0001| A JOINT RESOLUTION | 0002| PROPOSING AMENDMENTS TO ARTICLE 8, SECTION 10 AND ARTICLE 12, | 0003| SECTIONS 2, 4 AND 7 OF THE CONSTITUTION OF NEW MEXICO TO PROTECT THE | 0004| STATE'S PERMANENT FUNDS AGAINST INFLATION BY LIMITING DISTRIBUTIONS | 0005| TO A PERCENTAGE OF EACH FUND'S MARKET VALUE AND BY MODIFYING | 0006| CERTAIN INVESTMENT RESTRICTIONS TO ALLOW OPTIMAL DIVERSIFICATION OF | 0007| INVESTMENTS. | 0008| | 0009| BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0010| Section 1. It is proposed to amend Article 8, Section 10 of the constitution of New | 0011| Mexico to read: | 0012| "A. There shall be deposited in a permanent trust fund known as the "severance | 0013| tax permanent fund" that part of state revenue derived from excise taxes that have been or shall | 0014| be designated severance taxes imposed upon the severance of natural resources within this state, | 0015| in excess of | 0016| that amount that has been or shall be reserved by statute for the payment of principal and interest | 0017| on outstanding bonds to which severance tax revenue has been or shall be pledged. Money in | 0018| the severance tax permanent fund shall be invested as provided by law. Distributions from the | 0019| fund shall be appropriated by the legislature as other general operating revenue is appropriated | 0020| for the benefit of the people of the state. | 0021| B. All additions to the fund and all earnings, including interest, dividends and | 0022| capital gains from investment of the fund shall be credited to the corpus of the fund. | 0023| C. The annual distributions from the fund shall be one hundred two percent of | 0024| the amount distributed in the immediately preceding fiscal year until the annual distributions | 0025| equal four and seven-tenths percent of the average of the year-end market values of the fund for | 0001| the immediately preceding five calendar years. Thereafter, the amount of the annual | 0002| distributions shall be four and seven-tenths percent of the average of the year-end market values | 0003| of the fund for the immediately preceding five calendar years. | 0004| D. The frequency and the time of the distributions made pursuant to Subsection | 0005| C of this section shall be as provided by law." | 0006| Section 2. It is proposed to amend Article 12, Section 2 of the constitution of New | 0007| Mexico to read: | 0008| "The permanent school fund of the state shall consist of the proceeds of sales of Sections | 0009| Two, Sixteen, Thirty-Two and Thirty-Six in each township of the state, or the lands selected in | 0010| lieu thereof; the proceeds of sales of all lands that have been or may hereafter be granted to the | 0011| state not otherwise appropriated by the terms and conditions of the grant; such portion of the | 0012| proceeds of sales of land of the United States within the state as has been or may be granted by | 0013| congress; all earnings, including interest, dividends and capital gains from investment of the | 0014| permanent school fund; also all other grants, gifts and devises made to the state, the purpose of | 0015| which is not otherwise specified." | 0016| Section 3. It is proposed to amend Article 12, Section 4 of the constitution of New | 0017| Mexico to read: | 0018| "All forfeitures, unless otherwise provided by law, and all fines collected under general | 0019| laws; the net proceeds of property that may come to the state by escheat; the rentals of all school | 0020| lands and other lands granted to the state, the disposition of which is not otherwise provided for | 0021| by the terms of the grant or by act of congress shall constitute the current school fund of the | 0022| state." | 0023| Section 4. It is proposed to amend Article 12, Section 7 of the constitution of New | 0024| Mexico to read: | 0025| "A. As used in this section, "fund" means the permanent school fund described in | 0001| Section 2 of this article and all other permanent funds derived from lands granted or confirmed | 0002| to the state by the act of congress of June 20, 1910, entitled "An act to enable the people of New | 0003| Mexico to form a constitution and state government and be admitted into the union on an equal | 0004| footing with the original states. | 0005| B. The fund shall be invested by the state investment officer in accordance with | 0006| policy regulations promulgated by the state investment council. | 0007| C. In making investments, the state investment officer, under the supervision of | 0008| the state investment council, shall exercise the judgment and care under the circumstances then | 0009| prevailing that businessmen of ordinary prudence, discretion and intelligence exercise in the | 0010| management of their own affairs not in regard to speculation but in regard to the permanent | 0011| disposition of their funds, | 0012| considering the probable income as well as the probable safety of their capital. | 0013| D. The legislature may establish criteria for investing the fund if the criteria are | 0014| enacted by a three-fourths vote of the members elected to each house, but investment of the fund | 0015| is subject to the following restrictions: | 0016| (1) not more than sixty-five percent of the book value of the fund shall be | 0017| invested at any given time in corporate stocks; | 0018| (2) not more than ten percent of the voting stock of a corporation shall be | 0019| held; | 0020| (3) stocks eligible for purchase shall be restricted to those stocks of | 0021| businesses listed upon a national stock exchange or included in a nationally recognized list of | 0022| stocks; and | 0023| (4) not more than fifteen percent of the book value of the fund may be | 0024| invested in international securities at any single time. | 0025| E. All additions to the fund and all earnings, including interest, dividends and | 0001| capital gains from investment of the fund shall be credited to the fund. | 0002| F. The annual distributions from the fund shall be | 0003| one hundred two percent of the amount distributed in the immediately preceding fiscal year until | 0004| the annual distributions equal four and seven-tenths percent of the average of the year-end | 0005| market values of the fund for the immediately preceding five calendar years. Thereafter, the | 0006| amount of the annual distributions shall be four and seven-tenths percent of the average of the | 0007| year-end market values of the fund for the immediately preceding five calendar years." | 0008| Section 5. The amendments proposed by this resolution shall be submitted to the people | 0009| for their approval or rejection at the next general election or at any special election prior to that | 0010| date which may be called for that purpose. | 0011| Section 6. The amendments proposed by Sections 2, 3 and 4 of this resolution | 0012| shall not become effective without the consent of the United States congress. | 0013| | 0014| |