us-nm/stat
NMSA 1978, § 7-27-5.19 — Deposits in New Mexico financial institutions; limitations
A.
No more than twenty percent of the book value of the severance tax permanent
fund may be invested in deposits in New Mexico financial institutions under terms and
conditions set by the council in accordance with the provisions of this section.
B.
To be eligible for deposits under this section, a financial institution's loans and
investments shall equal in the aggregate at least one hundred thousand dollars
($100,000). If eligible, a financial institution may qualify for deposits as follows:
(1) a financial institution may qualify for deposits in an amount equal to new
loans and investments made by that financial institution after July 1, 1993;
(2) the financial institution shall provide the state investment officer with the
necessary documentation and information for each new loan or investment and the
state investment officer shall verify that each such loan or investment meets the
requirements of this section and the regulations, guidelines and investment policies
adopted pursuant to this section; and
(3) in any calendar year, the state investment officer may increase the
deposits in any financial institution only to the extent new loans and investments made
by the financial institution have increased over the same period of the prior year.
C.
Notwithstanding any other collateral, interest rate or other provisions of law to the
contrary governing deposit of public money in Chapter 6, Article 10 NMSA 1978,
deposits of the severance tax permanent fund made pursuant to this section shall be
governed by the regulations, guidelines and investment policies established by the
council and shall not be made until such regulations, guidelines and policies are
adopted. Those policies shall provide:
(1) the terms and conditions for pledging of collateral security and the amount
and kind of collateral security to be pledged; provided:
(a) no collateral shall be required for deposits of financial institutions rated "A"
by the council pursuant to its risk assessment analysis, unless the council in its sole
discretion deems it necessary to protect the severance tax permanent fund;
(b) financial institutions not rated "A" by the council shall secure each
severance tax permanent fund deposit with security having an aggregate value equal to
seventy-five percent of the amount of money deposited by that institution or any greater
percentage determined by the council in its sole discretion to be necessary to protect
the severance tax permanent fund;
(c) secured deposits shall be secured by: 1) securities of the United States or
its agencies or instrumentalities, the state or its agencies or instrumentalities or political
subdivisions of the state; 2) securities guaranteed by agencies or instrumentalities of
the United States; or 3) New Mexico residential mortgages;
(d) to be rated "A" by the council, a bank shall at a minimum have: 1) primary
capital at least equal to six percent of assets; 2) net income after taxes at least equal to
sixty-one hundredths of one percent of the average assets of the bank for the current
quarter and for each of the three previous quarters; and 3) an aggregate amount of
nonperforming loans, defined as loans that are at least ninety days past due, that does
not exceed thirty-four and nine-tenths percent of primary capital; provided the council in
its sole discretion may increase any of the requirements of this paragraph to protect the
severance tax permanent fund; and
(e) to be rated "A" by the council, a savings and loan association shall have a
regulatory net worth equal to at least three percent of total assets and net income after
taxes equal to at least thirty hundredths of one percent of average assets for the current
quarter and for each of the previous three quarters; provided the council may increase
these requirements or add additional criteria for nonperforming loans as a percentage of
primary capital or net worth that are similar to the criteria for banks, as necessary to
conform to changing applicable federal regulatory requirements or to protect the
severance tax permanent fund;
(2) the rate at which severance tax permanent fund deposits shall bear
interest, payable monthly, which shall be at a fixed market rate determined by the
council, but in no event shall the rate of interest paid be less than the yield available on
comparable maturities of obligations of the United States government, its agencies or
instrumentalities or obligations guaranteed by the United States government, its
agencies or instrumentalities, whichever is higher;
(3) the terms of maturity, renewal or withdrawal; provided that in no event
shall the maturity exceed eight years and the council may withdraw any deposit before
maturity without penalty if more than seventy-five percent collateral is required by the
rules and regulations adopted by the council; and
(4) such other terms, including the financial condition of the financial
institution, as the council deems prudent to protect the severance tax permanent fund
and to implement efficiently and effectively the deposit program.
D.
In making deposits in New Mexico financial institutions pursuant to this section,
the state investment officer shall not deposit from the severance tax permanent fund an
amount that exceeds two hundred percent of the total equity capital in the case of banks
or two hundred percent of the net worth in the case of savings and loan associations or
ten percent of the total of that bank's or the savings and loan association's deposits,
whichever is less. These limits shall be based on the most recently published statement
of financial condition required by federal or state financial authorities as certified by an
authorized officer of the financial institution unless the council has more current reliable
information from the financial institution. In the event a financial institution exceeds the
limitations set forth in this subsection, the state investment officer may withdraw without
penalty the deposits that exceed that limitation. The maximum funds on deposit or the
deposit limit in this subsection shall not apply to the state fiscal agent bank as to the
funds held by the fiscal agent bank or demand deposits held by a state checking
depository bank approved by the state board of finance in accordance with the
provisions of Section 6-10-35 NMSA 1978.
E.
As used in this section:
(1) "financial institution" means a New Mexico bank, a branch of a bank doing
business in New Mexico or a savings and loan association that is qualified as an
insured public depository;
(2) "investment" means a New Mexico municipal bond or a New Mexico
industrial revenue bond; and
(3) "loan" means a loan of any term that is secured or unsecured and is made
for business purposes. "Loan" does not include a loan that is a renewal or restructuring
of a loan existing on or before July 1, 1993, a loan of more than three million dollars
($3,000,000) to one borrower, a student loan, a consumer loan or a loan to purchase or
provide permanent financing on a personal residence, but does include a loan that is
made to "persons of low or moderate income" as that term is defined in the Mortgage
Finance Authority Act [Chapter 58, Article 18 NMSA 1978], is secured by real estate
and is held and serviced by the original lending financial institution in New Mexico. For
purposes of this paragraph, "business" includes but is not limited to manufacturing;
construction; transportation; communications; publishing; wholesale or retail business;
restaurants; entertainment; architectural, engineering and other professional services;
medical and health services; food processing; farming or ranching; mining and natural
resource exploration and development; and research and technology development.
Source: official text