SENATE JOINT MEMORIAL 59

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

INTRODUCED BY

Eric G. Griego

A JOINT MEMORIAL

REQUESTING THE NEW MEXICO LEGISLATIVE COUNCIL TO APPOINT AN EQUITABLE NEW MEXICO INVESTMENT TASK FORCE TO STUDY THE INVESTMENT POLICIES OF THE STATE INVESTMENT COUNCIL AND THE INVESTMENT OF THE PERMANENT FUNDS.

     WHEREAS, the recent collapse of Wall street demonstrates the inherent riskiness of even the safest of private-sector financial investments, let alone mortgage-backed securities, commercial paper, private equities, hedge funds and other speculative financial products; and

     WHEREAS, yields on government securities and the recent five-year performance of state investments have not kept pace with the rate of inflation and other cost-of-living measurements; and

     WHEREAS, the state and the nation are facing harsh economic circumstances that require the legislature to determine best practices for protecting the general welfare of its citizens who are the rightful owners of the permanent funds; and

     WHEREAS, the serious and ongoing nature of the current economic downturn and the inability of the financial products industry to deliver an adequate inflation-adjusted return on investment over the last five years means it may be more practical and equitable to invest in New Mexico than to risk continuing to lose permanent funds income in increasingly hazardous securities markets; and

     WHEREAS, a prudently managed state investment can, in fact, provide for both an adequate return on investment and the required distributions to beneficiaries by investing in nondiscretionary infrastructure here in New Mexico, such as municipal-scale energy, food and health care systems; and

      WHEREAS, the state investment officer, with the advice of the state investment council, is responsible for investing the state's permanent funds as well as other funds that have been statutorily assigned to the officer;

     NOW, THEREFORE, BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO that the New Mexico legislative council be requested to appoint an equitable New Mexico investment task force to study the investment policies of the state investment council and the investment of the permanent funds and to take a fresh look at alternative investment strategies that are focused on getting the most value for the citizens of New Mexico by investing a greater percentage of the permanent funds in the state; and

     BE IT FURTHER RESOLVED that the task force be composed of legislators; the state investment officer or the state investment officer's designee; the secretary of workforce solutions or the secretary's designee; the secretary of economic development or the secretary's designee; the director of the department of agriculture or the director's designee; the secretary of health or the secretary's designee; entrepreneurs; municipal, county, environmental and labor leaders; and other interested persons; and

     BE IT FURTHER RESOLVED that the task force focus on careful local investment strategies that recognize that the multiplier effect of local investment triples the economic benefit to citizens through the phenomenon known as "local dollar recycling"; and

     BE IT FURTHER RESOLVED that the task force take into account the equitability and net benefits to citizens of nondiscretionary infrastructure investment and identify optimal investments of such nondiscretionary infrastructure in communities around the state; and

     BE IT FURTHER RESOLVED that the task force study statutory and administrative changes necessary to facilitate investing the state's permanent funds in New Mexico; and

     BE IT FURTHER RESOLVED that a copy of this memorial be transmitted to the director of the legislative council service for delivery to the New Mexico legislative council.

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