The Enabling Act of 1910 and the Ferguson Act granted certain lands held by the federal government to the territory of New Mexico. Under the terms of these land grants, it was stipulated that such lands, totaling 13.4 million acres, were to be held in trust for the benefit of the public schools and other specific beneficiary institutions. The Land Commissioner is charged with generating and maximizing revenue from state trust lands to support public education and other beneficiary institutions, while simultaneously striving to protect, conserve, and maintain the lands so they may be used by future generations. The Land Commissioner generates revenues by leasing lands for grazing, agriculture, commercial use, oil and gas drilling, mining, and other surface and subsurface activities.

New Mexicans are fortunate that much of state trust land lies within the oil-rich Permian Basin and the gas-rich San Juan Basin. As a result, most trust land revenue has been generated through royalties on the production of oil and gas. Because this revenue --as well as the revenue from the sale of trust land and other mineral production royalties-- represents a depletion of the trusts assets, it is set aside by federal law and the state Constitution in the Land Grant Permanent Fund. The corpus of the fund is maintained in perpetuity for future generation of New Mexicans, while the revenue it generates from interest and investments flows to public schools and other institutions.