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

SPONSOR:	Romero		DATE TYPED:	2/25/03		HB
SHORT TITLE:		Local Government Investments				SB	750
					ANALYST:		Neel

REVENUE

Estimated Revenue		Subsequent Years Impact	Recurring or Non-Rec	Fund Affected
FY03	FY04

(Parenthesis ( ) Indicate Revenue Decreases)

Relates to:

SB 41 Local Government Investments

HB 118 Local Government Investments

HB 306 Investments by County & Municipal Treasurers

SOURCES OF INFORMATION

LFC files

Responses Received From

Attorney General Office (AG)

SUMMARY

Synopsis of Bill

Senate Bill 750 amends NMSA 1978, Section 6-10-10 to allow county and municipal treasurers to invest in bonds, notes, or other obligations of the federal government and its instrumentalities and bonds, notes, or other obligations guaranteed, as the principal and interest, by the federal government, its instrumentalities, and its programs.

Significant Issues

This would allow county and municipal governments to invest in backed securities such as Freddic Mac. Fanny Mae and Federal Home Loan Board securities that have better yields than securities guaranteed by the federal government. Although US sponsored investments are slightly less secure than US guaranteed investments, this change would allow more flexibility when investing.

Local governments can already access these investment vehicles through the State Treasurer’s local investment pool.

FISCAL IMPLICATIONS

No fiscal impact is noted. However; there will be a positive impact on local revenues if local entities shift their portfolio toward higher yielding investments.

SN/sb