Arguments For and Against Proposed Constitutional Amendment 3
2012
Arguments For - Aligns With Other States - Most States Assign Duty To Charter Corporations To Secretary Of State:
It makes perfect sense to designate the responsibilities of chartering corporations to New Mexico's Office of the Secretary of State because that is how most states handle such responsibilities. In fact, the National Conference of State Legislatures reports that 41 of the 50 states provide for the chartering of corporations by their respective offices of the secretary of state. Businesses are used to dealing with corporate charters through each state's secretary of state, so for ease of use, it makes sense to align New Mexico's governmental practices with those of other states, particularly in areas of business. Likewise, individuals seeking information about chartering a corporation do not typically know to contact a regulatory agency like the PRC, which explains why New Mexico's Office of the Secretary of State reports receiving frequent inquiries regarding corporate filings and reports. - Offers Efficiency - Proposal Creates "One-Stop Shop" For Businesses:
Moving the responsibilities for chartering corporations and corporate filings to the Office of the Secretary of State would provide a "one-stop shop" for businesses filing their required information with the state. Currently, the Office of the Secretary of State already handles registration of limited liability partnerships, state trademarks and service marks, notary certificates and filing of documents under the Uniform Commercial Code. Since, currently, corporate charters must be filed with the PRC, moving this duty to the Office of the Secretary of State would make it easier for businesses, as they would have to deal with only one agency. - PRC Should Focus On Regulatory Duties - Chartering Businesses Should Be Removed From PRC's Responsibilities To Allow Focus On Regulatory Duties:
The PRC, as presently structured, has too wide an array of diverse responsibilities when its core job should be the regulation of utilities, as is the case in most states. Divesting the PRC of duties that are ancillary, at best, to its core function will allow the PRC to concentrate more effectively on the increasingly complex task of regulating utilities in the state. Requiring all registration and reporting of businesses to be done in the Office of the Secretary of State should streamline the process and reduce confusion, particularly for businesses.
Arguments Against - Flawed Proposal Omits Corporation Regulation - Proposal Fails To Assign Regulating Corporations To Any State Agency:
This amendment proposes to remove the responsibilities for chartering and regulating corporations from the PRC, but it only proposes to transfer the chartering responsibility to the Office of the Secretary of State, remaining silent as to what governmental entity would "regulate" corporations. Even if it is a good idea to designate the Office of the Secretary of State as the responsible entity for chartering corporations in New Mexico, the proposed amendment is a bad idea because it fails to assign the duty to regulate corporations to any other state entity. Are the voters expected to operate on blind faith and merely hope that the Legislature finds a suitable way to regulate the state's corporations? - No Real Benefit - Proposed Changes Expensive, Cosmetic In Nature And Lacking Real Benefits To Businesses Or Taxpayers:
This amendment proposes a mere cosmetic change that will not result in any efficiencies for corporations operating in New Mexico, nor will it provide a foreseeable benefit to the taxpayers. Merging the staff and records of the PRC's Corporations Bureau with those of the Office of the Secretary of State will be neither seamless nor inexpensive. The Legislative Finance Committee estimates that migrating the Corporations Bureau's data to the Office of the Secretary of State's system will cost $120,000. There will also be expenses associated with moving and reorganizing. The functions associated with corporate registration are routine and straightforward and do not require highly trained technical staff, rendering the provisions of this amendment of no real value to businesses or the state. - Goes Too Far - Legislature Needs To Study Where To Best Place Non-Regulatory PRC Functions:
The Legislature appears to have decided to take non-utility regulatory duties away from the PRC, and the amendment could have simply done that; but it went further. Before deciding what state agency should charter and regulate the state's corporations, the Legislature should have proposed an amendment to remove the responsibility for chartering and regulating corporations from the PRC while providing for those functions in a manner to be established by law. The Legislature has not yet studied the issue of where corporate regulation would best be placed in state government and has not heard testimony on the benefits or drawbacks of having it go to the Office of the Secretary of State or some other state agency. Consequently, while this amendment starts with the good idea of removing non-utility regulation from the PRC, it goes too far. The amendment should have been written to allow the Legislature to determine where to place these functions only after studying the issue during the interim. For that reason, the amendment should be rejected. The voters have a right to expect the Legislature to make a considered and informed decision concerning where this and other functions of state government will best reside. - "Fixes" Nonexistent Problem - Current System Working Well:
This amendment fixes a nonexistent problem. Corporate registration is generally not regarded as fertile ground for undue influence or large-scale corruption. The Corporations Bureau within the PRC has not been the subject of scandal or charges of incompetence and thus there is no reason or urgency to move corporate chartering and regulation out of the PRC. Additionally, since the amendment does not propose to assign the regulation of corporations to the Office of the Secretary of State, it is unlikely that the Legislature will designate that duty to the secretary of state at a later time, so under this amendment, corporations will ultimately have to deal with two distinct agencies instead of just one for their regulatory needs.
|