0001|                           SENATE BILL 971
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0002|     43rd legislature - STATE OF NEW MEXICO - first session, 1997
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0003|                            INTRODUCED BY
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0004|                          ROMAN M. MAES III
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0005|     
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0006|                                   
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0007|     
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0008|                                   
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0009|     
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0010|                                AN ACT
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0011|     RELATING TO FINANCIAL INSTITUTIONS; ALLOWING DEPOSITS OF THE
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0012|     SEVERANCE TAX PERMANENT FUND IN BRANCH BANKS.
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0013|     
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0014|     BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: 
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0015|          Section 1.  Section 7-27-5.19 NMSA 1978 (being Laws 1993,
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0016|     Chapter 267, Section 2) is amended to read:
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0017|          "7-27-5.19.  DEPOSITS IN NEW MEXICO FINANCIAL
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0018|     INSTITUTIONS--LIMITATIONS.--
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0019|               A.  No more than twenty percent of the book value of
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0020|     the severance tax permanent fund may be invested in deposits in
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0021|     New Mexico financial institutions under terms and conditions
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0022|     set by the council in accordance with the provisions of this
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0023|     section.
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0024|               B.  To be eligible for deposits under this section,
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0025|     a financial institution's loans and investments <s>[must]</s>
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0001|     <u>shall</u> equal in the aggregate at least one hundred thousand
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0002|     dollars ($100,000).  If eligible, a financial institution may
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0003|     qualify for deposits as follows:
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0004|                    (1)  a financial institution may qualify for
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0005|     deposits in an amount equal to new loans and investments made
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0006|     by that financial institution after July 1, 1993;
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0007|                    (2)  the financial institution shall provide
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0008|     the state investment officer with the necessary documentation
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0009|     and information for each new loan or investment and the state
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0010|     investment officer shall verify that each such loan or
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0011|     investment meets the requirements of this section and the
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0012|     regulations, guidelines and investment policies adopted
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0013|     pursuant to this section; and
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0014|                    (3)  in any calendar year, the state investment
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0015|     officer may increase the deposits in any financial institution
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0016|     only to the extent new loans and investments made by the
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0017|     financial institution have increased over the same period of
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0018|     the prior year.
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0019|               C.  Notwithstanding any other collateral, interest
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0020|     rate or other provisions of law to the contrary governing
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0021|     deposit of public money in Chapter 6, Article 10 NMSA 1978,
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0022|     deposits of the severance tax permanent fund made pursuant to
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0023|     this section shall be governed by the regulations, guidelines
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0024|     and investment policies established by the council and shall
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0025|     not be made until such regulations, guidelines and policies are
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0001|     adopted.  Those policies shall provide:
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0002|                    (1)  the terms and conditions for pledging of
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0003|     collateral security and the amount and kind of collateral
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0004|     security to be pledged; provided:
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0005|                         (a)  no collateral shall be required for
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0006|     deposits of financial institutions rated "A" by the council
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0007|     pursuant to its risk assessment analysis, unless the council in
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0008|     its sole discretion deems it necessary to protect the severance
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0009|     tax permanent fund;
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0010|                         (b)  financial institutions not rated "A"
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0011|     by the council shall secure each severance tax permanent fund
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0012|     deposit with security having an aggregate value equal to
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0013|     seventy-five percent of the amount of money deposited by that
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0014|     institution or any greater percentage determined by the council
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0015|     in its sole discretion to be necessary to protect the severance
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0016|     tax permanent fund;
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0017|                         (c)  secured deposits shall be secured
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0018|     by:  1) securities of the United States or its agencies or
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0019|     instrumentalities, the state or its agencies or
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0020|     instrumentalities or political subdivisions of the state; 2) 
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0021|     securities guaranteed by agencies or instrumentalities of the
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0022|     United States; or 3) New Mexico residential mortgages;
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0023|                         (d)  to be rated "A" by the council, a
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0024|     bank <s>[must]</s> <u>shall</u> at a minimum have:  1) primary capital at
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0025|     least equal to six percent of assets; 2) net income after taxes
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0001|     at least equal to sixty-one hundredths of one percent of the
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0002|     average assets of the bank for the current quarter and for each
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0003|     of the three previous quarters; and 3) an aggregate amount of
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0004|     nonperforming loans, defined as loans that are at least ninety
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0005|     days past due, that does not exceed thirty-four and nine-tenths
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0006|     percent of primary capital; provided the council in its sole
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0007|     discretion may increase any of the requirements of this
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0008|     paragraph to protect the severance tax permanent fund; and
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0009|                         (e)  to be rated "A" by the council, a
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0010|     savings and loan association <s>[must]</s> <u>shall</u> have a regulatory
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0011|     net worth equal to at least three percent of total assets and
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0012|     net income after taxes equal to at least thirty hundredths of
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0013|     one percent of average assets for the current quarter and for
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0014|     each of the previous three quarters; provided the council may
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0015|     increase these requirements or add additional criteria for
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0016|     nonperforming loans as a percentage of primary capital or net
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0017|     worth that are similar to the criteria for banks, as necessary
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0018|     to conform to changing applicable federal regulatory
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0019|     requirements or to protect the severance tax permanent fund;
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0020|                    (2)  the rate at which severance tax permanent
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0021|     fund deposits shall bear interest, payable monthly, which shall
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0022|     be at a fixed market rate determined by the council, but in no
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0023|     event shall the rate of interest paid be less than the yield
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0024|     available on comparable maturities of obligations of the United
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0025|     States government, its agencies or instrumentalities or
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0001|     obligations guaranteed by the United States government, its
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0002|     agencies or instrumentalities, whichever is higher;
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0003|                    (3)  the terms of maturity, renewal or
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0004|     withdrawal; provided that in no event shall the maturity exceed
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0005|     eight years and the council may withdraw any deposit before
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0006|     maturity without penalty if more than seventy-five percent
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0007|     collateral is required by the rules and regulations adopted by
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0008|     the council; and
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0009|                    (4)  such other terms, including the financial
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0010|     condition of the financial institution, as the council deems
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0011|     prudent to protect the severance tax permanent fund and to
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0012|     implement efficiently and effectively the deposit program.
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0013|               D.  In making deposits in New Mexico financial
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0014|     institutions pursuant to this section, the state investment
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0015|     officer shall not deposit from the severance tax permanent fund
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0016|     an amount that exceeds two hundred percent of the total equity
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0017|     capital in the case of banks or two hundred percent of the net
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0018|     worth in the case of savings and loan associations or ten
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0019|     percent of the total of that bank's or the savings and loan
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0020|     association's deposits, whichever is less.  These limits shall
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0021|     be based on the most recently published statement of financial
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0022|     condition required by federal or state financial authorities as
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0023|     certified by an authorized officer of the financial institution
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0024|     unless the council has more current reliable information from
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0025|     the financial institution.  In the event a financial
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0001|     institution exceeds the limitations set forth in this
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0002|     subsection, the state investment officer may withdraw without
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0003|     penalty the deposits that exceed that limitation.  The maximum
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0004|     funds on deposit or the deposit limit in this subsection shall
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0005|     not apply to the state fiscal agent bank as to the funds held
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0006|     by the fiscal agent bank or demand deposits held by a state
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0007|     checking depository bank approved by the state board of finance
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0008|     in accordance with the provisions of Section 6-10-35 NMSA 1978.
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0009|               E.  As used in this section:
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0010|                    (1)  "financial institution" means a New Mexico
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0011|     bank, <u>a branch of a bank doing business in New Mexico</u> or <u>a</u>
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0012|     savings and loan association that is qualified as an insured
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0013|     public depository;
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0014|                    (2)  "investment" means a New Mexico municipal
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0015|     bond or a New Mexico industrial revenue bond; and
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0016|                    (3)  "loan" means a loan of any term that is
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0017|     secured or unsecured and is made for business purposes.  "Loan"
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0018|     does not include a loan that is a renewal or restructuring of a
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0019|     loan existing on or before July 1, 1993, a loan of more than
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0020|     three million dollars ($3,000,000) to one borrower, a student
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0021|     loan, a consumer loan or a loan to purchase or provide
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0022|     permanent financing on a personal residence, but does include a
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0023|     loan that is made to "persons of low or moderate income" as
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0024|     that term is defined in the Mortgage Finance Authority Act, is
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0025|     secured by real estate and is held and serviced by the original
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0001|     lending financial institution in New Mexico.  For purposes of
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0002|     this paragraph, "business" includes but is not limited to
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0003|     manufacturing; construction; transportation; communications;
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0004|     publishing; wholesale or retail business; restaurants;
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0005|     entertainment; architectural, engineering and other
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0006|     professional services; medical and health services; food
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0007|     processing; farming or ranching; mining and natural resource
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0008|     exploration and development; and research and technology
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0009|     development."
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0010|                                    
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0011|   
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0012|                      FORTY-THIRD LEGISLATURE
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0013|                        FIRST SESSION, 1997
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0014|   
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0015|   
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0016|                                               February 26, 1997
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0017|   
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0018|   Mr. President:
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0019|   
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0020|       Your CORPORATIONS & TRANSPORTATION COMMITTEE, to
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0021|   whom has been referred
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0022|   
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0023|                          SENATE BILL 971
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0024|   
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0025|   has had it under consideration and reports same with
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0001|   recommendation that it DO PASS, and thence referred to the
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0002|   FINANCE COMMITTEE.
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0003|   
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0004|                                Respectfully submitted,
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0005|   
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0006|   
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0007|   
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0008|                                
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0009|   __________________________________
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0010|                                Roman M. Maes, III, Chairman 
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0011|   
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0012|   
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0013|   
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0014|   Adopted_______________________   Not
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0015|   Adopted_______________________
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0016|             (Chief Clerk)                          (Chief Clerk)
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0017|   
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0018|   
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0019|                     Date ________________________
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0020|   
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0021|   
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0022|   The roll call vote was <u> 6 </u> For <u> 0 </u> Against
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0023|           Yes:    6
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0024|           No:     0
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0025|                Excused:     Fidel, Griego, Leavell, McKibben
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0001|           Absent: None
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0002|   
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0003|   
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0004|   S0971CT1
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0005|   
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0006|     
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0007|   
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0008|                      FORTY-THIRD LEGISLATURE
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0009|                        FIRST SESSION, 1997
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0010|   
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0011|   
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0012|                                                   March 5, 1997
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0013|   
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0014|   Mr. President:
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0015|   
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0016|       Your FINANCE COMMITTEE, to whom has been referred
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0017|   
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0018|                          SENATE BILL 971
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0019|   
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0020|   has had it under consideration and reports same with
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0021|   recommendation that it DO PASS.
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0022|   
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0023|                                Respectfully submitted,
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0024|   
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0025|   
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0001|   
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0002|                                
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0003|   __________________________________
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0004|                                Ben D. Altamirano, Chairman 
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0005|   
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0006|   
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0007|   
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0008|   Adopted_______________________   Not
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0009|   Adopted_______________________
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0010|             (Chief Clerk)                          (Chief Clerk)
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0011|   
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0012|   
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0013|   
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0014|                     Date ________________________
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0015|   
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0016|   
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0017|   The roll call vote was <u> 7 </u> For <u> 0 </u> Against
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0018|           Yes:    7
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0019|           No:     None
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0020|                Excused:     Aragon, Eisenstadt, Ingle, Romero
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0021|           Absent: None
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0022|   
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0023|   
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0024|   S0971FC1
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0025|                          State of New Mexico
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0001|                      House of Representatives
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0002|   
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0003|                      FORTY-THIRD LEGISLATURE
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0004|                        FIRST SESSION, 1997
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0005|   
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0006|   
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0007|                                                  March 15, 1997
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0008|   
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0009|   
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0010|   Mr. Speaker:
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0011|   
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0012|       Your BUSINESS AND INDUSTRY COMMITTEE, to whom has
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0013|   been referred
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0014|   
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0015|                       SENATE BILL 971
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0016|                               
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0017|   has had it under consideration and reports same with
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0018|   recommendation that it DO PASS, and thence referred to the
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0019|   APPROPRIATIONS AND FINANCE COMMITTEE.
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0020|   
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0021|                            Respectfully submitted,
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0022|   
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0023|   
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0024|   
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0025|                            <u>                                 
</u>    |
<u></u>0001| <u>                           </u>                        Fred Luna, Chairman
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0002|   
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0003|   
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0004|   Adopted <u>                    </u>   Not Adopted <u>                     
</u>    |
<u></u>0005| <u>  </u>
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0006|           (Chief Clerk)                      (Chief Clerk)
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0007|   
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0008|                        Date <u>            </u>
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0009|   
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0010|   The roll call vote was<u> 7 </u> For<u> 0 </u> Against
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0011|   Yes:         7
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0012|                Excused:     Alwin, Getty, Gubbels, Hobbs, Rodella, Varela
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0013|           Absent: None
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0014|   
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0015|   
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0016|   G:\BILLTEXT\BILLW_97\S0971
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