SENATE CONSERVATION COMMITTEE SUBSTITUTE FOR

SENATE BILL 420

49th legislature - STATE OF NEW MEXICO - first session, 2009

AN ACT

RELATING TO PUBLIC FINANCE; ENACTING A NEW SECTION OF THE SEVERANCE TAX BONDING ACT TO PROVIDE FOR A DIFFERENTIAL INVESTMENT OF A PORTION OF THE SEVERANCE TAX PERMANENT FUND IN GREEN INDUSTRIES.

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

     Section 1. Section 7-27-5 NMSA 1978 (being Laws 1983, Chapter 306, Section 7, as amended) is amended to read:

     "7-27-5. INVESTMENT OF SEVERANCE TAX PERMANENT FUND.--The severance tax permanent fund shall be invested in separate differential rate and market rate investment classes. "Differential rate investments" are permitted in Sections

7-27-5.3 through 7-27-5.5, 7-27-5.13 through 7-27-5.17, 7-27-5.22 and 7-27-5.24 through [7-27-5.26] 7-27-5.27 NMSA 1978 and are intended to stimulate the economy of New Mexico and to provide income to the severance tax permanent fund. "Market rate investments" are investments that are not differential rate investments and are intended to provide income to the severance tax permanent fund. All market rate investments and differential rate investments shall be invested in accordance with the Uniform Prudent Investor Act and shall be accounted for in accordance with generally accepted accounting principles."

     Section 2. A new section of the Severance Tax Bonding Act, Section 7-27-5.27 NMSA 1978, is enacted to read:

     "7-27-5.27. [NEW MATERIAL] INVESTMENT IN NEW MEXICO GREEN INDUSTRIES.--

          A. If in accordance with the Uniform Prudent Investor Act and if otherwise feasible, the state investment officer shall commit to investing no less than three-fourths percent of the market value of the severance tax permanent fund in New Mexico green industries pursuant to this section; provided that:

                (1) the total investment pursuant to this section shall not exceed two percent of the market value of the severance tax permanent fund; and

                (2) not more than fifteen million dollars ($15,000,000) of the amount authorized for investment pursuant to this section shall be invested in any one entity.

          B. The governor shall convene a task force of state and private officials with expertise in investments, alternative energy or the environment to investigate all applications for investments pursuant to this section and to certify the approved applications to the state investment officer.

          C. The state investment officer shall make investments pursuant to this section only upon approval of the state investment council after a review by the council. The state investment officer shall make debt or equity investments pursuant to this section only in a green industry that:

                (1) maintains its principal place of business or a manufacturing facility in New Mexico;

                (2) certifies that:

                     (a) the majority of its employees are New Mexico residents; or

                     (b) over fifty percent of its assets are located in New Mexico; and

                (3) agrees to increase its work force in New Mexico and its efforts to expand sales to New Mexico residents.

          D. As used in this section, "green industries" means industries that contribute directly to preserving or enhancing environmental quality by reducing waste and pollution or by producing sustainable products using sustainable processes and materials and that provide opportunities for advancement along a career track of increasing skills and wages. Green industries include:

                (1) energy system retrofits to increase energy efficiency and conservation;

                (2) production and distribution of biofuels and vehicle retrofits for biofuels;

                (3) building design and building construction that meet the equivalent of best available technology in energy and environmental design standards;

                (4) organic and community food production;

                (5) manufacture of products from nontoxic, environmentally certified or recycled materials;

                (6) manufacture and production of sustainable technologies, including, but not limited to, solar panels, wind turbines and fuel cells;

                (7) solar technology installation and maintenance;

                (8) recycling, green composting and large-scale reuse of construction and demolition materials and debris; and

                (9) water system retrofits to increase water efficiency and conservation."

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