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F I S C A L I M P A C T R E P O R T
SPONSOR Carraro
ORIGINAL DATE
LAST UPDATED
1/21/08
HB
SHORT TITLE National Guard Emergency Assistance Fund
SB 203
ANALYST Peery-Galon
APPROPRIATION (dollars in thousands)
Appropriation
Recurring
or Non-Rec
Fund
Affected
FY08
FY09
$5,000.0 Non-Recurring
General Fund
REVENUE (dollars in thousands)
Estimated Revenue
Recurring
or Non-Rec
Fund
Affected
FY08
FY09
FY10
$5,000.0
Non-Recurring
National Guard
Emergency
Assistance Fund
SOURCES OF INFORMATION
LFC Files
Responses Received From
State Treasurer’s Office (STO)
Veterans’ Services Department (VSD)
No Response Received From
Department of Military Affairs
SUMMARY
Synopsis of Bill
Senate Bill 203 creates the National Guard Emergency Assistance Fund in the State Treasury.
The fund is to consist of transfers, appropriations, gifts, grants, donations and bequests made to
the fund. Income from the fund and repayments of loans made from the fund is to be credited to
the fund, and money in the fund is not to revert or be transferred to any other fund at the end of a
fiscal year. The fund is to be a revolving fund for the purpose of making loans and money in the
fund is appropriated to the Veterans’ Services Department for that purpose. Expenditures from
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Senate Bill 203 – Page 2
the fund shall be made on warrant of the Secretary of Finance and Administration pursuant to
vouchers signed by the Secretary of Veterans’ Services. The Veterans’ Services Department is
to implement and maintain a program for providing low-interest loans to members of the New
Mexico National Guard who are serving on active duty. Eligible criteria and terms of the loans
are to be set by rule of the department, provided that the rules allow a spouse to obtain a loan if
the National Guard member is unavailable because of active duty service.
Senate Bill 203 appropriates $5,000.0 from the general fund to the National Guard Emergency
Assistance Fund, for expenditure in fiscal year 2009 and subsequent fiscal years, for the purpose
of providing loans pursuant to the provisions of Section 1 of the act.
FISCAL IMPLICATIONS
The appropriation of $5,000.0 contained in this bill is a non-recurring expense to the general
fund. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not
revert to the general fund.
Continuing Appropriations language
This bill creates a new fund and provides for continuing appropriations. The LFC has concerns
with including continuing appropriation language in the statutory provisions for newly created
funds, as earmarking reduces the ability of the legislature to establish spending priorities.
STO states unless creation of the National Guard Emergency Assistance Fund creates an undue
administrative burden in the Investment Division, there will be no fiscal impact to the Cash
Management Division.
VSD states the $5 million appropriation from the general fund would start the program with
hopes that it would become self-sustaining through interest on the loans collected.
SIGNIFICANT ISSUES
VSD reports members of the New Mexico National Guard and their families would benefit from
the proposed legislation. These loans would assist families when one of the incomes is lost due
to deployment of the soldier.
PERFORMANCE IMPLICATIONS
VSD states the number of loans would need to be tracked and added to the outcomes to be
presented to the Legislative Finance Committee on a yearly basis.
ADMINISTRATIVE IMPLICATIONS
VSD reports it would have to create forms, determine interest rates, dedicate at lease 2 FTE,
promote the program, set up loan criteria, and create payment schedules.
TECHNICAL ISSUES
VSD questions what interest rate would be used for the loans. Would it be tied to the Prime
Interest, and how long would the loan terms be. VSD notes it would have to work with the
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Senate Bill 203 – Page 3
Public Regulation Commission to set up interest rates, repayment schedules and loan criteria to
stay within the banking rules of the state.
OTHER SUBSTANTIVE ISSUES
The proposed legislation creates in the State Treasurer’s Office the National Guard Emergency
Assistance Fund. State Treasurer’s Office reports that under the Statewide Human Resources,
Accounting and Management Reporting System (SHARE), such funds are established by the
Department of Finance and Administration (DFA) in SHARE. Currently, DFA notifies the State
Treasurer’s Office when a fund created by statute is established in SHARE. Although the
SHARE system has modified the manner in which funds are “created in the treasury", the State
Treasurer has the same statutory responsibilities and duties of oversight and monthly interest
allocations.
ALTERNATIVES
VSD states since this would be geared to assist the National Guard, it may be better to fund this
program within the Department of Military Affairs.
RPG/bb