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

SPONSOR Payne

DATE TYPED 2/07/05

HB

SHORT TITLE PRC Commissioner Elections and Appointments

SJR 4

ANALYST Rosen

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

NFI

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates SJR3 and HJR8

Relates to HJR2

SOURCES OF INFORMATION

Responses Received From

Public Regulation Commission (PRC)

Secretary of State (SOS)

No Responses Received From

Attorney General’s Office (AGO)

Governor’s Office (GO)

SUMMARY

Synopsis of Bill

Senate Joint Resolution 4 submits to voters a proposal to amend Article 11, Section 1 of the Con-

stitution of New Mexico changing the membership of PRC as follows: the current system of five

commissioners elected by district will be replaced with a system in which three commissioners

are elected by district and two are appointed by the governor with the consent of the senate. The

five existing Commission districts are to be redistricted along the boundaries of the three con-

gressional districts. For commissioners appointed by the governor, removal from office will be

based on incompetence, neglect of duty, or malfeasance in office. The amendment does not pro-

vide for removal of elected commissioners. The two commissioners appointed by the governor

must be of different political parties. Members will serve staggered four-year terms, with no

Senate Joint Resolution 4 -- Page 2

more than two consecutive terms. Members will elect from amongst themselves a chairperson

who will serve as chair for a term of two years.

If the proposed amendment is ratified by the voters, the appointed commissioners take office on

January 1, 2009 and the elected commissioners take office on or about January 1, 2011.

Significant Issues

According to PRC, the proposed amendment does not address qualifications for gubernatorial

appointees to the Commission. PRC questions whether mixing elected and appointed commis-

sioners would create greater PRC accountability. PRC notes the proposed amendment provides

for removal of appointed commissioners on particular grounds but does not subject elected

commissioners to removal on the same grounds. PRC reports the Commission routinely engages

in quasi-judicial administrative proceedings that affect the rights of parties and questions whether

candidates for gubernatorial appointment should be subject to restrictions based on actual or po-

tential conflict of interest or bias.

PERFORMANCE IMPLICATIONS

According to PRC, the two appointed commissioners would be politically accountable to the

governor, while the elected commissioners would be politically accountable to their constituents.

This might have performance implications in that it would create different lines of accountability

as between the two sets of commissioners, even though the Commission would still have a statu-

tory duty to exercise its overall authority in the public interest

FISCAL IMPLICATIONS

PRC reports this resolution may impact NMSA § 1-19A-10 (Public Election Fund: Creation and

Use). Placing this constitutional item on the ballot could also pose some unanticipated costs to

the SOS if it is done by special election.

SOS indicates this resolution will not affect the current provisions of the Voter Action Act for

Public Regulation Commission campaign financing as set forth in Sections 1-19A-1 through 1-

19A-17 NMSA 1978.

ADMINISTRATIVE IMPLICATIONS

According to PRC, having a mixture of elected and appointed commissioners could cause uncer-

tainty about the administrative placement of the Commission within the executive branch. For

example, would the Commission be subject to executive orders of the Governor.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

This resolution duplicates HJR8 and SJR3, which also submit to the voters a proposed constitu-

tional amendment to replace the current system of five commissioners elected by district with a

system in which three commissioners would be elected by district and two would be appointed

by the governor. SJR3 does not include any requirement that the two appointed commissioners

be of different political parties.

Senate Joint Resolution 4 -- Page 3

This resolution relates to HJR2, which also would submit to the voters a proposed constitutional

amendment to make fundamental changes to the Commission, removing the existing constitu-

tional authority of the Commission and replacing it with such authority as might be conferred by

the legislature.

TECHNICAL ISSUES

PRC indicates several technical issues with this resolution:

The terms “incompetence,” “neglect of duty,” and “malfeasance in office” are not defined and

could be the subject of litigation.

The proposed amendment does not address issues of actual or potential bias, conflicts of inter-

ests, or the appearance of such bias or conflicts in the possible appointment of former employees

of regulated entities to the commission. Examples of “problem” appointments might include

persons currently or formerly affiliated with a regulated entity, such as attorneys, consultants, or

contractors for such an entity.

If the proposed amendment is approved by the voters, the legislature would have to conform the

Commission’s other organic statutes (such as the Public Regulation Commission Act, NMSA §

8-8-1, et seq.) and statutes relating to the Commission’s substantive authority (such as those re-

lating to public utilities, telecommunications, transportation, and insurance – see, e.g., NMSA §§

62-1-1, 63-1-1, 63-9A-1, 65-2-80, and 59A-1-1, [et seq.]).

ALTERNATIVES

Retain the current terms of Article 11, § 1 of the New Mexico Constitution.

Refine terms in the proposed amendment relating to the process, standards, and effect of guber-

natorial appointments.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL.

Status quo

JR/sb