Tax Stabilization Reserve

Governor Michelle Lujan Grisham signed House Bill 393 on April 2, 2019. HB 393 transfered oversight and investment management of the general fund Tax Stabilization Reserve (also known as the state’s “rainy day fund”) from the State Treasurer’s Office to the State Investment Council, as of 7/1/2019. The Council invests the TSR in a conservative, highly-liquid fashion in accordance with the Uniform Prudent Investor Act. By law the SIC can invest in more-diverse & longer-horizon strategies than the State Treasurer, and the TSR targets long-term annual returns between 4-5%. Investment gains are reinvested into the fund, which will also grow from specified oil and gas revenues collected by the state during years of above-average production. The TSR helps the state better cope with fiscal challenges during times of economic distress, and also improves the state’s credit rating.