Current through Register Vol. 35, No. 18, September 24, 2024
A.
Permanent fund: The purpose of the permanent fundis to hold in trust royalties
and other funds received from state lands and to make distributions of income
earned on these funds to the common schools and other designated institutions
of the state. Since the fund is considered to be a common trust, it is invested
in accordance with the prudent man rule and fiduciary law. The state investment
council, as a fiduciary, has a duty to act solely in the interest of the fund's
beneficiaries. A steady stream of income that maintains its value in real
(inflation adjusted) dollars must be provided for the beneficiary institutions,
while the real value of the corpus must be maintained for future generations
who will need the fund's income to support these institutions.
B. Severance tax permanent fund:
(1) The purpose of the state of New Mexico
severance tax permanent fund is to hold in trust that part of state revenues
derived from excise taxes which have been or shall be designated severance
taxes imposed upon the severance of natural resources within the state, in
excess of that amount which has been or shall be reserved by statute for the
payment of principal and interest on outstanding bonds to which severance tax
revenue has been or shall be pledged, and to make distributions of the income
earned on these funds to the general fund. Since the fund is a permanent trust
fund, it shall be invested in accordance with the prudent man rule with the
state investment officer and council acting as fiduciaries.
(2) The state investment council, as a
fiduciary, has the responsibility and authority to establish policies for the
investment of the severance tax permanent fund. The objective of the market
rate portfolio in the severance tax permanent fund is to provide a steady
stream of income that maintains its value in real (inflation adjusted) dollars,
while maintaining the real value of the corpus for future generations. The
objective of the differential rate portfolio in the severance tax permanent
fund is to stimulate the economy of New Mexico on a continuing basis by
maintaining a diversified portfolio of New Mexico investments, which expands
business activity, promotes the creation and preservation of jobs, and provides
a reasonable yield, as intended by the differential rate statutes.
