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AN ACT

RELATING TO HIGHER EDUCATION; CHANGING THE NAME OF AN

ENDOWMENT FUND; CLARIFYING THE APPROPRIATE USES OF MONEY IN

THE FUND; MAKING DISBURSEMENTS FOR ENDOWMENT PURPOSES.

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) is amended to read:

"21-1-27.1. HIGHER EDUCATION ENDOWMENT FUND CREATED.--

A. The "higher education 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 higher education 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 higher

education endowment fund only to establish endowments at

public post-secondary educational institutions as provided in

this 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

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specified in this section.

D. Money in the higher education endowment fund is

appropriated to the department to be disbursed for endowment

purposes, including endowed chairs, lectureships,

professorships, scholarships for students, 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. Unless otherwise provided by law, 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

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)

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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

of the disbursement.

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

higher education endowment fund may be matched by any public

post-secondary educational institution in this section for the

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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 for students, 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. TEMPORARY PROVISION--DISBURSEMENT OF

APPROPRIATION.--The five million dollars ($5,000,000)

appropriated from the general fund to the faculty endowment

fund in the General Appropriation Act of 2008 shall be

disbursed in fiscal year 2009 and subsequent fiscal years

pursuant to the provisions of Section 21-1-27.1 NMSA 1978

except that, in lieu of the disbursements in Subsection E of

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that section, the appropriation shall be disbursed as follows:

A. one million dollars ($1,000,000) each for the

university of New Mexico, the university of New Mexico health

sciences center, New Mexico state university and the New

Mexico institute of mining and technology; provided that no

disbursement shall be made pursuant to this subsection until

the institution has shown to the satisfaction of the higher

education department that it has received matching funds in an

amount equal to at least fifty percent of the disbursement;

B. one hundred twenty-five thousand dollars

($125,000) 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 subsection until

the institution has shown to the satisfaction of the higher

education department that it has received matching funds in an

amount equal to at least forty percent of the disbursement;

C. for the total endowments at the New Mexico

military institute, community colleges, branch community

colleges and technical and vocational institutes, five hundred

thousand dollars ($500,000), provided that:

(1) the total amount shall be distributed

pursuant to rules of distribution promulgated by the higher

education department that ensure each eligible institution an

opportunity to receive an equitable share of the total amount

to be distributed; and

(2) no disbursement shall be made pursuant

to this subsection until the institution has shown to the

satisfaction of the higher education department that it has

received matching funds in an amount equal to at least thirty

percent of the disbursement; and

D. if a different amount is appropriated to the

faculty endowment fund in the General Appropriation Act of

2008, then the disbursements provided for in this section

shall be adjusted proportionately.

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