New Mexico voters modernize Land Grant Permanent Fund investments

The voters of New Mexico have adopted changes to the state constitution to permit revision of the investment practices for the Land Grant Permanent Fund (LGPF) and the Severance Tax Permanent Fund.

The final step needed for the change to take effect is under way now as Congress moves on changes to New Mexico's enabling act. Commissioner of Public Lands Ray Powell, M.S., D.V.M., is a member of the State Investment Council, which oversees investments of the funds. The funds have a market value of nearly $7.7 billion, including more than $5.1 billion in the Land Grant Permanent Fund alone.

"This investment approach is tried and true and will give fresh meaning to the word 'permanent' in the term 'permanent fund,'" Powell said. The changes will protect the fund against inflation, permit more flexible investments in profitable companies, preserve the "prudent man" standard for investments and provide a more reliable, long-term revenue source to the beneficiaries.

The Land Grant Permanent Fund was established to support public education in New Mexico in perpetuity. These changes will help us make sure the funds retain their value over time," Powell said.

The Land Grant Permanent Fund represents assets of the land trust that are permanently severed. The proceeds from the investment of the fund help support 23 separate beneficiary institutions, primarily the state public school system.

New Mexico's voters overwhelmingly approved the constitutional amendment in the 1996 general election. The new program allows the State Investment Council to invest up to 65 percent of the fund in common stocks, and up to 10 percent in foreign stocks, eliminates the requirement that a stock pay dividends for 10 consecutive years, permits investment in NASDAQ listed stocks and allows a small percentage of the Severance Tax Permanent Fund to be used for venture capital.