45th legislature - STATE OF NEW MEXICO - first session, 2001
RELATING TO PUBLIC FINANCES; PROVIDING FOR AN ADDITIONAL STANDARD FOR INVESTMENT OF VENTURE CAPITAL.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 6-8-21 NMSA 1978 (being Laws 1997, Chapter 183, Section 5) is amended to read:
"6-8-21. VENTURE CAPITAL INVESTMENTS.--
A. The state investment officer may make commitments to venture capital funds to invest up to three percent of the market value of the land grant permanent funds in accordance with the provisions of this section. If invested capital should at any time exceed three percent of the market value of the land grant permanent funds, no further commitments shall be made until the invested capital is less than three percent of the market value of the land grant permanent funds.
B. Not more than ten percent of the amount authorized for investment pursuant to Subsection A of this section shall be invested in any one venture capital fund. The amount invested in any one venture capital fund shall not exceed twenty percent of the committed capital of that fund.
C. In making investments pursuant to this section, the state investment officer and the council shall give consideration to investments in venture capital funds:
(1) whose investments enhance the economic development objectives of the state; provided such investments offer a rate of return and safety comparable to other venture capital investments currently available; and
(2) that invest in businesses located on state trust lands that enhance economic development and lessen the risks and increase income for the beneficiaries of the land grant permanent funds.
D. The state investment officer shall make investments pursuant to this section only upon the approval of the council and upon review of the recommendation of the venture capital investment advisory committee.
E. As used in this section:
(1) "committed capital" means the sum of the fixed amounts of money that accredited investors have obligated for investment in a venture capital fund and which fixed amounts may be invested in that fund in one or more payments over time;
(2) "state trust lands" means lands described in Article 13, Section 1 of the constitution of New Mexico; and
[(2)] (3) "venture capital fund" means a
limited partnership, limited liability company or corporation
that:
(a) has as its primary business activity the investment of funds in return for equity in businesses for the purpose of providing capital for start-up, expansion, new product development or similar business purposes;
(b) holds out prospects for capital appreciation from such investments comparable to similar investments made by other professionally managed venture capital funds;
(c) has a minimum committed capital of ten million dollars ($10,000,000);
(d) accepts investments only from accredited investors, as that term is defined in Section 2 of the federal Securities Act of 1933, as amended, 15 U.S.C. Section 77(b), and rules and regulations promulgated pursuant to that section; and
(e) has full-time management with at least five years of experience in managing venture capital funds."
Section 2. Section 7-27-5.6 NMSA 1978 (being Laws 1987, Chapter 219, Section 2, as amended) is amended to read:
"7-27-5.6. VENTURE CAPITAL INVESTMENTS.--
A. The state investment officer may make commitments to venture capital funds to invest up to three percent of the market value of the severance tax permanent fund in accordance with the provisions of this section. If invested capital should at any time exceed three percent of the market value of the severance tax permanent fund, no further commitments shall be made until the invested capital is less than three percent of the market value of the severance tax permanent fund.
B. Not more than ten percent of the amount authorized for investment pursuant to Subsection A of this section shall be invested in any one venture capital fund. The amount invested in any one venture capital fund shall not exceed twenty percent of the committed capital of that fund.
C. In making investments pursuant to this section, the state investment officer and the council shall give consideration to investments in venture capital funds:
(1) whose investments enhance the economic development objectives of the state, provided such investments offer a rate of return and safety comparable to other venture capital investments currently available; and
(2) that invest in businesses located on state trust lands that enhance economic development and lessen the risks and increase income for the beneficiaries of the land grant permanent funds.
D. The state investment officer shall make investments pursuant to this section only upon approval of the council and upon review of the recommendation of the venture capital investment advisory committee.
E. As used in this section:
(1) "committed capital" means the sum of the
fixed amounts of money that accredited investors have
obligated for investment in a venture capital fund and which
fixed amounts may be invested in that fund in one or more
payments over time; [and]
(2) "state trust lands" means lands described in Article 13, Section 1 of the constitution of New Mexico; and
[(2)] (3) "venture capital fund" means a
limited partnership, limited liability company or corporation
that:
(a) has as its primary business activity the investment of funds in return for equity in businesses for the purpose of providing capital for start-up, expansion, new product development or similar business purposes;
(b) holds out the prospects for capital appreciation from such investments comparable to similar investments made by other professionally managed venture capital funds;
(c) has a minimum committed capital of ten million dollars ($10,000,000);
(d) accepts investments only from accredited investors, as that term is defined in Section 2 of the Federal Securities Act of 1933, as amended, 15 U.S.C. Section 77(b), and rules and regulations promulgated pursuant to that section; and
(e) has full-time management with at least five years of experience in managing venture capital funds."