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 [46-9A-1 to 46-9A-10 NMSA 1978];

(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; 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.

History: Laws 1991, ch. 69, § 1; 1997, ch. 199, § 13; 2011, ch. 44, § 2.

The 2011 amendment, effective June 17, 2011, in Subsection A, eliminated the requirement that the conditions of a gift stipulate that principal will be held inviolate; and in Subsection B, required the board of finance to adopt regulations regarding the distribution of funds that apply the standard of loyalty described in Section 45-7-606 NMSA 1978.

The 1997 amendment, effective July 1, 1997, substituted "standard of conduct described in Section 6-8-10 NMSA 1978 and the Uniform Management of Institutional Funds Act" for "standard described in Section 6-8-10 NMSA 1978" in Subparagraph B(1)(a) and made minor stylistic changes in Subsection A.