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F I S C A L I M P A C T R E P O R T
SPONSOR Zanetti
ORIGINAL DATE
LAST UPDATED
2/19/07
2/20/07 HB 1238
SHORT TITLE Reversion of Military Service Insurance Fund
SB
ANALYST Peery-Galon
APPROPRIATION (dollars in thousands)
Appropriation
Recurring
or Non-Rec
Fund
Affected
FY07
FY08
NA
NA
NA
NA
(Parenthesis ( ) Indicate Expenditure Decreases)
SOURCES OF INFORMATION
LFC Files
Response Received From
Department of Military Affairs (DMA)
State Treasurer
No Responses Received From
Department of Finance Administration
SUMMARY
Synopsis of Bill
House Bill 1238 amends Section 20-4-7.3 NMSA 1978 to make the Service Member’s Life
Insurance Reimbursement Fund a non-reverting fund in the State Treasury.
FISCAL IMPLICATIONS
The Service Member’s Life Insurance Reimbursement Fund was created to provide New Mexico
National Guard service members refunds for paid federal Servicemembers Group Life Insurance
(SGLI). DMA reports the reimbursements can occur months after the premiums are paid.
Currently, statute does not state that the Service Member’s Life Insurance Reimbursement Fund
is reverting or non-reverting. Because of this, the Department of Finance Administration directs
DMA to revert any money unexpended at the end of a fiscal year in the Service Member’s Life
Insurance Reimbursement Fund. DMA reports in fiscal year 2007, the reimbursements for SGLI
will be deficient two months of funding due to the department paying two months costs from
fiscal year 2006 from fiscal year 2007 funds. DMA states due to the money reverting from the
pg_0002
House Bill 1238 – Page
2
fund, the department will experience an annual deficit of $250 thousand in paying SGLI.
SIGNIFICANT ISSUES
The Service Member’s Life Insurance Reimbursement Fund is comprised of appropriations,
gifts, grants, donations, bequests to the fund and income from investment of the fund. The State
Treasurer states the proposed legislation would clarify that the fund holding and earnings are
non-reverting. Interest earnings are based on the State Treasurer Office’s general fund rate of
return and is apportioned by the office on a monthly basis.
Both the LFC and executive recommended $1,228,000 for the Department of Military Affairs for
the Service Member’s Life Insurance Reimbursement Fund in fiscal year 2008. This amount
will refund the monthly premium of $28.00 to cover approximately 3,936 New Mexico National
Guard members with an SGLI policy of $400,000.
ADMINISTRATIVE IMPLICATIONS
State Treasurer states the Service Member’s Life Insurance Reimbursement Fund is administered
by the Department of Military Affairs.
RPG/mt