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

SPONSOR Varela

ORIGINAL DATE

LAST UPDATED

02/10/06

HB 222

SHORT TITLE Expand Educational Retirement Board Members

SB

ANALYST Geisler

APPROPRIATION

Appropriation Contained Estimated Additional

Impact

Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

Minimal Recurring Educational Retirement

Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates: SB 130

SOURCES OF INFORMATION

LFC Files

Educational Retirement Board (ERB)

SUMMARY

Synopsis of Bill

House Bill 222 is Legislative Finance Committee and State Permanent Fund Task Force spon-

sored legislation to increase the number of board members on the Educational Retirement Board

(ERB) from seven (7) to ten (10) and to increase the financial expertise of the board. The three

additional members are:

1)

one member to be appointed by the governor for a term of four years who possesses at

least ten years of investment or public finance experience;

2)

one member to be appointed by the university president’s council for a term of four years

who possesses at least ten years of investment or public finance experience;

3)

one member to be appointed by the New Mexico coalition of school administrators for a

term of four years who posses at least ten years of investment or public finance experi-

ence.

A vacancy occurring in the term of an appointed member shall be filled by the appointing author-

ity for the unexpired term. A vacancy occurring in the term of an elected member shall be filled

by the appropriate association electing a new member to fill the unexpired term.

House Bill 222 -- Page 2

FISCAL IMPLICATIONS

Adding additional board members would likely cause a slight increase in annual board related

costs such as travel expenses and per-diem.

SIGNIFICANT ISSUES

The current board is comprised of seven members: three educators, two governors’ appointees,

the State Treasurer and the Secretary of Education. The only other major finance related organi-

zations with boards this size are the Board of Finance and the Mortgage Finance Authority,

chaired by the governor and lieutenant governor, respectively. Most other finance related state

boards have 10 to 12 members. Since it is not uncommon for the ERB to meet with the mini-

mum quorum of four members, a increase in board members is warranted to reduce the workload

of the current board members and provide additional financial expertise.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Duplicates SB 130.

ALTERNATIVES

ERB has studied this issue of board expansion and recommends an increase from seven (7) to

eleven (11) members to avoid tie votes.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL.

The number of board members will remain at seven.

GG/sb:mt