SENATE BILL 60

51st legislature - STATE OF NEW MEXICO - second session, 2014

INTRODUCED BY

Timothy M. Keller and Carl Trujillo

AN ACT

RELATING TO HIGHER EDUCATION; AMENDING A SECTION OF CHAPTER 21 NMSA 1978 TO PROVIDE FOR EQUITY INVESTMENTS OF EDUCATIONAL INSTITUTIONS' ENDOWMENT FUNDS FOR ECONOMIC DEVELOPMENT IN NEW MEXICO.

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

     SECTION 1. Section 21-1-38 NMSA 1978 (being Laws 1991, Chapter 69, Section 1, as amended) is amended to read:

     "21-1-38. [DEFINITION] DEFINITIONS--REQUIREMENTS FOR ADOPTION OF INVESTMENT POLICY FOR INVESTING ENDOWMENT FUNDS.--

          A. As used in this section:

                (1) "endowment funds" means funds:

                     (a) acquired by gift by an educational institution with respect to which the donors or other outside agencies have stipulated as a condition of the gift, and the stipulation is expressed specifically in the gift instrument, that the principal is to be maintained and invested for the purpose of producing current and future income that may either be added to the principal or expended, and the maintenance of the principal may be either: 1) held in perpetuity; or 2) expended after the passage of a stated period of time or upon the happening of a specified event; and

                     (b) notwithstanding the source of acquisition, that the governing board of the educational institution has determined and has designated by a written instrument, either revocable or irrevocable, to be retained for long-term investment; and

                (2) "educational institution" means an educational institution designated in Article 12, Section 11 of the constitution of New Mexico and any post-secondary educational institution, which term includes an academic, vocational, technical, business, professional or other school, college or university or other organization or person offering or purporting to offer courses, instruction, training or education through correspondence or in person to any individual within this state over the compulsory school attendance age, if that post-secondary educational institution is directly supported in whole or in part by state or local taxation.

          B. The board of finance, as that term is defined in Section 6-10-9 NMSA 1978, for each of the educational institutions:

                (1) shall adopt regulations governing the investment and distribution of endowment funds by the institution's board of finance, which regulations shall provide at least for:

                     (a) the application of the standard of loyalty described in Section 45-7-606 NMSA 1978 and the Uniform Prudent Management of Institutional Funds Act;

                     (b) the appointment of an investment advisory committee made up of individuals having demonstrated experience and skill in the field of the investment of endowment funds; and

                     (c) the development of a comprehensive investment policy for the investment of endowment funds by the institution, with the advice and upon the recommendation of the investment committee, including equity investments for economic development in New Mexico pursuant to Subsection D of Section 14 of Article 9 of the constitution of New Mexico; and

                (2) may employ an institutional endowment funds investment manager and delegate to the manager the power to make purchases, sales, exchanges, investments and reinvestments of endowment funds."

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