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Bill to Help State Permanent Funds Clears Senate

Joint Resolution would let voters decide whether to modernize investment limits

With bipartisan support, the Senate passed legislation Saturday that, if voters approve, will allow state investors to take greater advantage of a burgeoning global economy, which throughout the last decade has proven to outperform current investment strategies required by law.

Senate Joint Resolution 4 (SJR4) seeks to let voters decide whether to amend the state constitution to remove the current 15 percent cap on what can be invested on international securities. Since the cap on foreign investment was put into place in 1992, the global economy has grown tremendously and New Mexican investments did not perform as well as they would have if not limited by the cap.

“The current investment provision is costing New Mexico hundreds of millions of dollars a year,” said Sen. Tim Keller (D-17, Bernalillo), who co-sponsored the joint resolution, along with Representative Larry A. Larranaga (R-27, Bernalillo). “This amendment is critical to supporting our state educational endowment.”

According to an analysis by the Legislative Education Study Committee, lifting the international-investment cap would increase in the state’s returns, based on global-investment performance during the last decade. In 1995, the Legislature adopted theUniform Prudent Investor Act, but the pertinent sections of the state constitution has not yet been amended. SJR 4 proposes to make both provisions in the law consistent.