New Mexico Administrative Code
Title 2 - PUBLIC FINANCE
Chapter 60 - INVESTMENT AND DEPOSIT OF PUBLIC FUNDS
Part 22 - REGULATIONS GOVERNING THE INVESTMENT OF THE SEVERANCE TAX PERMANENT FUND IN OIL AND GAS PARTICIPATIONS
Section 2.60.22.3 - STATUTORY AUTHORITY

A. Pursuant to Section 7-27-5.7 NMSA 1978 the severance tax permanent fund may be invested in notes, obligations and mortgages held by banks and savings and loan associations which represent loans by such financial institutions upon the production potential of new oil and gas wells that have been drilled in New Mexico when such investments are recommended by the oil and gas production assistance council. The principal amount of such notes, obligations or mortgages purchased in any twelve month period may not exceed fifty million dollars and the total aggregate amount of purchases outstanding at any one time shall not exceed three hundred million dollars or ten percent of the book value of the fund, which ever is less.

B. The state investment council is required under Section 7-27-5.7 NMSA 1978 Subsection B,C,E to adopt regulations to provide for the terms and conditions for participation in the investment, to set limits on fees to be charged by the state and lending institutions and to determine the effective yield on investments at or not more than one percent below market rate but in no case less than seven percent. The purpose of these regulations is to implement the legislation.