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.
Current FIRs (in HTML & Adobe PDF formats) are a vailable on the NM Legislative Website (legis.state.nm.us).
Adobe PDF versions include all attachments, whereas HTML versions may not. Previously issued FIRs and
attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.
F I S C A L I M P A C T R E P O R T
SPONSOR Grubesic
ORIGINAL DATE
LAST UPDATED
2/25/07
HB
SHORT TITLE Prohibit Certain Acts by Public Officers
SB 1107
ANALYST Wilson
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)
FY07
FY08
FY09 3 Year
Total Cost
Recurring
or Non-Rec
Fund
Affected
Total
$0.1
$0.1
$0.1 Recurring General
Fund
(Parenthesis ( ) Indicate Expenditure Decreases)
SB 1107is related to several other bills addressing ethics in government.
SOURCES OF INFORMATION
LFC Files
Responses Received From
Administrative Office of the Courts (AOC)
Administrative Office of the District Attorneys (AODA)
Department of Finance & Administration (DFA)
Office of the Attorney General (AOG)
Public Defender Department (PDD)
Public Education Department (PED)
State Treasurer’s Office (STO)
SUMMARY
Synopsis of Bill
Senate Bill 1107 amends the Governmental Conduct Act (NMSA Sections 10-16-1 to 10-16-8).
It expands the act’s provisions, clarifies terms and enacts new provisions as follows:
The bill amends the definition section to include an individual’s family and state agencies to be
covered by the act.
Removes the provision allowing the Governor to make an exception for a public officer or
employee to be disqualified from engaging in official acts directly affecting their interest.
Provides that legislators, public officers or employees shall not disclose confidential information
acquired by virtue of their office for their gain or another’s gain.
Clarifies that state agencies shall not enter into contracts for services, construction, or tangible
personal property with public offices or employees of the state, their families or with businesses
pg_0002
Senate Bill 1107– Page
2
in which they have a substantial interest, unless the contract is awarded pursuant to the
procurement code. The act also provides that these contractors shall not be eligible for a sole
source or small purchase contract.
Clarifies that state agencies or political subdivisions of the state shall not accept a bid or proposal
from a person who participated in the preparation of specifications, qualifications, evaluation
criteria on which the specific competitive bid or proposal was based.
Prohibits certain business sales from public officers or employees and their families or a business
in which they have a substantial interest, to a state agency where they are employed.
Restricts public officers, employees and their families and businesses from conducting business
with employees supervised by them, or when they have regulatory authority over the employee
or another public officer.
Prohibits public officers or employees from receiving a commission from sales or transactions to
persons when they have regulatory authority over the person.
Prohibits public officers and employees from accepting employment or an offer of contract from
a person when they have regulatory authority over the person.
Prohibits public officers and employees from coercing state officers or employees to pay or
contribute to a party, committee, organization, agency or person for a political purpose. It
further prohibits threatening to deny a promotion or pay increase because of the person’s vote,
failure to make payment to a political fund, failure to buy tickets to political fundraisers or
failure to participate in political activities.
Prohibits violating the officers or employees duty to not use or not allow use of state property.
Requires disclosure to the Secretary of State (SOS) of all outside employment engaged in by an
officer or employee other than the employment with the state.
FISCAL IMPLICATIONS
There will be a minimal administrative cost for statewide update, distribution and documentation
of statutory changes. Any additional fiscal impact on the judiciary will be proportional to the
enforcement of this law and commenced prosecutions and civil actions. New laws, amendments
to existing laws and new hearings have the potential to increase caseloads in the courts, thus
requiring additional resources to handle the increase.
There will be an added burden on all state agencies in order to comply with the provisions of this
bill, but they should be able to handle the requirements with existing resources.
SIGNIFICANT ISSUES
DFA notes that this bill raises several significant issues. While the language extending the
original prohibitions of the statute to family members seems straightforward enough, there are
four other major changes instituted by this legislation.
First, in the past, contracts could be awarded to employees, officers or legislators pursuant to the
pg_0003
Senate Bill 1107– Page
3
Procurement Code. Under this bill, sole sources and small purchase agreements are explicitly
removed from the methods of award. Basically, this means such contracts can only be awarded
via the request for proposals process, which is perhaps the fairest method of procurement under
the Code. This addition to the law will presumably halt award of contracts to persons directly
chosen and force a more balanced procurement process.
Second, persons covered by the legislation could not sell products or services to the agency for
which they work or to any person over whom they exert any control (through supervision, etc.).
This will presumably remove a sense of intimidation to employees feeling forced to purchase
goods or services from a supervisor.
Third, the bill will stop supervisors from forcing employees to perform political activities on the
job or to suffer job repercussions because of the way in which they vote or support political
candidates. Although such matters are covered elsewhere as well, this, too, will presumably
remove a sense of intimidation for employees and support their political freedom as guaranteed
by the Constitution and elsewhere.
Fourth, this legislation will make it mandatory for all employees or officers to disclose in writing
to their supervisors or to the Secretary of State (if they have no direct supervisor) all outside
employment (employment other than that which the person holds with the State). This section of
the legislation will appear to be overreaching and a potential invasion of privacy upon
employees' rights of free enterprise and, possibly, free expression. This language could better be
rewritten to encompass only those situations which hold a potential conflict of interest for the
employee given their particular employment with the State.
ADMINISTRATIVE IMPLICATIONS
State agencies will have added administrative responsibilities as a result of the provisions of this
bill, but they should be able to handle the requirements with existing staff.
RELATIONSHIP
SB 1107 duplicates HB 823
SB 1107 relates to:
HB 553, Contributions to State Agents & Candidates
HB 818, Public Financing of Statewide Campaigns
HB 819 Gift Act
HB 820, Legislative Campaign Funds for Office Duties
HB 821, Campaign Reporting Requirements
HB 822, State Ethics Commission Act
HB 1154, Lobbyist Filing Fees
HB 1295, Retaliation for Ethics Violation Reporting
HB 1053, Campaign Reporting Act Exception Statements
HB 1296, Investigation of Elected Officials by AG
SB 342, Candidate Withdrawal Requirements
SB 400, Contributions to State Agents & Candidates (dup HB 553)
SB 445, Extend Governmental Conduct Act
SB 588, Former Legislators as Lobbyists
pg_0004
Senate Bill 1107– Page
4
SB 671, Candidate Withdrawal Requirements (dup SB
342)
SB 796, Legislative Campaign Funds for Office Duties (dup HB 820)
SB 799, Public Financing of Statewide Campaigns (dup HB 818)
SB 800, Campaign Reporting Requirements (dup HB 821)
SB 815, State Ethics Commission Act (dup HB 822)
SB 931, Gift Act (dup HB 819)
SB 953, Lobbyist Filing Fees (dup HB 1154)
SB 1043, Whistleblower Protection Act
SB 1051, Inclusion in Governmental Conduct Act
SB 1137, Reporting of Lobbyist Compensation
SB 1177, Disclosure by Procurement Contractors
TECHNICAL ISSUES
PED provided the following:
Page 2, lines 14 – 18, excluding judges from the definition of “public offer or employee",
will exempt judges from the scope of the amendments to the Governmental Conduct Act.
But see the recent case of, State v. Maestas, 2007-NMSC-001 The Supreme Court
reversed 5 convictions for official acts prohibited under the current version of the
Governmental Conduct Act and 5 counts of criminal sexual penetration during the
commission of official acts against a municipal judge because the Act currently excludes
judges from the “public office or employee" definition.
Page 2, lines 21 – 22, adds a definition of “state agency" which does not specifically
include “departments" or “boards" and may, therefore, be considered vague. Under
Section 41-4-3 of the Tort Claims Act, “state agency means the state of New Mexico or
any of its branches, agencies, departments, boards, instrumentalities or institutions.“
Compare with the definition of “state agency" found at Section 6-1-13(C) of State Board
of Finance laws, “means the state of New Mexico or any of its branches, agencies,
departments, boards, instrumentalities, or institutions other than state educational
institutions designated by Article 12, Section 11 of the constitution of New Mexico."
The prohibitions contained in section 8 B, page 8, could be interpreted as prohibiting the
children or spouses of children from selling school or school-related (booster club) fund-
raising items such as candy bars and other items in state agencies; similarly, state agency
bulletin boards that contain the casual sale of used cars, used items, timeshares, etc. might
also be affected by this subsection’s prohibitions.
Page 10, line 7’s use of “other things of value" is ambiguous and does not give clear
notice of what this means. Unless a dollar amount is specified, some might believe that
something of low or minimal value to them is not within the scope of the subsection’s
restrictions.
Page 11, lines 4 – 9, which requires written disclosure of all outside employment ,is
burdensome and may have the unintended consequence of embarrassing and harassing
low-paid government employees who have and perhaps must frequently change more
than one outside employment, and who might choose not to disclose these jobs to their
supervisors for personal reasons. It should be recalled that violation of the Governmental
Conduct Act is a misdemeanor that carries with it a $1,000 fine. Because outside
employment is not currently a criminal act, this section will
pg_0005
Senate Bill 1107– Page
5
POSSIBLE QUESTIONS
1.
Why doesn’t this bill apply to penalties to judges.
2.
The bill imposes a duty of due diligence upon state agencies in awarding contracts
contemplated under the legislation, but what is the penalty for a failure to perform this
duty.
3.
If a contract is mistakenly awarded that should have been prohibited under this
legislation, what occurs when this is later discovered.
DW/mt