2019 New Mexico Statutes
Chapter 6 - Public Finances
Article 10 - Public Money
Section 6-10-16 - Security for deposits of public money.

A. Deposits of public money shall be secured by:

(1) securities of the United States, its agencies or instrumentalities;

(2) securities of the state of New Mexico, its agencies, instrumentalities, counties, municipalities or other subdivisions;

(3) securities, including student loans, that are guaranteed by the United States or the state of New Mexico;

(4) revenue bonds that are underwritten by a member of the financial industry regulatory authority, known as FINRA, and are rated "BAA" or above by a nationally recognized bond rating service; or

(5) letters of credit issued by a federal home loan bank.

B. No security is required for the deposit of public money that is insured by the federal deposit insurance corporation or the national credit union administration.

C. All securities shall be accepted as security at market value. The restrictions of Subsection A of this section apply to all securities subject to this subsection.

History: 1953 Comp., § 11-2-18.1, enacted by Laws 1969, ch. 243, § 1; 1981, ch. 332, § 5; 1987, ch. 79, § 6; 1987, ch. 307, § 1; 2000, ch. 47, § 1; 2013, ch. 65, § 4.

Cross references. — For federal housing administration bonds as security for public deposits, see 3-45-24 NMSA 1978.

For severance tax bonds as security for public deposits, see 7-27-19 NMSA 1978.

The 2013 amendment, effective June 14, 2013, changed the authorized underwriters of revenue bonds that may secure deposits of public money; deleted the requirement that obligations of the state of New Mexico be accepted at par value; in Paragraph (4) of Subsection A, after "member of the", deleted "national association of securities dealers" and added "financial industry regulatory authority" and after "known as", deleted "N.A.S.D." and added "FINRA"; and in Subsection C, deleted the former first sentence which required that obligations of the state of New Mexico be accepted at par value, and in the current first sentence, after "All", deleted "other".

The 2000 amendment, effective May 17, 2000, inserted the paragraph designations within Subsection A and designated part of former Subsection A as present Subsection B, substituted "bonds that" for "bonds qualify as security for the deposit public money only if they" in Subsection A(4), added Subsection A(5), deleted "the federal savings and loan insurance corporation" preceding "or the national credit union" in Subsection B, and redesignated former Subsection B as Subsection C.

1987 amendments. — Laws 1987, ch. 79, § 6, effective June 19, 1987, adding to the end of Subsection A "or the national credit union administration," was approved March 20, 1987. However, Laws 1987, ch. 307, § 1, effective June 19, 1987, in Subsection A, deleting "or, if not rated are approved by the state board of finance or its delegate" from the end of the second sentence; and in Subsection B, inserting "which are obligations" near the beginning, was approved April 10, 1987. The section is set out above as amended by the Laws 1987, ch. 307, § 1. See 12-1-8 NMSA 1978.

Mutual funds as collateral. — Mutual funds may not be pledged as collateral for deposits of public funds. 1987 Op. Att'y Gen. No. 87-04.

Investment in mutual funds. — State chartered banks and savings and loan associations are permitted to invest in mutual funds. 1987 Op. Att'y Gen. No. 87-04.

Bonds of New Mexico mortgage finance authority are acceptable as security. — Although the New Mexico mortgage finance authority is not a state agency, it is a state instrumentality and as such, its bonds are acceptable as security for deposit of public money under this section. 1977 Op. Att'y Gen. No. 77-27.

Farmers' home administration loans fully guaranteed by federal government. — Any farmers' home administration loan which is fully guaranteed by the federal government would qualify as a proper security for public funds which are deposited in banks of this state. 1966 Op. Att'y Gen. No. 66-145.

Am. Jur. 2d, A.L.R. and C.J.S. references. — 63C Am. Jur. 2d Public Funds §§ 13, 14.

26A C.J.S. Depositaries § 9(1).