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

SPONSOR Robinson

ORIGINAL DATE

LAST UPDATED

3-05-07

HB

SHORT TITLE Study First Responders For Retirement

SJM 22

ANALYST Aubel

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY07

FY08

FY09 3 Year

Total Cost

Recurring

or Non-Rec

Fund

Affected

Total

$15.0

$15.0

Non-

Recurring PERA

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

http://www.usccr.gov/pubs/na0703/na0204.pdf

(pp. 76-79)

Responses Received From

Department of Public Safety (DPS)

Department of Health (DOH)

Indian Affairs Department (IAD)

Public Employees Retirement Association (PERA)

SUMMARY

Synopsis of Bill

Senate Joint Memorial 22 requests that New Mexico tribes and the Public Employees Retirement

Association conduct a study to determine the feasibility of including tribal first responders in the

retirement plans administered by PERA. SJM22 also requests that PERA report the findings and

recommendations for legislation to the second session of the 48

th

Legislature. Copies of this

memorial are to be transmitted to the governors of the nineteen pueblos in New Mexico, the

president of the Navajo Nation, the president of the Jicarilla Apache Nation, the president of the

Mescalero Apache Tribe, the execute director of the Public Employees Retirement Association

and the co-chairs of the New Mexico Legislative Council.

FISCAL IMPLICATIONS

The required feasibility study would require an actuarial analysis to determine the costs and

benefits of including tribal law enforcement, tribal fire departments and other tribal first

responder agencies as public employers in PERA. PERA estimates the cost of the study at $15

thousand. To report by the second session of the 48

th

Legislature, the study would most likely

need to be initiated in FY07. The study’s cost is not included in PERA’s FY07 or FY08 budgets.

Senate Joint Memorial 22 – Page

2

Possible funding sources and formulas for the retirement plans would be key issues for the study

to determine.

SIGNIFICANT ISSUES

DOH states that tribal first responders are vital to emergency response locally and during a

statewide or national declared emergency, whether the responder is law enforcement, emergency

medical services, emergency management, or a firefighter. Tribal first responders are both paid

and volunteer; however, they are not currently eligible to participate in the state employee

retirement program.

According to SJM 22, tribal governments have difficulty retaining first responders due to

uncompetitive compensation packages. It proposes addressing this problem by studying the

possibility of making tribal first responders eligible to participate in the PERA retirement system.

The policy issue is whether this eligibility would address compensation disparities between tribal

governments and other governmental units who hire first responders in New Mexico and, as a

result, increase the retention rate for tribal entities.

According to IAD, tribal entities in New Mexico do currently face a shortage of first responders

and points to U.S. Department of Justice (DOJ) study that estimates that roughly 4,300 police

officers are needed to provide adequate coverage throughout Indian Country in the U.S.,

approximately two times the current level. The study also specifies that the level of police

coverage on tribal lands is much lower than anywhere else in the U.S., identifying inadequate

funding as the primary cause for this shortfall.

DOH also notes that many tribes lack adequate personnel to provide public health and safety

services for their communities, stating that only approximately 6 out of 22 tribes have active

emergency managers to prepare for and respond to emergencies. DOH suggests that the incentive

of possible PERA membership may increase that number.

IAD notes two associated issues to consider in regard to SJM 22, as follows:

•

How allowing tribal first responders to participate in PERA may impact tribal sovereignty;

•

How economic conditions of tribal employers of first responders would be taken into account.

Simply enabling tribal first responders to participate in PERA will not help address the issue

of disparate compensation packages if tribes lack the resources to fund PERA benefits.

According to the DOJ study, most tribal police departments are funded through Bureau of Indian

Affairs contracts, with some resources provided by the DOJ. The study concludes that

appropriations for worthwhile programs have underestimated the extent of the challenges

remaining for justice and law enforcement in tribal areas and that none has the funding or budget

stability for maximum success.

PERFORMANCE IMPLICATIONS

DOH suggests that the approach proposed by SJM 22 meets part of 2006 New Mexico

Comprehensive Strategic Health Plan, Chapter 10:

GOAL 1: Increase and Fortify Human and Material Resources to Respond to Health

Emergencies; and

Senate Joint Memorial 22 – Page

3

GOAL 2: New Mexico Communities are Prepared to Respond to a Public Health Emergency.

ADMINISTRATIVE IMPLICATIONS

PERA will need to coordinate each election for adoption of a new coverage plan by tribal law

enforcement, tribal fire departments and other tribal first responder agencies statewide.

TECHNICAL ISSUES

PERA notes that state law would have to be changed to permit tribal law enforcement

departments, fire departments and emergency medical services to join the public employees

retirement plan. Currently tribal governments are not included as public employers qualified to

join PERA.

OTHER SUBSTANTIVE ISSUES

The Pension Protection Act of 2006 amends the Section 414(d) of the Internal Revenue Code

(IRC) to allow Indian tribal governments and their subdivisions, agencies and instrumentalities

to establish and maintain a governmental plan, and it affords such plans the same treatment as

other governmental plans under the Employee Retirement Income Security Act (ERISA) and the

IRC. Such a plan may only cover employees substantially all of whose services are provided in

the performance of essential governmental functions, but that are not commercial activities.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

A study to review the costs and benefits of allowing tribal first responder departments to join

PERA will not be undertaken.

POSSIBLE QUESTIONS

1.

Can PERA funds be used for the benefit of non-members for exploring possible

membership.

2.

What other factors contribute to first responder hiring and retention issues for trial

departments.

3.

Would a pension plan, by itself, solve the turnover problem presented in SJM 22.

4.

How would the retirement plan funding address both paid and volunteer members.

5.

Under which plan or plans would the tribal first responders be eligible.

MA/mt