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AN ACT

RELATING TO PUBLIC MONEY; REVISING REQUIREMENTS FOR THE

DEPOSIT OF PUBLIC MONEY.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. Section 6-10-36 NMSA 1978 (being Laws 1977,

Chapter 136, Section 1, as amended) is amended to read:

"6-10-36. PUBLIC MONEY DEPOSITS OF CERTAIN GOVERNMENTAL

UNITS--DISTRIBUTION--INTEREST.--

A. All public money, except that in the custody of

the state treasurer, institutions of higher education,

technical and vocational institutes, incorporated

municipalities and counties that have adopted home rule

charters as authorized by the constitution of New Mexico and

local school boards that have been designated as boards of

finance, shall be deposited in qualified depositories in

accordance with the terms of this section or invested as

otherwise provided by law.

B. Deposits of funds of a governmental unit may be

made in noninterest-bearing checking accounts in one or more

banks or savings and loan associations designated as checking

depositories located within the geographical boundaries of

the governmental unit. In addition, deposits of funds may be

in noninterest-bearing accounts in one or more credit unions

designated as checking depositories located within the

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geographical boundaries of the governmental unit to the

extent the deposits are insured by an agency of the United

States. If there is no checking depository within the

geographical boundaries of the governmental unit, one or more

banks, savings and loan associations or credit unions within

the county in which the principal office of the governmental

unit is located may be so designated, but credit union

deposits shall be insured by an agency of the United States.

C. Public money placed in interest-bearing

deposits in banks and savings and loan associations shall be

equitably distributed among all banks and savings and loan

associations having their main or staffed branch offices

within the geographical boundaries of the governmental unit

that have qualified as public depositories by reason of

insurance of the account by an agency of the United States or

by depositing collateral security or by giving bond as

provided by law and that desire a deposit of public money

pursuant to this section. The deposits shall be in the

proportion that each bank's or savings and loan association's

deposits bears to the total deposits of all banks and savings

and loan associations that have their main office or staffed

branch office within the geographical boundaries of the

governmental unit and that desire a deposit of public money

pursuant to this section. The deposits of the main office of

a savings and loan association and its staffed branch offices

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within the geographical boundaries of a governmental unit is

the total deposits of the association multiplied by the

percentage that deposits of the main office and the staffed

branch offices located within the geographical boundaries of

the governmental unit are of the total deposits of the

association, net of any public fund deposits. The deposits

of each staffed branch office or aggregate of staffed branch

offices of a savings and loan association located outside the

geographical boundaries of the governmental unit in which the

main office is located is the total deposits of the

association multiplied by the percentage that deposits of the

branch or the aggregate of branches located outside the

geographical boundaries of the governmental unit in which the

main office is located are of the total deposits of the

association, net of any public fund deposits. The director

of the financial institutions division of the regulation and

licensing department shall promulgate a formula for

determining the deposits of banks' main offices and branches

for the purposes of distribution of public money as provided

for by this section.

D. Public money may be placed at the discretion of

the designated board of finance or treasurer in

interest-bearing deposits in credit unions having their main

or staffed branch offices within the geographical boundaries

of the governmental unit to the extent the deposits are

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insured by an agency of the United States.

E. The rate of interest for all public money

deposited in interest-bearing accounts in banks, savings and

loan associations and credit unions shall be set by the state

board of finance, but in no case shall the rate of interest

be less than one hundred percent of the asked price on United

States treasury bills of the same maturity on the day of

deposit. Any bank or savings and loan association that fails

to pay the minimum rate of interest at the time of deposit

provided for in this subsection for any respective deposit

forfeits its right to an equitable share of that deposit

under this section.

If the deposit is part or all of the proceeds of a bond

issue and the interest rate prescribed in this subsection

materially exceeds the rate of interest of the bonds, the

interest rate prescribed by this subsection shall be reduced

on that deposit to an amount not materially exceeding the

interest rate of the bonds if the bond issue would lose its

tax-exempt status pursuant to the provisions of the Internal

Revenue Code of 1986, as amended.

F. Public money in excess of that for which banks,

savings and loan associations and credit unions within the

geographical boundaries of the governmental unit have

qualified may be deposited in qualified depositories in other

areas within the state under the same requirements for

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payment of interest as if the money were deposited within the

geographical boundaries of the governmental unit or may be

invested as provided by law.

G. The department of finance and administration

may monitor the deposits of public money by governmental units

to assure full compliance with the provisions of this

section."

Section 2. EFFECTIVE DATE.--The effective date of the

provisions of this act is July 1, 2007.