HOUSE BILL 1031
48th legislature - STATE OF NEW MEXICO - first session, 2007
INTRODUCED BY
Candy Spence Ezzell
AN ACT
RELATING TO THE INVESTMENT OF PUBLIC MONEY; ALLOWING ADDITIONAL INVESTMENTS FOR CERTAIN LOCAL GOVERNMENT PERMANENT FUNDS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 6-6-19 NMSA 1978 (being Laws 1989, Chapter 276, Section 3, as amended) is amended to read:
"6-6-19. LOCAL GOVERNMENT PERMANENT FUND.--
A. The local governing body of a county or municipality may by ordinance establish a local government permanent fund and a local government income fund.
B. The local government permanent fund shall constitute a fund in the treasury of the county or municipality into which may be deposited at the end of a fiscal year an amount of the unappropriated general fund surplus. The amount that may be deposited into the local government permanent fund is any portion of the unappropriated general fund surplus that is in excess of fifty percent of the prior fiscal year's budget of the county or municipality. Money in the permanent fund may be appropriated or expended only pursuant to approval of the voters of the county or municipality as provided in Subsection E of this section.
C. [Money in the local government permanent fund may be invested by the local board of finance for the county or municipality in the types of investments specified in Section 6-10-10 NMSA 1978 and as specified in Sections 6-10-36 and 6-10-44 NMSA 1978.] Earnings from the investment of the permanent fund shall be deposited in the local government income fund in the treasury of the county or municipality. Money in the income fund may be budgeted and appropriated by the local governing body for expenditure for any purpose of the county or municipality or may be deposited in the permanent fund.
D. [Investment authority for] A local government permanent fund shall be invested as follows:
(1) if the fund is less than ten million dollars ($10,000,000), it shall be invested as other funds of the local government; and
(2) if the fund is ten million dollars ($10,000,000) or over, it may be invested as funds of class A counties are invested and, if the fund is managed by an investment advisor that is registered with the federal securities and exchange commission and that currently manages assets with a value of at least five hundred million dollars ($500,000,000), the fund may also be invested in the following:
(a) corporate debt securities, provided that: 1) the total amount invested in securities issued by the same corporation or related corporate affiliates shall not exceed five percent of the market value of the permanent fund; 2) the securities shall be denominated in United States currency; and 3) the securities shall be rated investment grade BBB or higher by a national rating service;
(b) asset-backed securities, mortgage-backed securities, collateralized mortgage obligations or commercial mortgage-backed securities, provided that: 1) the total amount invested pursuant to this subparagraph shall not exceed five percent of the market value of the permanent fund; 2) the securities shall be denominated in United States currency; and 3) the securities shall be rated investment grade BBB or higher by a national rating service;
(c) corporate equities, provided that: 1) the total amount invested in the equities of any one corporation shall not exceed five percent of the market value of the permanent fund; 2) the total amount invested pursuant to this subparagraph shall not exceed fifteen percent of the market value of the permanent fund; and 3) the equities shall be listed on a national stock exchange; or
(d) exchange traded funds and mutual funds, provided that: 1) an investment shall not be made in a fund of which more than five percent of its value is invested in the equity or debt securities of any one issuer; and 2) other than investments in funds wholly composed of fixed income securities, the total amount invested pursuant to this subparagraph shall not exceed fifteen percent of the market value of the permanent fund.
E. The governing body of a county or municipality may adopt a resolution calling for an election on the question of expenditure of any amount of the local government permanent fund for a specified county or municipal purpose. The election shall be held within sixty days after the action of the governing body. The election shall be called, conducted, counted and canvassed substantially in the manner provided by law for general elections within the county or special municipal elections under the Municipal Election Code. If a majority of the registered voters of the county or municipality voting on the question [vote] votes for the expenditure of a specified amount of the local government permanent fund for a specified county or municipal purpose, then that amount of money shall be available for appropriation and expenditure by the county or municipality for that purpose. If a majority of the registered voters of the county or municipality voting on the question [vote] votes against the expenditure of a specified amount of the local government permanent fund for a specified county or municipal purpose, then money in the local government permanent fund shall not be expended or appropriated for that purpose. Following an election at which the question was not approved, the question shall not again be submitted to the voters of that county or municipality within one year of the date of that election."
Section 2. Section 6-10-61 NMSA 1978 (being Laws 1923, Chapter 76, Section 32) is amended to read:
"6-10-61. PERMANENT FUND INVESTMENT LAWS NOT AFFECTED.--Nothing in [this act] Chapter 6, Article 10 NMSA 1978 shall be construed to prevent the investment in [such] a manner as may be provided by law of any permanent funds of the state or of any county, city, town or board in control in the state."
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