New Mexico would revise investment and state fund rules

The proposal would direct many state funds to use the prudent investor rule and would set consultation, approval, reporting, and public-disclosure duties for investment officials and the investment council. The provisions cover funds managed or invested by the state investment officer or investment council, including higher education, workforce, early childhood, capital development, water, conservation, and other listed funds. The investment council would approve investments for several funds. Reports would go to legislative committees and, in some cases, would be posted online. Some funds would instead be administered by state agencies without investment by the state investment officer. These provisions would apply beginning July 1, 2026, if enacted.

The proposal would revise how money moves among state funds and how long certain appropriations or agency balances may remain available. The provisions cover the capital development program fund, tribal infrastructure project fund, rural libraries endowment fund, water trust fund, and state agency balances that revert to the general fund. Capital development money could support a full capital project or a usable project phase costing less than $25 million, and planning and design for larger projects costing more than $2 million. Tribal infrastructure fund money would remain subject to legislative appropriation for grants or loans. Annual distributions from the rural libraries and water trust funds would use stated percentages of recent fund values. Agency balances would revert by August 31, and the capital development fund would use the new project-end reversion rule, beginning July 1, 2026, if enacted.

The proposal would exclude specified reserve or settlement funds from some state-reserve calculations and emergency transfers, and would remove investment provisions from certain regulatory and vaccine funds. The provisions apply to the tax stabilization reserve, tobacco settlement permanent fund, state-support reserve fund, workforce and early-childhood trust funds, vaccine purchasing fund, mortgage regulatory fund, and money services regulatory fund. Emergency transfers would be allowed only when other listed general fund reserves cannot cover authorized appropriations. Any emergency transfer would be limited to the amount needed to meet those appropriations. Money in the vaccine, mortgage, and money services funds would remain subject to their governing program or legislative spending rules. The proposed rules would take effect July 1, 2026, if enacted; annual fund distributions and fiscal-year calculations would continue on the dates stated in the affected sections.

The proposal would repeal Section 6-8-6 and would replace older references to constitutional investment limits or land-grant investment practices with references to the Uniform Prudent Investor Act in several sections. The repeal concerns Chapter 6, Article 8, while the related wording appears in provisions governing state-managed funds and investment responsibilities. The proposal would not itself authorize spending from funds where another section requires an appropriation. The introduced text would take effect only if the measure is enacted. The repeal and related provisions would take effect July 1, 2026, under the introduced text.