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 responsibility for the accuracy of these reports
if they are used for other purposes.
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F I S C A L I M P A C T R E P O R T
SPONSOR Lujan, B.
ORIGINAL DATE
LAST UPDATED
3/20/07
3/30/07 HB 6/aHAFC/aSFl#1
SHORT TITLE Public Financing of Statewide Campaigns
SB
ANALYST Wilson/Aubel/Fernandez
REVENUE
Estimated Revenue
Recurring
Fund
FY07 FY08 FY09
or Non-Rec
Affected
-
9,900
-
9,900
R
ecurring
General Fund (Unclaimed
P
ro
p
erty
Fund
)
9,900
9,900
Recurring
Other State Funds (Public Ele
c
tion Fund)
-1,200 -1,200 Recurring
General Fund (Unclaimed Property Fund)
1,200 1,200 Recurring
Other State Funds (Public Election Fund)
(Parenthesis ( ) Indicate Revenue Decreases)
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)
FY07
FY08
FY09 3 Year
Total Cost
Recurring
or Non-Rec
Fund
Affected
Total
Unknown Unknown
Recurring General
Fund
(Parenthesis ( ) Indicate Expenditure Decreases)
SOURCES OF INFORMATION
LFC Files
Responses Received From*
Administrative Office of the Courts (AOC)
Department of Finance & Administration (DFA)
Office of the Attorney General (OAG)
Public Defender Department (PDD)
Secretary of State (SOS)
* Responses were submitted during the 2007 Regular Session for SB 799, an identical Campaign
Reform Bill.
SUMMARY
Synopsis of SFl#1 Amendment
The Senate Floor amendment strikes the effective date of the provisions of the act which would
have been July 1, 2007 and inserts a new section with a contingent effective date.
pg_0002
House Bill 6/aHAFC/aSFl#1 – Page
2
The provisions of the act shall become effective upon certification by the Secretary of State that
the constitution has been amended no later than December 31, 2008 to abolish nonpartisan
retention elections for justices of the Supreme Court and judges of the Court of Appeals and to
require those justices and judges to be elected to their positions in partisan elections.
Synopsis of HAFC Amendment
The House Appropriations and Finance Committee Amendments remove all references to
elected state offices other than the judicial department subject to statewide elections and office of
the PRC. Qualifying contributions and the amount to be distributed to a qualified candidate
remain as defined for these positions:
Candidates receive funding based on a formula drawn from the number of registered voters in
the state and number registered for each party. For the primary, candidates receive funding
based on the number of persons registered for that party. For the general election the formula is
based on all registered voters. For both elections, the amount is listed below.
Supreme Court
$0.15
Court of Appeals
$0.15
For PRC elections, the amount is based on the number of voters in the district and amended by
party affiliation for a primary election:
Public Regulatory Commission $0.25
The HAFC amendment changes the fiscal impact significantly. In the original bill, the funds
generated from unclaimed property to the General Fund would have been fully diverted to the
Public Election Fund in the estimated revenue amount of $9.9 million. The amendment now
specifies that $100 thousand per month will be transferred to the Public Election Fund for an
annual total of $1.2 million. This money does not revert at the end of the fiscal year. The sub-
account established for PRC elections remains as specified in the original bill.
The Unclaimed Property Fund does not receive money equally throughout the year; therefore,
the required $120 thousand monthly distribution to the Public Election Fund will most likely be
problematic.
In order to address the potential problem raised by the monthly distribution, other options
include defining the transfer as an annual distribution or one based on a percentage of available
funds up to a specified amount.
Synopsis of Original Bill
House Bill 6 amends the Voter Action Act Section 1-19A-2 NMSA 1978 and expands public
funding of elections to statewide offices of the executive and judicial branches. Currently, this
funding is limited Public Regulatory Commission (PRC) elections. Funding will be available
based on a formula for contested primaries and contested general elections. In judicial races the
funding will only be available for contested elections to the court of appeals and the supreme
court. As such, judicial retention elections are not eligible for this fund.
pg_0003
House Bill 6/aHAFC/aSFl#1 – Page
3
To become eligible for state funding a candidate must have enough qualifying contributions. For
the governor and lieutenant governor this will be 0.02% of the number of voters in the state or
about 1,100 contributions. For all other races, it is 0.01% of the number of voters in the state or
about 550 contributions. For the PRC it is 0.01% of the voters in that PRC district. No
contribution can exceed $100.00.
Candidates receive funding based on a formula drawn from the number of registered voters in
the state and number registered for each party. For the primary candidates receive funding based
on the number of persons registered for that party. For the general election the formula is based
on all registered voters. For both elections, the amount is listed below.
Governor $1.50
Lt. Governor $0.25
Comm. of Public Lands $0.75
Secretary of State $0.15
State Auditor $0.15
Supreme Court $0.15
Court of Appeals $0.15
PRC
$0.25
The formula for PRC candidates is based on the number of voters in the district for which the
candidate is running, further qualified by party affiliation for the primary election.
Once a candidate becomes certified and accepts the state funding, the candidate cannot accept
any contributions or loans from another source except the candidate’s political party. After both
the primary and general election, the candidate must return all unused funds to the Secretary of
State within 30 days.
FISCAL IMPLICATIONS
HB 6 changes the distribution of money received under the Uniform Unclaimed Property Act
from the General Fund to the Public Election Fund.
TRD notes that State Unclaimed Property collections have been unstable in the past but recently
have experienced an upward trend, with about $11.6 million in FY06 and $12.5 million projected
for FY07. Because of the volatility of the fund, the 2006 consensus estimate for the fund is $10
million for FY08 going forward, which is the revenue estimate utilized.
The TRD fund administrator will retain at least $100.0 thousand in the Unclaimed Property Fund
to pay unclaimed property claims allowed, which is reflected in the revenue fiscal chart.
The bill also creates a sub-account in the Public Election Fund to segregate the $300 thousand
currently deposited in the Public Election Fund to be used solely for the PRC elections.
SIGNIFICANT ISSUES
DFA is skeptical that the State’s residents will be well served by diverting existing General Fund
revenues to the public financing of campaigns.
pg_0004
House Bill 6/aHAFC/aSFl#1 – Page
4
In judicial races the funding will only be available for contested primaries and general elections
to the court of appeals and the Supreme Court. No district, metropolitan, or magistrate elections
will qualify. Judicial retention elections are also excluded from this funding.
The Code of Judicial Conduct 21-700A(3)(d) does not allow a judge to “solicit funds for a
political organization or candidate." A committee that is separate from the candidate, but acting
on behalf of the candidate, does the fundraising. For example, in a recent contested statewide
judicial race, one candidate does not know how many campaign contributors there were because
of these limitations.
Recent data estimate there are about 550,000 registered voters in New Mexico. Based on the
formula in the bill, a candidate in a contested general judicial race will receive about $82.5
thousand. Recently, the campaign committee for a candidate in a contested statewide judicial
race raised $300 thousand. It is uncertain if this funding formula in this bill will provide
sufficient funding for a judicial candidate to run a viable campaign. According to AOC, about
three or four covered judgeships are up for election annually.
The bill changes the PRC public support funding formula, which was based on an average of
campaign expenditures for the preceding four elections, to the specified formula above. Based
on the estimate of 550,000 registered voters statewide and assuming equal distribution across the
5 PRC districts, a “ball-park’ estimate for a PRC candidate would equal $27.5 thousand.
Additional estimates per candidate in general elections for the relevant elected positions are as
follows:
Governor $825,000
Lt. Governor $137,000
Comm. of Public Lands $412,500
Secretary of State $82,500
State Auditor $82,500
The AOC notes that there is significant concern in judicial campaigns because of the influence of
outside organizations that take an active role in a campaign. If spending by the other candidates
and independent organizations exceed the amount a participating candidate was eligible to
receive, this law allows additional “matching" state funds be distributed to the candidate by the
excess amount up to the original amount received. Thus the final contribution could be doubled.
The OAG notes that currently the Voter Action Act provides public funding to the election
campaigns of candidates for the office of Public Regulation Commissioner who agree to accept
limited campaign contributions from individuals and political action committees. The Act is New
Mexico’s experiment with “clean elections", where PRC candidates hoping to receive public
financing must collect a certain number of small "qualifying contributions" ($5) from registered
voters. In return, they are paid a flat sum by the government to run their campaign, and agree not
to raise money from private sources. Proponents believe that the “clean election" system will
minimize perceived “undue influence" of wealthy contributors over political candidates.
Participant candidates forego traditional special interest donations and agree to accept public
funding.
This bill would expand coverage of that act to include election campaigns for candidates for any
statewide executive department or judicial department office. Those offices could include
pg_0005
House Bill 6/aHAFC/aSFl#1 – Page
5
Governor, Lieutenant Governor, Attorney General, Treasurer, Auditor, Supreme Court Justice
etc. Candidate participation is voluntary. The United States Supreme Court in Buckley v. Valeo
upheld a federal law imposing campaign contribution limits, but ruled that portions of that law
imposing campaign expenditure limits violated the First Amendment’s protections regarding
freedom of expression and association.
The bill would prescribe the total amount of $5.00 contributions the candidates for various
offices may accept from individual donors (qualifying contributions which are deposited into the
public election fund) based upon percentages of voters within the state. The bill would also
prescribe the amounts each candidate would be entitled to receive from the fund, based upon the
office sought.
ADMINISTRATIVE IMPLICATIONS
It is not known what the administrative implications are for the SOS as a result of the provisions
of this bill.
POSSIBLE QUESTIONS
The AOC asks if an outside organization comes into a race very late, will additional state
funding be available in time for another candidate.
What if a candidate withdraws. Will his replacement receive the money he is entitled to under
this act.
DW/MA/CF/mt:csd