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House Bill 75 (HB 75) relates to public finance. HB 75 enacts the Public Banking Act. HB 75 creates the Public Bank of New Mexico. HB 75 establishes a Board of Directors and the structure of the Public Bank of New Mexico. HB 75 provides duties. HB 75 permits certain investments. HB 75 prohibits conflicts of interest. HB 75 creates the State Banking Fund. HB 75 requires the State Treasurer to deposit and maintain a certain amount of public money in the Public Bank of New Mexico. HB 75 provides penalties. HB 75 makes an appropriation.Legislation Overview:
House Bill 75 (HB 75) makes a fifty million dollar ($50,000,000) appropriation from the General Fund to the State Banking Fund for FY2023 and subsequent fiscal years to capitalize the Public Bank of New Mexico for the purpose of carrying out the provisions of this Public Banking Act. Balances remaining at the end of a fiscal year will not revert to the General Fund. HB 75 is effective on July 1, 2022. Exceptions: • HB 75 provides for an exception and states that Public Money, Chapter 6, Article 10 NMSA 1978 is not applicable to deposits made to the Public Bank of New Mexico except as provided in this section. • HB 75 further states that within thirty days of the incorporation of the Public Bank of New Mexico and the bank receiving its formal charter, the state treasurer will make a deposit into the Public Bank of New Mexico in an amount of sixty million dollars ($60,000,000). • HB 75 states that the state treasurer will not withdraw the funds from the initial deposit provided for in this section, but may deposit and withdraw additional funds in the Public Bank of New Mexico. Conflicts of Interest-Penalty: HB 75 states that if any director, officer or employee of the bank has an interest, either direct or indirect, in any contract to which the bank is or is to be a party, such interest will be disclosed to the board in writing. The director, officer or employee having such interest will not participate in any action by the bank with respect to that contract. HB 75 further states that any person who has a conflict of interest as provided in this section and participates in any transaction involving that conflict of interest or knowingly fails to notify the bank of that conflict is guilty of a misdemeanor and upon conviction will be sentenced pursuant to the provisions of Section 31-19-1 NMSA 1978. Reporting: HB 75 requires the chief executive officer to: (1) annually prepare a budget for the bank that will be reviewed and approved by the board. Any funds provided for the operating budget of the bank will be provided from bank income and equity; (2) hire all employees of the bank; (3) keep accurate and complete records and accounts concerning all transactions involving the bank; and (4) report quarterly to the board on the investments made pursuant to the Public Banking Act and on the available and encumbered funds of the fund. • Annually, a report will be submitted no later than October 1 each year to the Legislative Finance Committee, the Revenue Stabilization and Tax Policy Committee and any other appropriate interim legislative committees. • The bank will make the report available to the public by publishing the report on the internet. Definitions provided by this act: • Bank means the Public Bank of New Mexico. • Board means the board of directors of the bank. • Director means a member of the board. • Fund means the State Banking Fund and will include all assets, liabilities, equity, income, and expenses of the bank.Status Quo:
Public Money, Chapter 6, Article 10 NMSA 1978: The fiscal year for the state and for the counties, cities, towns, villages, and school districts thereof will begin on July 1 and end on June 30. The year beginning on July 1, 1925, will be known as the fourteenth fiscal year. Provided, that with reference to appropriations for state purposes, not to exceed seven-twelfths (7/12) of the appropriations for the thirteenth fiscal year, as heretofore known will be available for expenditure for that portion of said thirteenth fiscal year ending June 30, 1925, and the remaining five-twelfths (5/12) of the appropriations for such thirteenth fiscal year will apply on and will not be in addition to the appropriations made for the fourteenth fiscal year as above defined.