NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

The LFC is only preparing FIRs on bills referred to the Senate Finance Committee, the Senate Ways and Means Committee, the House Appropriations and Finance Committee and the House Taxation and Revenue Committee. The chief clerks are responsible for preparing and issuing all other bill analyses.

Only the most recent FIR version, excluding attachments, is available on the Intranet. Previously issued FIRs and attachments may be obtained from the LFC office in Room 416 of the State Capitol Building.

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

SUMMARY

Synopsis of Bill

House Bill 174 proposes to add exemptions to the Bateman Act. The Bateman act prohibits counties, municipalities and school districts from incurring debt which cannot be repaid within the current fiscal year.

The bill would exempt joint projects between two or more local public bodies not exceeding five years and contracts by or with another local public body that provide for the operation or provision and operation of a jail.

Significant Issues

Last year, in reviewing a similar bill the Attorney General's Office noted that contractual arrangements which the bill seeks to exempt from the Bateman act might still be prohibited by the New Mexico Constitution (Article IX, Sections 10, 11 and 12) which prevents public entities from incurring debt outside the current fiscal year without approval of the voters.

FISCAL IMPLICATIONS

There are no immediate fiscal impacts to the state. Allowing for debt financing includes some default risk. Thus, there is some risk that the state could be required to bail out an insolvent local government.

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