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New Mexico Land Grant Fund Investments, Amendment 5 (2014)

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Amendment 5
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Constitution:Constitutional amendment
Referred by:New Mexico Legislature
Topic:State and local government budgets, spending and finance on the ballot
Status:Approved Approveda
2014 measures
Seal of New Mexico.gif
November 4
Amendment 1 Defeatedd
Amendment 2 Approveda
Amendment 3 Approveda
Amendment 4 Approveda
Amendment 5 Approveda
Bond Question A Approveda
Bond Question B Approveda
Bond Question C Approveda
Local measures

The New Mexico Land Grant Fund Investments, Amendment 5 was on the November 4, 2014 ballot in New Mexico as a legislatively-referred constitutional amendment, where it was approved. The measure affected the Land Grant Permanent Fund. Specifically, the amendment was designed to do three things:[1]

  • Allow more than 15 percent of the fund to be invested in international securities.
  • Provide for the investment and management of the fund in accordance with the Uniform Prudent Investor Act.
  • Raise the reserve required to be maintained in the fund from $5.8 billion to $10 billion.

The proposed amendment was sponsored in the New Mexico Legislature by Rep. Antonio Maestas (D-16) and Sen. Tim Keller (D-17) as House Joint Resolution 16.[2]

Election results

Below are the official, certified election results:

New Mexico Amendment 5
Approveda Yes 186,710 52.20%

Election results via: New Mexico Secretary of State

Text of measure

Constitutional changes

See also: Article XII, New Mexico Constitution

The measure amended Section 7 of Article XII of the Constitution of New Mexico.[1]

The amendment’s full text can be read here.



  • Greater Albuquerque Chamber of Commerce[3]
  • Chartered Financial Analyst Society of New Mexico


The New Mexico Legislative Council Service provided arguments for and against the constitutional amendment. The following were the council's arguments in support:

1. Balances short-term risk and long-term gain.

The amendment would update investment standards to match best practices, placing an emphasis on diversifying investment of the Land Grant Permanent Fund. Diversification balances risks so that short-term swings in the market have less impact on an investment fund as a whole. Moreover, the newer standards would allow the State Investment Council to make some longer- term investments that are projected to give a high rate of return even if they are expected to have short-term fluctuations. This type of investment would help counterbalance inflation pressures on the Land Grant Permanent Fund.

2. Provides necessary portfolio diversification.

Removing the limitation on foreign investment provides a tool to the State Investment Council that has been promoted as necessary to diversify investment portfolios and to earn higher returns on the investments.

3. Foreign investment component reflects modern business market.

Since several large corporations operate and profit on a global basis, such as some soft drink manufacturers, fast food chains, computer hardware producers and financial service providers, arguably there is already a "foreign investment" component to many stocks listed on such domestic exchanges as the Dow Jones Industrial Average and the NASDAQ Stock Market.

4. Contains an additional safety measure.

Raising the minimum reserve requirement for additional disbursements from the Land Grant Permanent Fund to $10 billion through fiscal year 2016 establishes a safety measure to insulate the fund in the short term while the State Investment Council explores greater diversity for investments from the fund. [4]

—New Mexico Legislative Council Service[1]

Other arguments in support of the amendment included:

  • State Investment Council member Harold Lavender said, "This would remove a constitutional cap on foreign equity investments that have worked to our disadvantage over the last several years. It has cost us money."[3]



The New Mexico Legislative Council Service provided arguments for and against the constitutional amendment. The following were the council's arguments against:

1. Encourages risky investments.

Eliminating the 15 percent cap on foreign investments and adding the UPIA standard effectively encourages the State Investment Council to maximize returns at the risk of additional investment volatility. Such actions could jeopardize the value of the trust funds.

2. Foreign markets less stable than U.S. market.

Many U.S. investors are cautious about making significant investments in foreign markets due to concerns about volatile political situations, insecure financial structures or a lack of business diversification in many countries. Currently and historically, the U.S. financial market, despite the inevitable recessions and market corrections, is the most stable market in the world.

3. Might erode fund value.

As averaged over the past 25 years, the Land Grant Permanent Fund has earned an annual return on investment of 8.65 percent under current law — a more than respectable long-term rate of return. Changing the investment standards, and in particular removing the cap on foreign investments, could inject more volatility and risk and erode the value of the Land Grant Permanent Fund. [4]

—New Mexico Legislative Council Service[1]

Path to the ballot

See also: Amending the New Mexico Constitution

According to Article XIX of the New Mexico Constitution, a simple majority was required in the legislature to refer the amendment to the ballot. HJR 16 was approved in the New Mexico House and New Mexico Senate on February 20, 2014.[5][6]

House vote

February 20, 2014 House vote

New Mexico HJR 16 House Vote
Approveda Yes 65 100.00%

Senate vote

February 20, 2014 Senate vote

New Mexico HJR 16 Senate Vote
Approveda Yes 37 88.10%

See also

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External links