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

SPONSOR Anderson

ORIGINAL DATE

LAST UPDATED

1/30/08

HB 524

SHORT TITLE National Guard Emergency Assistance Fund

SB

ANALYST Peery-Galon

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

$5,000.0 Non-Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

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

(Parenthesis ( ) Indicate Revenue Decreases)

Duplicates Senate Bill 203

.

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

House Bill 524 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

House Bill 524 – Page

2

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

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.

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.

House Bill 524 – Page

3

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

House Bill 524 is a duplication of Senate Bill 203.

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

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/mt