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F I S C A L I M P A C T R E P O R T

SPONSOR Grubesic

ORIGINAL DATE

LAST UPDATED

2/25/07

HB

SHORT TITLE Prohibit Certain Acts by Public Officers

SB 1107

ANALYST Wilson

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY07

FY08

FY09 3 Year

Total Cost

Recurring

or Non-Rec

Fund

Affected

Total

$0.1

$0.1

$0.1 Recurring General

Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SB 1107is related to several other bills addressing ethics in government.

SOURCES OF INFORMATION

LFC Files

Responses Received From

Administrative Office of the Courts (AOC)

Administrative Office of the District Attorneys (AODA)

Department of Finance & Administration (DFA)

Office of the Attorney General (AOG)

Public Defender Department (PDD)

Public Education Department (PED)

State Treasurer’s Office (STO)

SUMMARY

Synopsis of Bill

Senate Bill 1107 amends the Governmental Conduct Act (NMSA Sections 10-16-1 to 10-16-8).

It expands the act’s provisions, clarifies terms and enacts new provisions as follows:

The bill amends the definition section to include an individual’s family and state agencies to be

covered by the act.

Removes the provision allowing the Governor to make an exception for a public officer or

employee to be disqualified from engaging in official acts directly affecting their interest.

Provides that legislators, public officers or employees shall not disclose confidential information

acquired by virtue of their office for their gain or another’s gain.

Clarifies that state agencies shall not enter into contracts for services, construction, or tangible

personal property with public offices or employees of the state, their families or with businesses

Senate Bill 1107– Page

2

in which they have a substantial interest, unless the contract is awarded pursuant to the

procurement code. The act also provides that these contractors shall not be eligible for a sole

source or small purchase contract.

Clarifies that state agencies or political subdivisions of the state shall not accept a bid or proposal

from a person who participated in the preparation of specifications, qualifications, evaluation

criteria on which the specific competitive bid or proposal was based.

Prohibits certain business sales from public officers or employees and their families or a business

in which they have a substantial interest, to a state agency where they are employed.

Restricts public officers, employees and their families and businesses from conducting business

with employees supervised by them, or when they have regulatory authority over the employee

or another public officer.

Prohibits public officers or employees from receiving a commission from sales or transactions to

persons when they have regulatory authority over the person.

Prohibits public officers and employees from accepting employment or an offer of contract from

a person when they have regulatory authority over the person.

Prohibits public officers and employees from coercing state officers or employees to pay or

contribute to a party, committee, organization, agency or person for a political purpose. It

further prohibits threatening to deny a promotion or pay increase because of the person’s vote,

failure to make payment to a political fund, failure to buy tickets to political fundraisers or

failure to participate in political activities.

Prohibits violating the officers or employees duty to not use or not allow use of state property.

Requires disclosure to the Secretary of State (SOS) of all outside employment engaged in by an

officer or employee other than the employment with the state.

FISCAL IMPLICATIONS

There will be a minimal administrative cost for statewide update, distribution and documentation

of statutory changes. Any additional fiscal impact on the judiciary will be proportional to the

enforcement of this law and commenced prosecutions and civil actions. New laws, amendments

to existing laws and new hearings have the potential to increase caseloads in the courts, thus

requiring additional resources to handle the increase.

There will be an added burden on all state agencies in order to comply with the provisions of this

bill, but they should be able to handle the requirements with existing resources.

SIGNIFICANT ISSUES

DFA notes that this bill raises several significant issues. While the language extending the

original prohibitions of the statute to family members seems straightforward enough, there are

four other major changes instituted by this legislation.

First, in the past, contracts could be awarded to employees, officers or legislators pursuant to the

Senate Bill 1107– Page

3

Procurement Code. Under this bill, sole sources and small purchase agreements are explicitly

removed from the methods of award. Basically, this means such contracts can only be awarded

via the request for proposals process, which is perhaps the fairest method of procurement under

the Code. This addition to the law will presumably halt award of contracts to persons directly

chosen and force a more balanced procurement process.

Second, persons covered by the legislation could not sell products or services to the agency for

which they work or to any person over whom they exert any control (through supervision, etc.).

This will presumably remove a sense of intimidation to employees feeling forced to purchase

goods or services from a supervisor.

Third, the bill will stop supervisors from forcing employees to perform political activities on the

job or to suffer job repercussions because of the way in which they vote or support political

candidates. Although such matters are covered elsewhere as well, this, too, will presumably

remove a sense of intimidation for employees and support their political freedom as guaranteed

by the Constitution and elsewhere.

Fourth, this legislation will make it mandatory for all employees or officers to disclose in writing

to their supervisors or to the Secretary of State (if they have no direct supervisor) all outside

employment (employment other than that which the person holds with the State). This section of

the legislation will appear to be overreaching and a potential invasion of privacy upon

employees' rights of free enterprise and, possibly, free expression. This language could better be

rewritten to encompass only those situations which hold a potential conflict of interest for the

employee given their particular employment with the State.

ADMINISTRATIVE IMPLICATIONS

State agencies will have added administrative responsibilities as a result of the provisions of this

bill, but they should be able to handle the requirements with existing staff.

RELATIONSHIP

SB 1107 duplicates HB 823

SB 1107 relates to:

HB 553, Contributions to State Agents & Candidates

HB 818, Public Financing of Statewide Campaigns

HB 819 Gift Act

HB 820, Legislative Campaign Funds for Office Duties

HB 821, Campaign Reporting Requirements

HB 822, State Ethics Commission Act

HB 1154, Lobbyist Filing Fees

HB 1295, Retaliation for Ethics Violation Reporting

HB 1053, Campaign Reporting Act Exception Statements

HB 1296, Investigation of Elected Officials by AG

SB 342, Candidate Withdrawal Requirements

SB 400, Contributions to State Agents & Candidates (dup HB 553)

SB 445, Extend Governmental Conduct Act

SB 588, Former Legislators as Lobbyists

Senate Bill 1107– Page

4

SB 671, Candidate Withdrawal Requirements (dup SB

342)

SB 796, Legislative Campaign Funds for Office Duties (dup HB 820)

SB 799, Public Financing of Statewide Campaigns (dup HB 818)

SB 800, Campaign Reporting Requirements (dup HB 821)

SB 815, State Ethics Commission Act (dup HB 822)

SB 931, Gift Act (dup HB 819)

SB 953, Lobbyist Filing Fees (dup HB 1154)

SB 1043, Whistleblower Protection Act

SB 1051, Inclusion in Governmental Conduct Act

SB 1137, Reporting of Lobbyist Compensation

SB 1177, Disclosure by Procurement Contractors

TECHNICAL ISSUES

PED provided the following:

•

Page 2, lines 14 – 18, excluding judges from the definition of “public offer or employee",

will exempt judges from the scope of the amendments to the Governmental Conduct Act.

But see the recent case of, State v. Maestas, 2007-NMSC-001 The Supreme Court

reversed 5 convictions for official acts prohibited under the current version of the

Governmental Conduct Act and 5 counts of criminal sexual penetration during the

commission of official acts against a municipal judge because the Act currently excludes

judges from the “public office or employee" definition.

•

Page 2, lines 21 – 22, adds a definition of “state agency" which does not specifically

include “departments" or “boards" and may, therefore, be considered vague. Under

Section 41-4-3 of the Tort Claims Act, “state agency means the state of New Mexico or

any of its branches, agencies, departments, boards, instrumentalities or institutions.“

Compare with the definition of “state agency" found at Section 6-1-13(C) of State Board

of Finance laws, “means the state of New Mexico or any of its branches, agencies,

departments, boards, instrumentalities, or institutions other than state educational

institutions designated by Article 12, Section 11 of the constitution of New Mexico."

•

The prohibitions contained in section 8 B, page 8, could be interpreted as prohibiting the

children or spouses of children from selling school or school-related (booster club) fund-

raising items such as candy bars and other items in state agencies; similarly, state agency

bulletin boards that contain the casual sale of used cars, used items, timeshares, etc. might

also be affected by this subsection’s prohibitions.

•

Page 10, line 7’s use of “other things of value" is ambiguous and does not give clear

notice of what this means. Unless a dollar amount is specified, some might believe that

something of low or minimal value to them is not within the scope of the subsection’s

restrictions.

•

Page 11, lines 4 – 9, which requires written disclosure of all outside employment ,is

burdensome and may have the unintended consequence of embarrassing and harassing

low-paid government employees who have and perhaps must frequently change more

than one outside employment, and who might choose not to disclose these jobs to their

supervisors for personal reasons. It should be recalled that violation of the Governmental

Conduct Act is a misdemeanor that carries with it a $1,000 fine. Because outside

employment is not currently a criminal act, this section will

Senate Bill 1107– Page

5

POSSIBLE QUESTIONS

1.

Why doesn’t this bill apply to penalties to judges.

2.

The bill imposes a duty of due diligence upon state agencies in awarding contracts

contemplated under the legislation, but what is the penalty for a failure to perform this

duty.

3.

If a contract is mistakenly awarded that should have been prohibited under this

legislation, what occurs when this is later discovered.

DW/mt