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committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

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

SPONSOR Feldman

ORIGINAL DATE

LAST UPDATED

2/15/07

HB

SHORT TITLE Public Financing of Statewide Campaigns

SB 799

ANALYST Wilson

REVENUE

Estimated Revenue

Recurring

Fund

FY07 FY08 FY09

or Non-Rec

Affected

-13,370.7 -14,415.8 Recurring

General Fund (Unclaimed property)

13,370.7 14,415.8 Recurring

Other State Funds (Public Election Fund)

-100.0 -100.0 Recurring Other State Funds (Unclaimed Property Fund)

100.0 100.0 Recurring Other State Funds (Tax Administration Account)

(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)

Relates to HB 818, HB 819, HB 820, HB 821,HB 822, HB823, HB 553 and SB 400.

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)

SUMMARY

Synopsis of Bill

Senate Bill 799 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

Senate Bill 799 – Page

2

court. As such, judicial retention elections are not eligible for this funding.

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 contribu-

tion 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

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

SB 799 changes the distribution of money received under the Uniform Unclaimed Property Act

from the General Fund to the Public Election Fund. The TRD fund administrator will retain at

least $100.0 thousand in the Tax Administration Suspense Fund rather than the Unclaimed Prop-

erty Fund, to pay unclaimed property claims allowed.

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. Assuming the same 7.8 % rate of growth for the next two fiscal years, the fund will be

$13.4 million in FY08 and $14.5 million in FY09. The fiscal impact also assume the minimum

retention of $100.0 thousand for payment of Unclaimed Property claims allowed, in the Tax

Administration Suspense Fund proposed by HB-818 instead of the Unclaimed Property Fund.

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. The Governor has not taken a position on this

particular bill

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.

Senate Bill 799 – Page

3

The Code of Judicial Conduct 21-700A(3)(d) does not allow a judge to “solicit funds for a politi-

cal 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 judi-

cial 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 judicial race will receive about $82 thousand. Re-

cently, 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.

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. This law allows state funding to a

candidate to be increased as much as doubled if spending by the other candidate and independent

organizations exceed the amount the candidate was eligible to receive.

The OAG notes that currently the Voter Action Act provides public funding to the election cam-

paigns of candidates for the office of Public Regulation Commissioner who agree to accept lim-

ited 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 fi-

nancing 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. Partici-

pant 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 Gov-

ernor, Lieutenant Governor, Attorney General, Treasurer, Auditor, Supreme Court Justice etc.

Candidate participation is voluntary. The United States Supreme Court in Buckley v. Valeo up-

held a federal law imposing campaign contribution limits, but ruled that portions of that law im-

posing campaign expenditure limits violated the First Amendment’s protections regarding free-

dom of expression and association.

The bill would prescribe the total amount of $5.00 contributions the candidates for various of-

fices 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 pre-

scribe 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.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

SB 799 relates to HB 818, HB 819, HB 820, 821, 822, 823, HB 553, and SB 400.

Senate Bill 799 – Page

4

POSSIBLE QUESTIONS

The AOC asks if an outside organization comes into a race very late, will additional state fund-

ing 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/mt