Fiscal impact
reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for
standing finance committees of the NM Legislature. The LFC does not assume
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purposes.
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in
|
SPONSOR |
Payne |
DATE TYPED |
|
HB |
|
||
|
SHORT
TITLE |
Governor To Appoint PRC Members, CA |
SB |
SJR 6 |
||||
|
|
ANALYST |
Garcia |
|||||
APPROPRIATION
|
Appropriation
Contained |
Estimated
Additional Impact |
Recurring or
Non-Rec |
Fund Affected |
||
|
FY04 |
FY05 |
FY04 |
FY05 |
||
|
|
|
|
($32.0) |
Non-Recurring |
General
Fund |
(Parenthesis
( ) Indicate Expenditure Decreases)
Relates to HJR 1 and HJR 2 and HJR 7.
LFC Files
Responses
Received From
Public
Regulation Commission
Attorney
General’s Office
SUMMARY
Synopsis of Bill
The bill would submit
to the voters at the November general election a proposal to amend Article 11,
§ 1 of the Constitution of New Mexico. The amendment would reduce the number of
elected PRC commissioners from 5 to 3. The three elected members would be
elected from the federal congressional districts. The bill would require the
other two commissioners to be appointed by the governor, with advice and
consent of the Senate, and require each appointee be from the two largest
political parties.
Furthermore, the bill further amends the statute
to note that one of the elected shall hold office for two years and the other
two for four years beginning on January 1 of the year following the election. The chairman would be
elected at the first meeting after commissioners have been elected, and would
serve for two years.
Significant Issues
In 2001, the legislature passed Senate Joint Memorial 41 requesting that the New Mexico Legislative Council designate an interim committee to examine the organization, financing and performance of the PRC. The Legislative Council appointed the Public Regulation Commission Subcommittee to meet during the 2001 and 2002 interims to address these issues.
The subcommittee report to the Legislative Council makes recommendations in four areas, including the organization of the PRC. Currently, the responsibilities of the PRC consists of regulating public utilities, including electric, natural gas and water companies; transportation companies, including common and contract carriers; transmission and pipeline companies, including telephone, telegraph and information transmission companies; insurance companies and others engaged in risk assumption; and other public service companies in such manner as the legislature shall provide. The subcommittee acknowledged that, because of the complex issues involved in the decision-making made by the PRC that impact the businesses and citizens of New Mexico, commissioners must have certain qualifications. These qualifications would ensure that commissioners have the background and experience necessary to understand complex regulatory issues.
The subcommittee members, however, supported two different approaches regarding the selection of PRC commissioners, and recommended a full debate by the legislature.
Approach #1
This
position is consistent with the 1995 Report of the Constitutional Revision
Commission to
the Governor and
the Legislature that stated:
Because
the essential task (of utility regulation) requires special expertise, judicial-like
adjudicatory responsibility, as well as administrative and rule-making
responsibility, it is also recommended that the entity be appointive rather
than elective, and that the powers and duties and process of removal be
established by law.
The
1997 Report of the Regulation Commission Reorganization Committee also
recommended a constitutional amendment “to provide for appointment rather than
election of the public regulation commission...”.
FISCAL IMPLICATIONS
The bill does not
contain an appropriation. However, an estimated non-recurring cost to the general
fund of $32.0 is expected because of the cost to the Secretary of State for
advertising and printing to place an item on the ballot.
ADMINISTRATIVE IMPLICATIONS
As an agency controlled by separately elected officials, the PRC is an
administratively independent part of the executive branch. With the new mix of appointed and elected,
will the PRC remain an independent agency or more a part of the executive
branch?
RELATIONSHIP
SJR 06 relates to HJR
01, HJR 02, and HJR 07. HJR 02 adds the provision that no PRC appointee can by
“employed by an entity regulated by the commission for the ten years prior to appointment.”
In addition, HJR 02 does not include language that HJR 01 adds that address commissioners’
expertise. HJR 01 states: “commissioners shall at minimum have four years of education
or experience in regulatory law or affairs.” HJR 07 eliminates 2 commissioner
positions and maintains that the remaining 3 commissioners be appointed by the
governor.
TECHNICAL ISSUES
If voters approve the
constitutional amendment, the Legislature will subsequently have to repeal the
existing laws governing commissioner elections.
The bill would require
further amendments if the number of
OTHER SUBSTANTIVE ISSUES
PRC provided the
following comments:
1) PRC commissioners, as elected, are directly
accountable to the citizens of the state and work on behalf of citizens
directly. However, moving commissioners
to appointed, they would be directly accountable to the governor and indirectly
citizens.
2) PRC commissioners, as elected, serve as
consumer advocates where they create policies on utilities rates, insurance
regulation, telecommunication regulation, transportation regulation, etc. based
solely on consumer interests and independent of legislative or executive
mandates or policies. However, moving to appointed, commissioners will likely
serve at the pleasure of the governor’s policy initiatives, which at times can be
counter to consumer interests.
3) Moving PRC commissioners to appointed can
create conflicts of interest. For instance, commissioners, as elected and
independent officers, are first and foremost consumer advocates and cannot
accept campaign contributions from regulated entities. However, the governor is
not constrained by the same requirements, which can create conflicts where
regulated entities’ interests have special favor with the governor/executive
and consequently filtrate down to appointed commissioners.
The Attorney General provided the following
comments:
Other appointments to
constitutional commissions (i.e. university regents) have language in the text
explaining: (a) on what grounds a commissioner can be removed; (b) whether a
commissioner can serve until her replacement is confirmed by the Senate. These items are not required, but help
explain how to resolve disputed situations.
POSSIBLE QUESTIONS
DG/dm