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State v. Public Employees Retirement Board

November 22, 1995


ORIGINAL PROCEEDING ON CERTIORARI. Joe Cruz Castellano, District Judge.

Released for Publication December 8, 1995.

Stanley F. Frost, Justice. Joseph F. Baca, Chief Justice, Richard E. Ransom, Justice, Gene E. Franchini, Justice, concur. Pamela B. Minzner, Justice, not participating.

The opinion of the court was delivered by: Frost

FROST, Justice.

Defendants-Petitioners appeal from the Court of Appeals decision finding the Legislative Retirement Plan, NMSA 1978, §§ 10-11-39 to -43 (Repl. Pamp. 1992), unconstitutional. The Court of Appeals held that legislative retirement benefits constituted compensation in violation of Article IV, Section 10 of the New Mexico Constitution, which proscribes payment of any other compensation to legislators beyond their per diem and mileage allowance. State ex rel. Udall v. Public Employees Retirement Bd., 118 N.M. 507, 511, 882 P.2d 548, 552 (Ct. App. 1994). Weissueda writ of certiorari, see NMSA 1978, § 34-5-14(B)(3) (Repl. Pamp. 1990) (significant question of constitutional law), and we now reverse.


In 1963 the Legislature enacted the Legislative Retirement Plan (Plan). 1963 N.M. Laws, ch. 101, § 1 (codified as amended NMSA 1978, §§ 10-11-39 to -43 (Repl. Pamp. 1992)). The current version of the Plan requires that a legislator contribute $100 per year in order to earn service credits and receive benefits. Section 10-11-42. Participation in the Plan is voluntary. Section 10-11-3(B)(1), (2). Upon retirement, a legislator is entitled to receive an annual retirement benefit of $250 multiplied by the number of years of acquired earned-service credits, if the legislator served after December 31, 1959. *fn1 Section 10-11-41(A). A legislator must acquire at least five years of earned service credits in order to be eligible for the benefits and must meet specific age requirements based on the number of years served. Section 10-11-40. Therefore, a legislator who serves only a single term is not eligible to receive retirement benefits under the Plan. *fn2

The New Mexico Constitution provides:

Each member of the legislature shall receive:

A. as per diem expense the sum of not more than seventy-five dollars ($75.00) for each day's attendance during each session, as provided by law, and twenty-five cents ($.25) for each mile traveled in going to and returning from the seat of government by the usual traveled route, once each session as defined by Article 4, Section 5 of this constitution;

B. per diem expense and mileage at the same rates as provided in Subsection A of this section for service at meetings required by legislative committees established by the legislature to meet in the interim between sessions; and

C. no other compensation, perquisite or allowance.

N.M. Const. art. IV, § 10. Although the per diem and mileage allowances have periodically been increased, the prohibition against receiving other compensation has remained unchanged since its initial adoption by the framers of our Constitution in 1911.

The constitutionality of the Plan was first challenged by a group of taxpayers in 1976. However, the suit was dismissed for lack of standing. Eastham v. Public Employees' Retirement Ass'n Bd., 89 N.M. 399, 406, 553 P.2d 679, 686 (1976). In 1987 the Attorney General commenced this action against the Public Employees Retirement Board (PERB) and various current and former members of the Legislature who participated in the Plan. The Attorney General argued that the Plan violated Article IV, Section 10 of the New Mexico Constitution and sought injunctive relief both barring future payments by PERB under the Plan and requiring repayment of disbursements already made to retired legislators.

In 1988 the district court held the Plan unconstitutional and ordered PERB to stop making payments to retired legislators under the Plan. Several defendants appealed from the order. The Court of Appeals, however, dismissed the appeal on the ground that the trial court's order was not a final, appealable order because it did not resolve the Attorney General's claim for restitution of payments already made and the Court remanded the case. Prior to the remand, however, a new district Judge had succeeded the Judge who originally issued the order. On remand, the successor district Judge vacated the original order because the Attorney General had failed to join certain indispensable parties. The Judge allowed the joinder of the additional parties and, in 1993, issued a new order ruling that the Plan was constitutional.

The Attorney General appealed both the decision to vacate the 1988 order and the subsequent ruling that the Plan was constitutional. The Court of Appeals upheld the district court's authority to vacate the 1988 order but reversed the court's holding on the constitutionality of the Plan. Udall, 118 N.M. at 511, 882 P.2d at 552. The legislators participating in the Plan then filed a petition for writ of certiorari challenging the Court of Appeals' Conclusion that the Plan was unconstitutional. We granted the petition and issued the writ of certiorari to review the constitutional issue. State ex rel. Udall v. Public Employees Retirement Bd., 118 N.M. 695, 884 P.2d 1174 (1994).


As we noted in Espanola Housing Authority v. Atencio, 90 N.M. 787, 788, 568 P.2d 1233, 1234 (1977), "It is well settled that there is a presumption of the validity and regularity of legislative enactments." Indeed, we must uphold such enactments unless we are satisfied beyond all reasonable doubt that the Legislature went outside the bounds fixed by the Constitution in enacting the challenged legislation. Id.; State v. Ball, 104 N.M. 176, 178, 718 P.2d 686, 688 (1986); State v. Trivitt, 89 N.M. 162, 167, 548 P.2d 442, 447, (1976); City of Raton v. Sproule, 78 N.M. 138, 142, 429 P.2d 336, 340 (1967). *fn3 It is not the province of this Court to inquire into the wisdom or policy of an act of the Legislature. Atencio, 90 N.M. at 788, 568 P.2d at 1234. With this standard of review in mind, we turn to the merits of the constitutional challenge.

A. Standards Employed in Other Jurisdictions

The question before us is whether the terms "compensation, perquisite or allowance" encompass legislative retirement benefits. Although there is no New Mexico case specifically addressing this question, there are several cases from other jurisdictions which are directly on point.

In Brown v. Meyer, 787 S.W.2d 42 (Tex. 1990), the Supreme Court of Texas confronted a similar question of constitutional interpretation. Brown, while acting as a State Senator, voted to increase the salaries of district court Judges. Id. at 43. Because the retirement benefits paid to qualified elected officials in Texas were indexed to the salaries of state Judges, the Senate vote had the effect of increasing retirement benefits for elected state officials. Brown then left the State Senate and attempted to run for the position of State Attorney General. Id. If he became Attorney General, Brown eventually may have been eligible to receive the retirement benefits that he had just voted to increase. However, the Texas Constitution provided that a state legislator is not eligible to run for a state office "the emoluments of which may have been increased" during that legislator's term. *fn4 Id. at 44.

The Brown court examined whether retirement benefits constituted "emoluments" to determine whether the constitutional provision affected Brown's eligibility for the office of Attorney General. It held that the term emoluments, as used in the constitution, meant "only actual pecuniary gain and not contingent and remote benefit." Id. at 45. The court explained,

Whether a party will actually receive a retirement benefit is dependent on numerous variables. An employee must agree to participate in the program, requiring withholding of salary. . . . Also, the employee must accumulate the requisite number of years "service credit" before any benefit can vest. In the case of an elected official, this will generally require not only serving a full term, but also reelection to office. And the official must remain alive until the earliest time that benefits may vest.

Id. The Brown court therefore concluded that "retirement benefits for legislators and other elected officials are not embraced within the term 'emoluments' as used in [the constitution]." Id.

Another leading case which evaluated whether retirement benefits were encompassed within a similar constitutional provision is State ex rel. Todd v. Reeves, 196 Wash. 145, 82 P.2d 173 (Wash. 1938) (en banc). In Reeves the plaintiffs challenged a State Senator's qualifications to run for the Washington Supreme Court because the Legislature had enacted a retirement system for the judiciary. 82 P.2d at 174. The Washington State Constitution had a provision similar to that found in the Texas Constitution, prohibiting a legislator from running for an office after increasing the "emoluments" of that office. Id. The Reeves court noted that "emolument" is generally defined as "profit from office, employment, or labor; compensation; fees or salary." 82 P.2d at 175 (referring to a dictionary ...

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