Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance

committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

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F I S C A L I M P A C T R E P O R T

SPONSOR SCORC

ORIGINAL DATE

LAST UPDATED

2/19/07

2/24/07 HB

SHORT TITLE PUBLIC MONEY DEPOSIT REQUIREMENTS

SB 986/SCORCS

ANALYST Propst

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Finance and Administration (DFA)

SUMMARY

Synopsis of Bill

Senate Corporation and Transportation Committee substitute for Senate Bill 986 revises the

requirements for the deposit of public money.

SIGNIFICANT ISSUES

The committee substitute provides that interest-bearing deposits must be made available to all

commercial banks and savings banks that (1) have a main office or staffed branch office in the

geographical boundaries of the governmental unit; (2) qualify as public depositories by reason of

insurance of the account by a federal agency or by depositing collateral security or giving bond

based on the highest rate bid by each bank as provided by law; (3) pay interest not less than 100

percent of the asked price on U.S. Treasury securities of the same maturity on the same day of

deposit.

The proposed legislation also removes language that seems to allow a governmental entity the

opportunity to invest bond issue proceeds at prevailing interest rats without compromising tax

exempt provisions of the Internal Revenue Code.

WEP/mt