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 SRC/SJC-SRC  DP-SJC
Senate Joint Resolution 9 (SJR 9) proposes to repeal the Anti-Donation Clause.
Senate Joint Resolution 9 (SRJ 9) proposes to amend Article 9, Section 14 of the New Mexico Constitution. This Article prohibits the state, local governments, and school districts from donating public funds to a person, association, or public or private corporation or to aid in railroad construction (Clause). There are very specific and limited exceptions. The Local Economic Development Act (LEDA) is one exception to the Clause. Under LEDA subsidies proposed by local governments must be adopted by ordinances. This gives the public the means to object to the actions through a transparent process. Other exceptions to the prohibitions on governmental donations, the most relevant of which include allowing government to: • make provision for the care and maintenance of sick and indigent persons; • exempt military veterans from paying tuition under specific circumstances; • loan money to students of the “healing arts” in exchange for contracting to practice within the state in designated areas for a period of years; • provide land, buildings or infrastructure for facilities to support new or expanding businesses in order to create new jobs, but only when authorized by specific legislation; and • make donations to assist in the creation of affordable housing, but only when authorized by specific legislation. However, public funding of college scholarships is a violation of the Clause. Other instances of violations include below-market rentals of public facilities to charitable and civic organizations. If the proposed amendment is put on the ballot, a special election for that purpose is allowed to be called. A simple majority vote of the statewide electorate is required to ratify an amendment.
Position: Neutral Priority: Moderate
Repealing the anti-donation clause is problematic and dangerous in some areas and needed in others. For example, making direct grants or payments to individuals or private sector entities from the general fund could easily be abused through political influence. By the same token, economic development efforts are hampered because of the clause. It should be noted that removal of the clause would open the doors for creation of a public bank and possibly other areas yet to be seen. A narrow interpretation of the constitution has served New Mexico well and amendments and repealing certain sections should be approached very cautiously.