HOUSE BILL 876

49th legislature - STATE OF NEW MEXICO - first session, 2009

INTRODUCED BY

Miguel P. Garcia

AN ACT

RELATING TO PUBLIC MONEY; REQUIRING INFORMATION CONCERNING THIRD-PARTY MARKETERS TO BE DISCLOSED BEFORE MAKING CERTAIN INVESTMENTS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     Section 1. A new section of Chapter 6, Article 8 NMSA 1978 is enacted to read:

     "[NEW MATERIAL] DISCLOSURE OF THIRD-PARTY MARKETERS--PENALTY.--

          A. Neither the state investment council nor the state investment officer shall make any investment, other than investments in publicly traded equities or publicly traded fixed-income securities, unless the recipient of the investment discloses the identity of any third-party marketer who rendered services on behalf of the recipient in obtaining the investment and also discloses the amount of any fee, commission or retainer paid to the third-party marketer for the services rendered.

          B. Information disclosed pursuant to Subsection A of this section shall be included in the monthly reports of the state investment officer and the annual reports of the state investment council.

          C. Any person who fails to disclose information or knowingly withholds information required by Subsection A of this section is guilty of a fourth degree felony and shall be punished by a fine of not more than twenty thousand dollars ($20,000) or by imprisonment for a definite term not to exceed eighteen months or both.

          D. As used in this section, "third-party marketer" means a person who, on behalf of an investment fund manager or other person seeking an investment of public money, communicates with the state investment council, the state investment officer or an agent or employee of the state investment council or state investment officer and who, under a written or implied agreement, receives a fee, commission or retainer for such services from the person seeking an investment of public money."

     Section 2. A new section of the Public Employees Retirement Act is enacted to read:

     "[NEW MATERIAL] DISCLOSURE OF THIRD-PARTY MARKETERS--PENALTY.--

          A. The retirement board shall not make any investment, other than investments in publicly traded equities or publicly traded fixed-income securities, unless the recipient of the investment discloses the identity of any third-party marketer who rendered services on behalf of the recipient in obtaining the investment and also discloses the amount of any fee, commission or retainer paid to the third-party marketer for the services rendered.

          B. Information disclosed pursuant to Subsection A of this section shall be included in the quarterly performance reports of the retirement board.

          C. Any person who fails to disclose information or knowingly withholds information required by Subsection A of this section is guilty of a fourth degree felony and shall be punished by a fine of not more than twenty thousand dollars ($20,000) or by imprisonment for a definite term not to exceed eighteen months or both.

          D. As used in this section, "third-party marketer" means a person who, on behalf of an investment fund manager or other person seeking an investment from the fund, communicates with the retirement board, a member of the retirement board or an agent or employee of the retirement board and who, under a written or implied agreement, receives a fee, commission or retainer for such services from the person seeking an investment from the fund."

     Section 3. A new section of the Educational Retirement Act is enacted to read:

     "[NEW MATERIAL] DISCLOSURE OF THIRD-PARTY MARKETERS--PENALTY.--

          A. The board shall not make any investment, other than investments in publicly traded equities or publicly traded fixed-income securities, unless the recipient of the investment discloses the identity of any third-party marketer who rendered services on behalf of the recipient in obtaining the investment and also discloses the amount of any fee, commission or retainer paid to the third-party marketer for the services rendered.

          B. Information disclosed pursuant to Subsection A of this section shall be included in the quarterly performance reports of the board.

          C. Any person who fails to disclose information or knowingly withholds information required by Subsection A of this section is guilty of a fourth degree felony and shall be punished by a fine of not more than twenty thousand dollars ($20,000) or by imprisonment for a definite term not to exceed eighteen months or both.

          D. As used in this section, "third-party marketer" means a person who, on behalf of an investment fund manager or other person seeking an investment from the fund, communicates with the board, a member of the board or an agent or employee of the board and who, under a written or implied agreement, receives a fee, commission or retainer for such services from the person seeking an investment from the fund."

- 5 -