New mexico's land grant and severance tax permanent funds: Renewable wealth from non-renewable resources

Natural Resources Journal

Volumn 48, Issue 3, 2008, Pages 719-743

  Williams, Amy ^a  

^a UNIVERSITY OF NEW MEXICO   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EDUCATION; FINANCIAL PROVISION; NONRENEWABLE RESOURCE; TAX SYSTEM;

CANADA; NEW MEXICO; NORTH AMERICA; UNITED STATES;

EID: 69949103965     PISSN: 00280739     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (166)

1. Joy Waldron, Psssst! The Country's Third Largest Endowment Belongs to New Mexico, N.M. BUS. J., Mar. 1996, at 9.
2. Fund Bonanza, N.M. BUS. J., Nov. 2000, at 7.
3. N.M. STATEINV. COUNCIL, 2006 ANNUAL REPORT 5(2006), available at http://www.sic.state.nm.us/PDF%20files/NMSIC2006AR.pdf [hereinafter N.M. STATE INV. COUNCIL, ANNUAL REPORT].
4. N.M. ENERGY, MIN. & NAT. RES. DEPT., 2006 ANNUAL REPORT 34, tbl. A (2006), available at http://www.emnrd.state.nm.us/Main/documents/EMNRD2006-008. pdf.
5. Id.
6. Id. at 54.
7. Id.
8. The NMSIC also manages the Tobacco Settlement Permanent Fund, which was established in 2000 using the proceeds from a settlement between several states and tobacco companies. The three funds are pooled and invested collectively, with the exception of investments made in New Mexico's film industry directly from the Severance Tax Permanent Fund. See State Inv. Council, http://www.sic.state.nm.us/ (last visited Mar. 12, 2009).
9. N.M. STATE INV. COUNCIL, ANNUAL REPORT, supra note 3, at iv.
10. Id. at ii.
11. Act of June 21, 1898, ch. 489, § 1, 30 Stat. 484, 484; Act of June 20, 1910, ch. 310, § 9, 36 Stat. 557, 563;
12. N.M. STATE INV. COUNCIL ANNUAL REPORT, supra note 3, at 2
13. Press Release, N.M. State Land Office, Land Office Collects Record Revenues for Fiscal Year 2006 (Sept. 15, 2006), avmlable at http://www. nmstatelands.org/uploads/News/2006/2006-0915PAYOUT.pdf.
14. See N.M. STATE INV. COUNCIL, ANNUAL REPORT, supra note 3, at 8.
15. See generally ROGNVALDUR HANNESSON, INVESTING FOR SUSTAINABILTTY: THE MANAGEMENT OF MINERAL WEALTH 65 (2001).
16. See Ben Neary, Opponents Proud of Close Amendment 2 Race, SANTA FE NEW MEXICAN, Sept. 24, 2003, at A7.
17. HANNESSON, supra note 14, at 74.
18. See N.M. STATE INV. COUNCIL, 2005 ANNUAL REPORT 2 (2005), available at http://www.sic.state.nm.us/PDF%20files/SIC-Ann-report-05.pdf.
19. Act of June 21, 1898, ch. 489, § 1, 30 Stat. 484, 484;
20. Act of June 20, 1910, ch. 310, § 9, 36 Stat. 557, 563.
21. Act of June 20, 1910, ch. 310, § 9, 36 Stat. 557, 563.
22. Act of Jan. 25, 1927, ch. 57, 44 Stat. 1026 (codified at 43 U.S.C. §§ 870-871 (2000)).
23. N.M. CONST, art. XII, § 2.
24. Id.
25. N.M. STATE INV. COUNCIL, ANNUAL REPORT, supra note 3, at 4.
26. N.M. CONST, art. XII,§ 7.
27. See N.M. STAT. § 7-27-32 (2006).
28. Id. § 7-29-34
29. See id. § 7-26-2 to -3.
30. Id. § 7-29-31
31. Id. § 7-27-27
32. N.M. CONST, art. VII, § 10.
33. 1973 N.M. Laws 1300.
34. Id.; N.M. CONST, art. VIII, § 10.
35. See N.M. ENERGY, MIN. & NAT. RES. DEPT., 2006 ANNUAL REPORT, supra note 4, at 56, fig-1.
36. Id. at 34, tbl. A.
37. See N.M. STATE INV. COUNCIL, ANNUAL REPORT, supra note 3, at 4.
38. State Inv. Council, supra note 8.
39. N.M. STAT. § 6-8-12 (1978).
40. Id. § 6-8-14.
41. Id. § 6-8-17 The Uniform Prudent Investor Act provides that a trustee of a trust owes a duty of loyalty and impartiality to the beneficiaries of a trust and will not incur unreasonable expense in managing and investing trust assets. Uniform Prudent Investor Act, N.M. STAT. § 45-7-601 to -612 (1978).
42. N.M. STATE INV. COUNCIL, ANNUAL REPORT, supra note 3, at 4-5.
43. N.M. STATE INV. COUNCIL, ANNUAL REPORT, supra note 3, at 11-14.
44. See DANIEL JAY BAUM & NED B. STILES, THE SILENT PARTNERS: INSTTTUTIONAL INVESTORS AND CORPORATE CONTROL 34 (1965).
45. Id.
46. N.M. STATE INV. COUNCIL, ANNUAL REPORT, supra note 3, at 14-15.
47. Jim McWhinney, Introduction to Diversification, INVESTOPEDIA, http://www.investopedia.com/articles/basics/05/diversification.asp (last visited Mar. 20, 2009).
48. Id.
49. DAVEKANSAS, THE WALL STREET JOURNAL COMPLETE MONEY&INVESTING GUIDEBOOK 80 (2005).
50. See generally id. (discussing different diversification and investment strategies).
51. N.M. STAT. § 6-8-17 (1978).
52. Id. § 45-7-603.
53. Id.
54. Id. § 7-27-5.4.
55. See N.M. STATE INV. COUNCIL, ANNUAL REPORT, supra note 3, at ii.
56. KANSAS, supra note 47, at 19.
57. N.M. STATE INV. COUNCIL, ANNUAL REPORT, supra note 3, at 20-22.
58. When referring to the following charts, one should keep in mind that it includes the investments made through the Tobacco Settlement Fund, which is not otherwise considered in this article.
59. N.M. STATE INV. COUNCIL, ANNUAL REPORT, supra note 3, at 25.
60. Lehman Brothers, Global Family of Indices, http://www.lehman.com/fi/ indices/(last visited Mar. 9, 2009)
61. This fund provides start up funds for new businesses and expansion or turn around of existing businesses. N.M. STATE INV. COUNCIL, ANNUAL REPORT, supra note 3, at 11.
62. NMSIC is authorized by the New Mexico State Legislature to make direct coinvestments in New Mexico companies, including such companies as Advent Solar and Eclipse Aviation. N.M. STATE INV. COUNCIL, ANNUAL REPORT, supra note 3, at 13.
63. This investment class is comprised of certificates of deposit in New Mexico financial institutions, New Mexico Mortgage Finance Authority Bonds, Small Business Administration, and Farm and Home Administration Guarantees. Id.
64. NMSIC is authorized to invest a certain amount in film projects that are primarily produced within the state of New Mexico. Id. This investment strategy is discussed further later, infra at 12.
65. N.M. STATE INV. COUNCIL, ANNUAL REPORT, supra note 3, at 11-14.
66. Id. at 8.
67. Id.
68. Id. at 13.
69. For current information on New Mexico's film investment program see State Inv. Council, New Mexico Film Investments, http://www.sic.state.nm.us/film.htm (last visited Mar. 21, 2009).
70. Id.
71. N.M. STATE FILM OFFICE & STATE INV. COUNCIL, ECONOMIC AND FISCAL IMPACTS OF THE NEW MEXICO FILM PRODUCTION TAX CREDIT (2009), http://www.sic.state.nm.us/PDF%20fUes/NM-Film-Credit-Impact-Analysis.Final.pdf (last visited Mar. 20, 2009).
72. S. 519, 48th Leg., 2d Sess. (N.M. 2008), available at http://www.nmlegis.gov/lcs/-session.aspx?chamber=S&legtype=B&legno= %20519&year=08.
73. Dan Mayfield, Bill Would Cap Film Credit, ALBUQUERQUE J., Feb. 1, 2008, at A8.
74. SAVE DARFUR COALITION, THE PROBLEM: HOW YOUR TAX DOLLARS ARE FUNDING GENOCIDE, available at http://darfur.3cdn.net/c7ce06aa382382276a-i8m6bedz9.pdf.
75. Press Release, Genocide Intervention Network, New Mexico to Divest from Sudan (Nov. 9, 2007), available at http://sudandivestment.org/docs/new-mexico- pr.pdf.
76. Dave Maass, Khartoum Strip, SANTA FE REP., Oct. 31, 2007.
77. N.M. STAT. § 7-27-3.3 (2006).
78. Robert Desiderio, New Mexico Taxes Takaing Another Look 32 N.M.L. REV. 351, 366-367 (2002).
79. N.M. STATE INV. COUNCIL, ANNUAL REPORT, supra note 3 at 8.
80. Id.
81. Editorial, Give Bill Hearty 'Yes' to Education Reform, SANTA FE NEW MEXICAN, Sept. 21, 2003, at F6.
82. Id.; Neary, supra note 15.
83. Editorial, supra note 79.
84. Id.
85. Am. Fed'n of Teachers, Amendments 1 St 2 Primer, available at http://nm.aft.org.
86. Editorial, supra note 79.
87. Editorial, No. 2 Still a Cliffhanger, Shouldn 't Have Been, SANTA FE NEW MEXICAN, Sept. 25, 2003, at A-7.
88. N.M. STATE INV. COUNCIL, ANNUAL REPORT, supra note 3, at 8.
89. Id.
90. Id.
91. Id.
92. Press Release, New Mexico State Land Office, Land Office Collects Record Revenues for Fiscal Year 2006 (Sept. 15, 2006) (on file with the author).
93. Press Release, New Mexico State Land Office, Johnson Joins Lyons in Opposition to Permanent Fund Raid (Aug. 8, 2003) (on file with the author), available at http://www.nmstetelands.org/uploads/News/2003/2003-08084- johnsonlpgf.pdf.
94. Norway Mission to the EU, Economic and Monetary Policy, http://www.eunorway.org/policyareas/economy+monetary/ (last visited Mar. 9, 2009).
95. Norges Bank Inv. Mgmt., Government Pension Fund, http://www.norgesbank. no/templates/article-69365.aspx (last visited Mar. 21, 2009).
96. HANNESSON, supra note 14, at 80.
97. Press Release, supra note 91.
98. Norges Bank Inv. Mgmt., http://www.norges-bank-no/templates/article- 41394.aspx (last visited Mar. 20, 2009).
99. Id.
100. Norges Bank Inv. Mgmt, http://www.norges-bank.no/templates/article-42086. aspx (last visited March 20, 2009). All currency conversions were calculated using interbank rates.
101. Wikidpedia, The Government Pension Fund of Norway, http://en.wikipedia. org/wiki/The-Petroleum-Fund-of-Norway (last visited Mar. 9, 2009).
102. NORGES BANK INV. MGMT., 2006 ANNUAL REPORT, available at http://www.norgesbank.no/templates/report-65332.aspx [hereinafter NBIM ANNUAL REPORT].
103. Norges Bank Inv. Mgmt., Government Pension Fund-Global, Key Figures 2006, http://www.norges-bank.no/Pages/Report-65333.aspx.
104. The Government Pension Fund of Norway, supra note 99.
105. Id.
106. NBIM ANNUAL REPORT, supra note 100.
107. HANNESSON, supra note 14, at 82.
108. Id.
109. Id. at 85.
110. The Government Pension Fund of Norway, supra note 99.
111. THOR ENGLUND, THE NORWEGIAN MINISTRY OF FOREIGN AFFAIRS, SAVING THE NORWEGIAN OIL WEALTH FOR FUTURE GENERATIONS, http://www.norway.org.au/policy/ pensionfund.html (last visited Mar. 14, 2009).
112. HANNESSON, supra note 14, at 83.
113. ALASKA CONST, art. IX, § 5.
114. SCOTT GOLDSMITH, THE ALASKA PERMANENT FUND DIVIDEND: AN EXPERIMENT IN WEALTH DISTRIBUTION 3 (2003).
115. Alaska Oil and Gas Association, Industry Overview, http://www.aoga.org/ industry.html (last visited Mar. 9, 2009).
116. Id.
117. GOLDSMITH, supra note 112, at 3.
118. Alaska Permanent Fund Corporation, What is the Alaska Permanent Fund? http://www.apfc.org/home/Content/permFund/aboutPermFund.cfm (last visited Mar. 9, 2009).
119. ALASKA PERMANENT FUND CORP., 2006 ANNUAL REPORT 4 (2006) available at http://www.apfc.org/-amiReportsArchive/2006-ANNRPT.pdf.
120. Id.
121. Id. at 17.
122. Id. at 5.
123. Id.
124. See Zobel v. Williams, 457 U.S. 55 (1982).
125. AS 43.23.005.
126. GOLDSMITH, supra note 112, at 6.
127. Id. at 7.
128. Id.
129. Id.
130. STATE OF ALASKA DEP'T OF REVENUE, PERMANENT FUND DIVIDEND DIVISION 2007 ANNUAL REPORT 5 (2007), available at http://www.pfd.stete.ak.us/forms/ AnnualReports/2007AnnualReport.pdf.
131. GOLDSMITH, supra note 112, at 8.
132. Id.
133. ALBERTA HERITAGE SAVINGS TRUST FUND 2006 ANNUAL REPORT 3 (2006), available at http://www.finance.alberte.ca/business/ahstf/annrep06/report.pdf [hereinafter ALBERTA TRUST FUND 2006 ANNUAL REPORT].
134. Id.
135. Alberta Heritage Savings Trust Fund Act, R.S.A., ch. A-23 (2007) (Can).
136. HANNESSON, supra note 14, at 71.
137. Id. at 76.
138. Id. at 72.
139. Id. at 73.
140. Please note that in this section, the author is referring to Canadian, rather than U.S. dollars. In 2006, one U.S. dollar purchased $1.17 Canadian dollars. The amount in parentheses represents the conversion from Canadian to US. dollars. ALBERTA TRUST FUND 2006 ANNUAL REPORT supra note 131, at 6.
141. HANNESSON, supra note 14, at 74, 77.
142. ALBERTA TRUST FUND 2006 ANNUAL REPORT, supra note 131, at 2.
143. Id. at 3.
144. Id.
145. Id. at 7.
146. Id. at 2.
147. ALLAN A. WARRACK & RUSSELL R. KEDDIE, ALBERTA HERITAGE FUND vs. ALASKA PERMANENT FUND: A COMPARATIVE ANALYSIS 4 (2007).
148. Id.
149. HANNESSON, supra note 14, at 78.
150. WVGES Geology: History of West Virginia Coal Industry, http://www.wvgs.wvnetedu/www/geology/geoldvco.htm (last visited Mar. 9, 2009).
151. W. VA. FY 2008-2009 EXEC BUDGET 216 (2008).
152. TAX COMM'R OF W. VA., FORTY-SEVENTH BIENNIAL REP. 18 (2006).
153. Id. at 18-19.
154. Id. at 20.
155. E-mail from Mark Muchow, Deputy Secretary, West Virginia Department of Revenue, to Amy Williams (Dec. 3, 2007, 08:26 MST) (on file with the author).
156. Id.
157. W.VA. 2006 COMPREHENSIVE ANNUAL FINANCIAL REPORT 29, available at http://www.wvfinance.stete.wv.us/cafr06.htm.
158. West Virginia Coal Association, Severance Tax, http://www.wvcoal.com/ index.php?option=com-content&rtask=view&id=35&ritemid=42 (last visited Mar. 9, 2009).
159. JEFF GOODELL, BIG COAL: THE DIRTY SECRET BEHIND AMERICA'S ENERGY FUTURE 36 (2006).
160. Id. at 30-31.
161. Id. at 34.
162. Wikipedia, Economy of West Virginia, http://en.wikipedia.org/wiki/ Economy-of-West-Virginia (last visited Mar. 9, 2009).
163. GOODELL, supra note 157, at 35.
164. Id.; Southern West Virginia Prepares for a Future Without Coal, CENT. N.Y. BUS. J., Dec. 14, 1998.
165. Southern West Virginia Prepares for a Future Without Coal, supra note 162.
166. New Mexico Lottery, Legislative Lottery Scholarships, http://www-nmlottery.com/scholarships.htm (last visited Mar. 9, 2009).