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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 presidentís 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.
pg_0002
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 governorsí 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