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AN ACT

RELATING TO HIGHER EDUCATION; CHANGING PROVISIONS AND

DISTRIBUTIONS OF THE FACULTY ENDOWMENT FUND; RECONCILING

CONFLICTING AMENDMENTS TO THE SAME SECTION OF LAWS BY

REPEALING LAWS 2003, CHAPTER 379, SECTION 1; MAKING AN

APPROPRIATION.

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

Section 1. Section 21-1-27.1 NMSA 1978 (being Laws

2002, Chapter 31, Section 1, as amended by Laws 2003, Chapter

379, Section 1 and by Laws 2003, Chapter 392, Section 1) is

amended to read:

"21-1-27.1. FACULTY ENDOWMENT FUND CREATED.--

A. The "faculty endowment fund" is created in the

state treasury. The fund shall consist of appropriations,

income from investment of the fund, gifts, grants, donations

and bequests.

B. The faculty endowment fund shall be

administered by the higher education department. Money shall

be disbursed only on warrant of the secretary of finance and

administration upon voucher signed by the secretary of higher

education or the secretary's authorized representative.

C. Money shall be disbursed from the faculty

endowment fund only to establish endowments at public post-

secondary educational institutions as provided in this

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section. An institution shall not receive a disbursement for

an endowment until that institution has notified the

department that it has received matching funds for the

endowment from other than governmental sources in the amount

specified in this section.

D. Money in the faculty endowment fund is

appropriated to the department to be disbursed for endowment

purposes, including endowed chairs, lectureships,

professorships, scholarships, graduate assistantships, faculty

and development programs that will enhance the quality of

public post-secondary education in New Mexico. The

department, by rule, shall establish procedures for disbursing

money from the fund. Not less than five percent of each

institution's total endowment effort resulting from amounts

specified in this section shall address one or more of the

governor's initiatives.

E. Until June 30, 2010, the following institutions

shall be eligible for the following disbursements from the

fund:

(1) two million dollars ($2,000,000) each

for the university of New Mexico, New Mexico state university

and the New Mexico institute of mining and technology and one

million five hundred thousand dollars ($1,500,000) for the

university of New Mexico school of medicine; provided that no

disbursement shall be made pursuant to this paragraph until

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the institution has shown to the satisfaction of the

department that it has received matching funds in an amount

equal to at least fifty percent of the disbursement;

(2) five hundred thousand dollars ($500,000)

each for New Mexico highlands university, eastern New Mexico

university, western New Mexico university and northern New

Mexico state school; provided that no disbursement shall be

made pursuant to this paragraph until the institution has

shown to the satisfaction of the department that it has

received matching funds in an amount equal to at least forty

percent of the disbursement; and

(3) for the total endowments at the New

Mexico military institute, community colleges, branch

community colleges and technical and vocational institutes,

two million five hundred thousand dollars ($2,500,000),

provided that:

(a) the total amount shall be

distributed pursuant to rules of distribution promulgated by

the department that ensure each eligible institution an

opportunity to receive an equitable share of the total amount

to be distributed; and

(b) no disbursement shall be made

pursuant to this paragraph until the institution has shown to

the satisfaction of the department that it has received

matching funds in an amount equal to at least thirty percent

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of the disbursement.

F. Effective July 1, 2010, funds remaining in the

faculty endowment fund may be matched by any public post-

secondary institution in this section for the purposes stated

in this section in accordance with the rules established by

the department.

G. The endowment funds of the institutions shall

not be expended but shall be invested by the institutions in

accordance with the prudent investor rule, and in accordance

with the provisions of Section 21-1-38 NMSA 1978. The income

from the investments shall be used by the institutions to

provide funding for chairs, lectureships, professorships,

scholarships, graduate assistantships and faculty development

programs, including paying all or a portion of the salary of

the faculty member or the expenses necessary to support

associated academic activities.

H. No later than July 1 of 2008, 2009 and 2010,

the department shall report to the legislative finance

committee on disbursements made pursuant to this section. The

report shall include the amounts disbursed to each

institution, the amount of matching funds and their source and

the purpose of the endowments."

Section 2. APPROPRIATION.--Twelve million dollars

($12,000,000) is appropriated from the general fund to the

faculty endowment fund for expenditure in fiscal year 2007 and

subsequent fiscal years for the purpose of making

disbursements for endowments pursuant to Section 21-1-27.1

NMSA 1978. Any unexpended or unencumbered balance remaining

at the end of fiscal year 2012 shall revert to the general

fund.

Section 3. REPEAL.--Laws 2003, Chapter 379, Section 1

is repealed.

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