High Wage Jobs Tax Credit to 2036.
- A local news printer tax credit aimed at sustaining local journalism.
The FY 2027 budget, totaling approximately $11.1 billion, includes investments in early childhood (universal childcare), economic development (state fair improvements, affordable housing, quantum computing initiatives), public safety, and significant health‑care and education funding, including a new medical school at UNM and support for rural graduate medical education.
For restaurants, the bottom line this session is:
- No new liquor excise taxes or direct industry-specific burdens passed.
- Broader reforms in malpractice, healthcare workforce, and tax policy may indirectly affect costs, workforce, and the overall business environment over time.
We will continue to monitor the Governor’s actions on remaining bills and any line‑item vetoes that might impact employers or the broader economy. As always, we’ll keep you updated on any developments that affect your business.
Thank you for your continued support and engagement. Please reach out if you have questions about specific legislation or how these changes might impact your operation.