N.M. Admin. Code § 2.60.25.9
Current through Register Vol. 35, No. 23, December 10, 2024
Section 2.60.25.9 - PURPOSE OF THE FUNDSA. 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.N.M. Admin. Code § 2.60.25.9