AN ACT
RELATING TO ECONOMIC DEVELOPMENT;
CLARIFYING THE POWERS AND STATUS OF THE SMALL BUSINESS INVESTMENT CORPORATION;
CLARIFYING THE CRITERIA REQUIRED OF INVESTMENTS; DECLARING AN EMERGENCY.
BE IT ENACTED BY THE LEGISLATURE OF
THE STATE OF NEW MEXICO:
Section 1. Section 6-10-10.1 NMSA 1978 (being Laws 1988,
Chapter 61, Section 2, as amended) is amended to read:
"6-10-10.1. SHORT-TERM INVESTMENT FUND
CREATED--DISTRIBUTION OF EARNINGS--REPORT OF INVESTMENTS.--
A. There is created in the state treasury the
"short-term investment fund".
The fund shall consist of all deposits from governmental entities and
Indian tribes or pueblos that are placed in the custody of the state treasurer
for short-term investment purposes pursuant to this section. The state treasurer shall maintain a separate
account for each governmental entity and Indian tribe or pueblo having deposits
in the fund.
B. If a local public body is unable to receive
payment on public money at the rate of interest as set forth in Section 6-10-36
NMSA 1978 from financial institutions within the geographic boundaries of the
governmental unit, then a local public finance official having money of that
local public body in his custody not required for current expenditure may, with
the consent of the appropriate local board of finance, if any, remit some or
all of such money to the state treasurer for deposit for the purpose of
short-term investment as allowed by this section.
C. Before local funds are invested or reinvested
for the purpose of short-term investment pursuant to this section, the local
public body finance official shall notify and make such funds available to
banks, savings and loan associations and credit unions located within the
geographical boundaries of their respective governmental unit, subject to the
limitation on credit union accounts. To
be eligible for such funds, the financial institution shall pay to the local
public body the rate established by the state treasurer pursuant to a policy
adopted by the state board of finance for such short-term investments.
D. The local public body finance official shall
specify the length of time a deposit shall be in the short-term investment
fund, but in any event the deposit shall not be made for more than one hundred
eighty-one days. The state treasurer
through the use of the state fiscal agent shall separately track each such
deposit and shall make such information available to the public upon written
request.
E. The state treasurer shall invest the short-term
investment fund as provided for state funds under
Section 6-10-10 NMSA 1978 in
investments with a maturity at the time of purchase that does not exceed three
hundred ninety-seven days. The state
treasurer may elect to have the short-term investment fund consolidated for
investment purposes with the state funds under the control of the state
treasurer; provided that accurate and detailed accounting records are
maintained for the account of each participating entity and Indian tribe or
pueblo and that a proportionate amount of interest earned is credited to each
of the separate government accounts. The
fund shall be invested to achieve its objective, which is to realize the
maximum return consistent with safe and prudent management.
F. At the end of each month, all net investment
income or losses from investment of the short-term investment fund shall be
distributed by the state treasurer to the contributing entities and Indian
tribes or pueblos in amounts directly proportionate to the respective amounts
deposited in the fund and the length of time the amounts in the fund were
invested. The state treasurer shall
charge participating entities, Indian tribes and pueblos reasonable audit, administrative
and investment expenses to be paid directly from their net investment income
for the investment and administrative services provided pursuant to this
section.
G. As used in this section, "local public
body" means a political subdivision of the state, including school
districts and post-secondary educational institutions.
H. In addition to the deposit of funds of local
public bodies, the state treasurer may also accept for deposit, deposit and
account for, in the same manner as funds of local public bodies, funds of the
following governmental entities if the governing authority of the entity
approves by resolution the deposit of the funds for the short-term investment:
(1) the agricultural commodity commission
established under the Agricultural
Commodity Commission Act;
(2) the Albuquerque metropolitan arroyo flood
control authority established under the Arroyo Flood Control Act;
(3) the business improvement district management
committee established under the Business Improvement District Act;
(4) the New Mexico community development council
established under the New Mexico Community Assistance Act;
(5) the governing authority of only special
districts authorized under Chapter 73 NMSA 1978;
(6) the board of trustees established under the
Economic Advancement District Act;
(7) the board of directors of a corporation or
foundation established under the Educational Assistance Act;
(8) a board of directors established under the
Flood Control District Act;
(9) the New Mexico hospital equipment loan
council established under the Hospital Equipment Loan Act;
(10) the authority established under the
Industrial and Agricultural Finance Authority Act;
(11) the authority established under the Las
Cruces Arroyo Flood Control Act;
(12) the authority established under the Mortgage
Finance Authority Act;
(13) the authority established under the Municipal
Mortgage Finance Act;
(14) the authority established under the Public
School Insurance Authority Act;
(15) the authority established under the Southern
Sandoval County Arroyo Flood Control Act;
(16) a board of trustees established under the
Special Hospital District Act;
(17) the authority established under the New Mexico Finance Authority Act; and
(18) the corporation established under the Small
Business Investment Act.
I. In addition to the deposit of funds of local
public bodies, the state treasurer may also accept for deposit and deposit and
account for, in the same manner as funds of local public bodies, funds of any
Indian tribe or pueblo in the state if authorized to do so under a joint powers
agreement executed by the state treasurer and the governing authority of the
Indian tribe or pueblo under the provisions of the Joint Powers Agreements
Act."
Section 2. Section 7-27-5.15 NMSA 1978 (being Laws 1990,
Chapter 126, Section 5, as amended by Laws 2001,
Chapter 238, Section 1 and also by
Laws 2001, Chapter 252, Section 10) is amended to read:
"7-27-5.15. NEW MEXICO PRIVATE EQUITY FUNDS AND SMALL
BUSINESS INVESTMENTS.--
A. No more than three percent of the market
value of the severance tax permanent fund may be invested in New Mexico private
equity funds under this section.
B. If an investment is made under Subsection A
of this section, not more than fifteen million dollars ($15,000,000) of the
amount authorized for investment pursuant to Subsection A of this section shall
be invested in any one New Mexico private equity fund. The amount invested in any one New Mexico
private equity fund shall not exceed fifty percent of the committed capital of
that fund.
C. In making investments pursuant to Subsection
A of this section, the council shall give consideration to investments in New
Mexico private equity funds whose investments enhance the economic development
objectives of the state.
D. The state investment officer shall make
investments pursuant to Subsection A of this section only upon approval of the
council and upon review of the recommendation of the private equity investment
advisory committee. The state investment
officer is authorized to make investments pursuant to Subsection A of this
section contingent upon a New Mexico private equity fund securing paid-in
investments from other accredited investors for the balance of the minimum
committed capital of the fund.
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 New Mexico private equity fund and which fixed amounts may be
invested in that fund on one or more payments over time; and
(2) "New Mexico private equity fund"
means a limited partnership, limited liability company or corporation organized
and operating in the United States and maintaining an office staffed by a
full-time investment officer in New Mexico that:
(a) has as its primary business activity the
investment of funds in return for equity in or debt of businesses for the
purpose of providing capital for start-up, expansion, product or market
development, recapitalization or similar business purposes;
(b) holds out the prospects for capital
appreciation from such investments;
(c) has a minimum committed capital of fifteen
million dollars ($15,000,000);
(d) has at least one full-time manager with at
least three years of professional experience in assessing the growth prospects
of businesses or evaluating business plans and who has established permanent
residency in the state;
(e) is committed to investing or helps secure
investing by others, in an amount at least equal to the total investment made
by the state investment officer in that fund pursuant to this section, in
businesses with a principal place of business in the state and that hold
promise for attracting additional capital from individual or institutional
investors nationwide for businesses in the state; and
(f) accepts investments only from accredited
investors as that term is defined in Section 2 of the federal Securities Act of
1933, as amended, (15 USCA Section 77(b)) and rules and regulations promulgated
pursuant to that section.
F. The state investment officer shall make a
commitment to the small business investment corporation pursuant to the Small
Business Investment Act to invest one-fourth percent of the market value of the
severance tax permanent fund by July 1, 2001 to create new job opportunities by
providing capital for land, buildings or infrastructure for facilities to
support new or expanding businesses and to otherwise make investments to create
new job opportunities to support new or expanding businesses in a manner
consistent with the constitution of New Mexico.
On July 1, 2003 and on each July 1 thereafter, the state investment
officer shall determine whether the invested capital in the small business
investment corporation is less than one-fourth percent of the market value of
the severance tax permanent fund. If the
invested capital in the small business investment corporation is less than
one-fourth percent of the market value of the severance tax permanent fund,
further commitments shall be made until the invested capital is equal to
one-fourth percent of the market value of the fund.
G. The state investment officer shall report
semiannually on the New Mexico private equity investments made pursuant to this
section. Annually, a report shall be
submitted to the legislature prior to the beginning of each regular legislative
session and a second report no later than October 1 each year to the
legislative finance committee, the revenue stabilization and tax policy
committee and any other appropriate interim committee. Each report shall provide the amounts
invested in each New Mexico private equity fund, as well as information about
the objectives of the funds, the companies in which each fund is invested and
how each investment enhances the economic development objectives of the
state."
Section 3. Section 41-4-3 NMSA 1978 (being Laws 1976,
Chapter 58, Section 3, as amended) is amended to read:
"41-4-3. DEFINITIONS.--As used in the Tort Claims Act:
A. "board" means the risk management
advisory board;
B. "governmental entity" means the
state or any local public body as defined in Subsections C and H of this
section;
C. "local public body" means all
political subdivisions of the state and their agencies, instrumentalities and
institutions and all water and natural gas associations organized pursuant to
Chapter 3, Article 28 NMSA 1978;
D. "law enforcement officer" means a
full-time salaried public employee of a governmental entity whose principal
duties under law are to hold in custody any person accused of a criminal
offense, to maintain public order or to make arrests for crimes, or members of
the national guard when called to active duty by the governor;
E. "maintenance" does not include:
(1) conduct involved in the issuance of a permit,
driver's license or other official authorization to use the roads or highways
of the state in a particular manner; or
(2) an activity or event relating to a public
building or public housing project that was not foreseeable;
F. "public employee" means an officer,
employee or servant of a governmental entity, excluding independent contractors
except for individuals defined in Paragraphs (7), (8), (10) and (14) of this
subsection, or of a corporation organized pursuant to the Educational
Assistance Act, the Small Business Investment Act or the Mortgage Finance
Authority Act and including:
(1) elected or appointed officials;
(2) law enforcement officers;
(3) persons acting on behalf or in service of a
governmental entity in any official capacity, whether with or without
compensation;
(4) licensed foster parents providing care for
children in the custody of the human services department, corrections
department or department of health, but not including foster parents certified
by a licensed child placement agency;
(5) members of state or local selection panels
established pursuant to the Adult Community Corrections Act;
(6) members of state or local selection panels
established pursuant to the Juvenile Community Corrections Act;
(7) licensed medical, psychological or dental
arts practitioners providing services to the corrections department pursuant to
contract;
(8) members of the board of directors of the New
Mexico medical insurance pool;
(9) individuals who are members of medical review
boards, committees or panels established by the educational retirement board or
the retirement board of the public employees retirement association;
(10) licensed medical, psychological or dental
arts practitioners providing services to the children, youth and families
department pursuant to contract;
(11) members of the board of directors of the New
Mexico educational assistance foundation;
(12) members of the board of directors of the New
Mexico student loan guarantee corporation;
(13) members of the New Mexico mortgage finance
authority;
(14) volunteers, employees and board members of
court-appointed special advocate programs; and
(15) members of the board of directors of the
small business investment corporation;
G. "scope of duty" means performing
any duties that a public employee is requested, required or authorized to
perform by the governmental entity, regardless of the time and place of
performance; and
H. "state" or "state agency"
means the state of New Mexico or any of its branches, agencies, departments,
boards, instrumentalities or
institutions."
Section 4. Section 58-29-1 NMSA 1978 (being Laws 2000,
Chapter 97, Section 3) is amended to read:
"58-29-1. SHORT TITLE.--Chapter 58, Article 29 NMSA
1978 may be cited as the "Small Business Investment Act"."
Section 5. Section 58-29-2 NMSA 1978 (being Laws 2000,
Chapter 97, Section 4) is amended to read:
"58-29-2. PURPOSES.--The purposes of the Small Business
Investment Act are to:
A. implement the provisions of Subsection D of
Section 14 of Article 9 of the constitution of New Mexico to create new job
opportunities by providing capital for land, buildings or infrastructure for
facilities to support new or expanding businesses; and
B. otherwise make debt investments and equity
investments to create new job opportunities to support new or expanding
businesses in a manner consistent with the constitution of New Mexico."
Section 6. Section 58-29-3 NMSA 1978 (being Laws 2000,
Chapter 97, Section 5) is amended to read:
"58-29-3. DEFINITIONS.--As used in the Small Business
Investment Act:
A. "board" means the small business
investment corporation's board;
B. "corporation" means the small
business investment corporation;
C. "debt investment" means direct or
indirect loans or other debt obligations, the proceeds of which shall be used
to:
(1) support the acquisition or development of
land, buildings or infrastructure;
(2) create job opportunities; or
(3) otherwise enhance the economic development
objectives of the state;
D. "equity investment" means direct or
indirect ownership interests in New Mexico businesses, the proceeds of which
investment shall be used to:
(1) support the acquisition or development of
land, buildings or infrastructure;
(2) create job opportunities; or
(3) otherwise enhance the economic development
objectives of the state;
E. "fund" means the small business
investment corporation fund;
F. "New Mexico business" means, in the
case of a corporation or limited liability company, a business with its
principal office and a majority of its full-time employees located in New
Mexico or, in the case of a limited partnership, a business with its principal
place of business and eighty percent of its assets located in New Mexico; and
G. "president" means the president of
the corporation."
Section 7. Section 58-29-4 NMSA 1978 (being Laws 2000,
Chapter 97, Section 6, as amended) is amended to read:
"58-29-4. SMALL BUSINESS INVESTMENT CORPORATION
CREATED--POWERS OF THE CORPORATION.--
A. The "small business investment
corporation" is created as a nonprofit, independent, public
corporation. The corporation may:
(1) sue
and be sued in all actions arising out of any act or omission in connection
with its business or affairs;
(2) enter into any contracts or obligations
relating to the corporation that are authorized or permitted by law;
(3) cooperate with small business development
centers, regional economic development districts and parties that have
demonstrated abilities and relationships in providing financial services to new
and emerging businesses;
(4) make investments that consider the
enhancement of economic development objectives of the state as described in the
Small Business Investment Act; and
(5) make, alter or repeal such rules with respect
to the corporation's operations as are necessary to carry out its functions and
duties in the administration of the Small Business Investment Act.
B. The corporation shall not be considered a
state agency for any purpose. The
corporation is exempted from the provisions of the Personnel Act and the
Procurement Code.
C. Except as provided in the Tort Claims Act,
the state shall not be liable for any obligations incurred by the
corporation."
Section 8. Section 58-29-5 NMSA 1978 (being Laws 2000,
Chapter 97, Section 7, as amended) is amended to read:
"58-29-5. CORPORATION
BOARD OF DIRECTORS--APPOINTMENT--POWERS.--
A. The corporation shall be governed by the
board. The corporation's board of
directors shall consist of:
(1) the state treasurer or his designee;
(2) the state investment officer or his designee;
(3) six members appointed by the governor.
B. Each director shall hold office for the
length of his term in office or until a successor is appointed or elected and
begins service on the board.
C. The governor shall appoint, with the consent
of the senate, the six public directors of the board who shall serve at the
pleasure of the governor.
D. The governor's appointees to the board shall
be public members who have general expertise in small business management, but
they shall not be employed by or represent small businesses receiving equity
investments from the corporation.
E. No two members of the board shall be employed
by or represent the same company or institution.
F. The board shall annually elect a chairman
from among its members and shall elect those other officers it determines
necessary for the performance of its duties.
G. The power to set the policies and procedures
for the corporation is vested in the board.
The board may perform all acts necessary or appropriate to exercise that
power.
H. Public members of the board shall be
reimbursed for attending meetings of the board as provided in the Per Diem and
Mileage Act and shall receive no other compensation, perquisite or allowance.
I. Public members of the board are appointed
public officials of the state while carrying out their duties and activities
under the Small Business Investment Act.
The directors and the employees of the corporation are not liable
personally, either jointly or severally, for any debt or obligation created or
incurred by the corporation or for any act performed or obligation entered into
in an official capacity when done in good faith, without intent to defraud and
in connection with the administration, management or conduct of the corporation
or affairs relating to it.
J. The board shall conduct an annual audit of
the books of accounts, funds and securities of the corporation to be made by a
competent and independent firm of certified public accountants. A copy of the audit report shall be filed
with the president. The audit shall be
open to the public for inspection."
Section 9. A new section of the Small Business
Investment Act is enacted to read:
"PERMITTED
INVESTMENTS.--The corporation may:
A. make equity investments in New Mexico
businesses, provided that:
(1) the investments are made in conjunction with
cooperative agreements with parties that have demonstrated abilities and relationships
in providing financial services to new and emerging businesses;
(2) an equity investment in any one business may
not exceed ten percent of the fund; and
(3) the investments represent no more than
forty-nine percent of the total amount of equity from invested capital of a
business; or
B. make debt investments in New Mexico
businesses, provided that:
(1) the investments are made in conjunction with
cooperative agreements with parties that have demonstrated abilities and
relationships in providing financial services to new and emerging businesses;
and
(2) a debt investment in any one business may not
exceed ten percent of the fund."
Section 10. A new section of the Small Business
Investment Act is enacted to read:
"RETURN TO SEVERANCE TAX
PERMANENT FUND.--Annually, no later than thirty days after the delivery of its
annual report to the governor and the legislative finance committee, the
corporation shall return to the severance tax permanent fund an amount equal to
the net excess of funds held by the corporation. For purposes of this section, "net
excess of funds" means the return on investments to the corporation in the
amount of dividends and interest actually received plus any capital gains
actually realized, less the operating expenses of the corporation and less
amounts reasonably reserved for losses."
Section 11. EMERGENCY.--It is necessary for the public
peace, health and safety that this act take effect immediately.
HB 80
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