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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

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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. A local government permanent fund shall be

invested as follows:

(1) if the fund is less than forty million

dollars ($40,000,000), it shall be invested as other funds of

the local government; and

(2) if the fund is forty million dollars

($40,000,000) 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

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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 AA 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 AA or higher by a national

rating service;

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;

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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 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 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.

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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 Chapter 6, Article 10 NMSA 1978 shall be

construed to prevent the investment in 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."