AGO 07-04.

• Case Date: September 10, 2007
• Court: New Mexico

New Mexico Attorney General Opinions 2007. AGO 07-04. September 10, 2007OPINION OFGARY K. KINGAttorney General Opinion No. 07-04BY: Martha A. DalyAssistant Attorney General TO: The Honorable Al Park New Mexico State Representative 1840 Dakota NEAlbuquerque, NM 87110 QUESTION:

Does a 2007 amendment to the Governmental Conduct Act that limits contributions to state officers and employees by businesses that provide financial services apply to lawyers who perform bond work for the state?

CONCLUSION: No. The amendment does not apply to attorneys who provide legal services, described herein, to the State in connection with its bond offerings. FACTS: The 2007 legislature amended the Governmental Conduct Act, NMSA 1978, §§ 10-16-1 though 18 (1967, as amended through 2007) (hereinafter "the Act"), to add this new provision:

A business that contracts with a state agency to provide financial services involving the investment of public money or issuance of bonds for public projects shall not knowingly contribute anything of value to a public officer or employee of that state agency who has authority over the investment of public money or issuance of bonds, the revenue of which is used for public projects in the state.

2007 N.M. Laws, Ch. 362, § 11(A). Section 11(B) of the amendment prohibits the same officers and employees from accepting any such contribution. ANALYSIS: We understand the question concerning the applicability of the prohibition in subsection A to lawyers who do bond work with the State to include both those who act as "bond counsel" on bond offerings of the State as well as those who perform services as "disclosure counsel" on those offerings. A law firm providing services as bond counsel issues an opinion for the benefit of bondholders which usually addresses (1) whether the bonds are valid and binding obligations of the issuer; (2) the source of payment or security for the bonds; and (3) whether and to what extent interest on the bonds is excluded from gross income of the owner for federal income tax purposes and exempt from taxes, if any, imposed by the state of the issuer. David A. Franklin, Esq. and James J. Prendergast, Esq., Glossary of Public Finance Terminology (1992). In so doing, the firm conducts due diligence on matters related to that opinion, and provides advice and assistance to the issuing entity...