0001|                           SENATE BILL 406
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0002|     43rd legislature - STATE OF NEW MEXICO - first session, 1997
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0003|                            INTRODUCED BY
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0004|                           MANNY M. ARAGON
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0005|     
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0006|                                   
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0007|     
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0008|     
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0009|     
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0010|                                AN ACT
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0011|     RELATING TO HOUSING; ENACTING THE LAND TITLE TRUST FUND ACT;
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0012|     CREATING A FUND AS A SOURCE FOR LOANS AND GRANTS TO MAKE
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0013|     HOUSING MORE ACCESSIBLE FOR LOW-INCOME PERSONS; PROVIDING FOR
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0014|     INTEREST EARNED ON CERTAIN LAND TITLE INDUSTRY ACCOUNTS TO BE
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0015|     PAID INTO THE FUND; CREATING AN ADVISORY COMMITTEE; AMENDING A
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0016|     SECTION OF THE NMSA 1978; MAKING AN APPROPRIATION; DECLARING AN
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0017|     EMERGENCY.
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0018|     
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0019|     BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0020|          Section 1.  [<u>NEW MATERIAL</u>]  SHORT TITLE.--Sections 1
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0021|     through 8 of this act may be cited as the "Land Title Trust
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0022|     Fund Act".
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0023|          Section 2.  [<u>NEW MATERIAL</u>]  DEFINITIONS.-- As used in
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0024|     the Land Title Trust Fund Act:
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0025|               A.  "committee" means the land title trust fund
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0001|     advisory committee;
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0002|               B.  "depository institution" means any bank, savings
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0003|     and loan association or credit union authorized by federal or
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0004|     state law to do business in New Mexico and insured by the
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0005|     federal deposit insurance corporation or the national credit
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0006|     union administration;
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0007|               C.  "division" means the financial institutions
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0008|     division of the regulation and licensing department;
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0009|               D.  "eligible organization" means a nonprofit
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0010|     corporation whose primary purpose is to provide affordable
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0011|     housing and that is qualified for tax exemption under Section
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0012|     501(c)(3) of the Internal Revenue Code of 1986, as amended; a
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0013|     unit of state or local government dealing with housing; a local
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0014|     or regional housing authority or a tribal agency dealing with
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0015|     housing;
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0016|               E.  "fund" means the land title trust fund;
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0017|               F.  "low-income persons" means a household
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0018|     consisting of a single individual, a family or unrelated
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0019|     individuals living together if the household's total annual
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0020|     income does not exceed eighty percent of the median income for
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0021|     the area, as determined by the United States department of
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0022|     housing and urban development, and as adjusted for family size
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0023|     or other income ceiling determined for the area on the basis of
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0024|     that department's findings that such variations are necessary
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0025|     because of prevailing levels of construction costs or fair
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0001|     market rents or unusually high or low family incomes;
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0002|               G.  "pooled interest-bearing transaction account"
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0003|     means a trust or escrow account made available by a depository
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0004|     institution in the form of a negotiable order of withdrawal
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0005|     account, sweep account or other interest-bearing account;
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0006|               H.  "title company" means a title insurer or title
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0007|     insurance agent as defined in and regulated pursuant to the New
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0008|     Mexico Title Insurance Law; and
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0009|               I.  "trustee" means the New Mexico mortgage finance
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0010|     authority.
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0011|          Section 3.  [<u>NEW MATERIAL</u>]  LAND TITLE TRUST FUND
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0012|     CREATED.--The "land title trust fund" is created.  The New
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0013|     Mexico mortgage finance authority shall be the trustee for the
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0014|     fund.
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0015|          Section 4.     [<u>NEW MATERIAL</u>]  TRUST ACCOUNTS--ESCROW
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0016|     ACCOUNTS--POOLED INTEREST-BEARING TRANSACTION ACCOUNTS--
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0017|     DISPOSITION OF EARNED INTEREST ON CERTAIN ACCOUNTS.--
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0018|               A.  A title company that maintains one or more trust
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0019|     accounts or escrow accounts into which customer funds are
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0020|     deposited for use in the purchase, sale or financing of real
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0021|     property located in New Mexico may maintain one or more pooled
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0022|     interest-bearing transaction accounts and may deposit customer
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0023|     funds into those accounts, except for funds required to be
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0024|     deposited into interest-bearing accounts or investments under
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0025|     instructions from one or more of the parties to a transaction
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0001|     that provide for the payment of interest to be earned on the
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0002|     deposited funds to a person other than the title company.  A
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0003|     pooled interest-bearing transaction account established
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0004|     pursuant to the provisions of this section shall be maintained
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0005|     in the name of the title company, but the trustee shall be
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0006|     named and shown as the beneficial owner of the account income
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0007|     or interest.  A title company maintaining one or more pooled
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0008|     interest-bearing transaction accounts shall not be paid or
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0009|     receive any interest earned on funds deposited in the accounts
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0010|     except for the purpose of remitting net earned interest to the
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0011|     trustee pursuant to the provisions of this section.
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0012|               B.  The interest earned on customer funds deposited
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0013|     in a pooled interest-bearing transaction account pursuant to
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0014|     the requirements of Subsection A of this section, net of any
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0015|     service charges and fees that a depository institution charges
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0016|     to regular, non-title company depositors and net of any
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0017|     reasonable charge for preparation and transmittal of any
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0018|     required report pursuant to the provisions of Subsection F of
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0019|     this section, shall be remitted monthly or quarterly either
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0020|     directly to the fund or to the title company for its remittance
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0021|     to the fund.  
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0022|     Alternatively, the depository institution may credit the title
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0023|     company account with the net interest earned either monthly or
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0024|     quarterly.  Interest accrued after deducting the allowable
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0025|     charges and fees shall be treated as interest earned by the
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0001|     trustee and reported as such by the depository institution.
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0002|               C.  The provisions of this section shall not change
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0003|     existing duties or obligations of a title company under other
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0004|     laws to safeguard and account for funds held for customers.
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0005|               D.  Funds in each pooled interest-bearing
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0006|     transaction account shall be subject to withdrawal upon request
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0007|     and without delay, subject only to the notice period the
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0008|     depository institution is required to observe by law or
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0009|     regulation.
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0010|               E.  The rate of interest payable on a pooled
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0011|     interest-bearing transaction account shall not be less than the
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0012|     rate customarily paid by the depository institution to regular,
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0013|     non-title company depositors for similar accounts.  Interest
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0014|     shall be computed in accordance with the depository
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0015|     institution's standard accounting practice.  Higher rates
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0016|     offered by the depository institution to customers whose
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0017|     deposits exceed certain time or quantity minima, such as those
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0018|     offered in the form of certificates of deposit, may be obtained
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0019|     by the title company on some or all of the deposited funds so
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0020|     long as there is no impairment of the right to withdraw or
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0021|     transfer principal, subject only to the notice period the
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0022|     depository institution is required to observe by law or
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0023|     regulation.
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0024|               F.  A depository institution or title company making
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0025|     a remittance of interest to the fund shall at the time of the
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0001|     remittance transmit a report to the trustee for each account
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0002|     from which remittance is made showing:
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0003|                    (1)  the name of the title company maintaining
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0004|     the account from which remittance is made;
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0005|                    (2)  the rate of interest used to compute the
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0006|     earned interest and the amount of earned interest;
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0007|                    (3)  the amount, if any, of depository
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0008|     institution service charges and fees deducted and any charge
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0009|     for the preparation and transmittal of the report; and
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0010|                    (4)  the account balance as of the ending date
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0011|     of the reporting period.
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0012|               G.  If the depository institution remits to the
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0013|     title company or credits the title company account, it shall
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0014|     make the remittance or credit no later than ten days after the
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0015|     statement cutoff for that account.  The title company shall
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0016|     remit to the fund and shall send the report with the remittance
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0017|     no later than thirty days after receipt of the remittance or
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0018|     credit by the depository institution.
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0019|               H.  Remittances to the fund shall be made at least
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0020|     quarterly, no later than ten days after the statement cutoff
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0021|     for that account if made by the depository institution and no
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0022|     later than thirty days after receipt of remittance or credit
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0023|     from the depository institution if made by the title company.
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0024|               I.  The division shall adopt and promulgate rules
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0025|     and regulations regarding the obligations of depository
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0001|     institutions pursuant to the provisions of the Land Title Trust
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0002|     Fund Act.
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0003|          Section 5.  [<u>NEW MATERIAL</u>]  USE OF MONEY--ELIGIBLE
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0004|     ACTIVITIES.--Money from the fund and other sources may be used
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0005|     to finance in whole or in part any loans or grant projects that
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0006|     will provide housing for low-income persons and for other uses
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0007|     specified in this section.  Money deposited into the fund may
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0008|     be used annually as follows:
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0009|               A.  no more than seven percent of the fund shall be
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0010|     used for expenses of administering the fund;
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0011|               B.  no less than twenty percent of the fund shall be
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0012|     invested in a permanent capital fund, the interest on which may
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0013|     be used for purposes specified in this section;
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0014|               C.  no less than fifty percent of the fund shall be
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0015|     allocated to eligible organizations to make housing more
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0016|     accessible to low-income persons; and
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0017|               D.  the remaining balance may be allocated to
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0018|     eligible organizations for other housing-related programs for
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0019|     the benefit of the public as specifically approved by the
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0020|     trustee from time to time.
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0021|          Section 6.  [<u>NEW MATERIAL</u>]  CONFLICT WITH FEDERAL
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0022|     REQUIREMENTS.--If any part of the Land Title Trust Fund Act is
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0023|     found to be in conflict with federal requirements that are a
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0024|     prescribed condition to the allocation of federal funds to the
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0025|     state, the conflicting part of that act is inoperative solely
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0001|     to the extent of the conflict and with respect to the agencies
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0002|     directly affected, and this finding does not affect the
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0003|     operation of the remainder of that act in its application to
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0004|     the agencies concerned.  The rules adopted pursuant to the
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0005|     provisions of the Land Title Trust Fund Act shall meet those
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0006|     federal requirements that are a necessary condition to the
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0007|     receipt of federal funds by the state.
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0008|          Section 7.  [<u>NEW MATERIAL</u>]  MATCHING FUNDS.--Money from
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0009|     the fund may be used to match federal, local or private money
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0010|     to be used for projects authorized under the Land Title Trust
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0011|     Fund Act.
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0012|          Section 8.  [<u>NEW MATERIAL</u>]  LAND TITLE TRUST FUND
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0013|     ADVISORY COMMITTEE CREATED--FUNCTIONS.--
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0014|               A.  The "land title trust fund advisory committee"
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0015|     is created.  The committee shall consist of seven persons:
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0016|                    (1)  the chairman of the trustee or his
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0017|     designee, who shall serve as chairman of the committee;
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0018|                    (2)  two representatives of the land title
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0019|     industry appointed by the governor;
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0020|                    (3)  one representative of the banking industry
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0021|     and one representative of the real estate industry appointed by
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0022|     the president pro tempore of the senate; and
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0023|                    (4)  one representative of the mortgage lending
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0024|     industry and one representative of the real estate industry
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0025|     appointed by the speaker of the house of representatives.
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0001|               B.  Of the first committee members appointed, two
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0002|     shall be appointed for terms of five years, two shall be
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0003|     appointed for terms of four years and two shall be appointed
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0004|     for terms of three years.  Thereafter, appointed members shall
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0005|     be appointed for terms of five years.  Members shall serve at
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0006|     the pleasure of their respective appointing authorities, and
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0007|     vacancies shall be filled by the appropriate appointing
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0008|     authority.  Any member of the committee shall be eligible for
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0009|     reappointment.
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0010|               C.  The committee shall be advisory to the trustee
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0011|     and shall be subject to oversight by the Mortgage Finance
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0012|     Authority Act oversight committee.
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0013|               D.  The committee shall review all project
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0014|     applications and make recommendations to the trustee for
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0015|     funding them.  The committee shall not be involved in or
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0016|     advisory to the trustee in matters relating to the investment
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0017|     of the fund.
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0018|               E.  The committee shall adopt and promulgate rules
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0019|     and regulations regarding:
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0020|                    (1)  the time, place and procedures of
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0021|     committee meetings;
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0022|                    (2)  the procedures for the review of and
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0023|     standards for recommending applications for loans or grant
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0024|     projects; and 
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0025|                    (3)  the obligations of title companies
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0001|     pursuant to the provisions of the Land Title Trust Fund Act.
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0002|          Section 9.  Section 58-18B-3 NMSA 1978 (being Laws 1994,
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0003|     Chapter 146, Section 3) is amended to read:
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0004|          "58-18B-3.  DEFINITIONS.--As used in the Low-Income
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0005|     Housing Trust Act:
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0006|               A.  "appropriate financial institution service
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0007|     charges and fees" means those service charges and fees that a
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0008|     financial institution charges its customers on demand deposit
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0009|     accounts;
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0010|               B.  "division" means the financial institutions
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0011|     division of the regulation and licensing department;
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0012|               C.  "escrow closing agent" means an escrow agent
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0013|     <s>[or insurer or title insurance]</s> <u>other than a title</u> company
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0014|     that acts in the normal course of business as the agent of the
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0015|     seller and buyer of real estate for the purpose of consummating
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0016|     a sale, including but not limited to the performance of the
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0017|     following functions:
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0018|                    (1)  preparation of deeds, mortgages,
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0019|     promissory notes, deeds of trust, real estate contracts,
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0020|     assignments or other documents incidental to the sale as
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0021|     permitted by law;
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0022|                    (2)  calculations and disbursements of prorated
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0023|     taxes, insurance premiums, utility bills and other charges
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0024|     incidental to the sale;
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0025|                    (3)  preparation of sellers' and buyers'
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0001|     closing statements;
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0002|                    (4)  supervision of signing of documents;
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0003|                    (5)  collection and disbursement of down
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0004|     payments, realtors' commissions, fees and other charges
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0005|     pursuant to a sales agreement; and
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0006|                    (6)  recordation of documents;
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0007|               D.  "escrow servicing agent" means any person who in
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0008|     the normal course of business collects and disburses funds
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0009|     received from real estate-related financing instruments on
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0010|     behalf of a lender or borrower;
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0011|               E.  "first-time home buyer" means:
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0012|                    (1)  an individual or the individual's spouse
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0013|     who has not owned a home other than a manufactured home during
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0014|     the three-year period prior to the purchase of a home; or
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0015|                    (2)  any individual who is a displaced
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0016|     homemaker or a single parent;
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0017|               F.  "fund" means the low-income housing trust fund
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0018|     created pursuant to the provisions of the Low-Income Housing
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0019|     Trust Act;
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0020|               G.  "low-income persons" means a household
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0021|     consisting of a single individual or a family or unrelated
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0022|     individuals living together when the household's total annual
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0023|     income does not exceed eighty percent of the median income for
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0024|     the area, as determined by the United States department of
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0025|     housing and urban development and as adjusted for family size,
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0001|     or other income ceiling determined for the area on the basis of
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0002|     that department's findings that such variations are necessary
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0003|     because of prevailing levels of construction costs or fair
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0004|     market rents or unusually high or low family incomes;
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0005|          H.  "person" means an individual or any other legal
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0006|     entity; and
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0007|          I.  "property manager" means a person who acts in the
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0008|     normal course of business as the agent for the owner of real
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0009|     property for the purpose of property rental, leasing and
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0010|     management."        
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0011|          Section 11.  EMERGENCY.--It is necessary for the public
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0012|     peace, health and safety that this act take effect immediately.
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0013|                                    
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0014|   
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0015|                      FORTY-THIRD LEGISLATURE
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0016|                        FIRST SESSION, 1997
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0017|   
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0018|   
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0019|                                               February 24, 1997
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0020|   
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0021|   Mr. President:
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0022|   
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0023|       Your PUBLIC AFFAIRS COMMITTEE, to whom has been
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0024|   referred
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0025|   
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0001|                          SENATE BILL 406
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0002|   
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0003|   has had it under consideration and reports same with
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0004|   recommendation that it DO PASS, and thence referred to the
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0005|   FINANCE COMMITTEE.
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0006|   
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0007|                                Respectfully submitted,
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0008|   
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0009|   
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0010|   
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0011|                                
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0012|   __________________________________
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0013|                                Shannon Robinson, Chairman 
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0014|   
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0015|   
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0016|   
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0017|   Adopted_______________________   Not
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0018|   Adopted_______________________
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0019|             (Chief Clerk)                          (Chief Clerk)
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0020|   
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0021|   
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0022|                     Date ________________________
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0023|   
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0024|   
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0025|   The roll call vote was <u> 6 </u> For <u> 0 </u> Against
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0001|           Yes:    6
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0002|           No:     None
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0003|                Excused:     Vernon, Smith, Garcia
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0004|           Absent: None
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0005|   
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0006|   
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0007|   S0406PA1
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0008|   
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0009|     
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0010|   
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0011|                      FORTY-THIRD LEGISLATURE
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0012|                        FIRST SESSION, 1997
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0013|   
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0014|   
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0015|                                                   March 5, 1997
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0016|   
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0017|   Mr. President:
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0018|   
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0019|       Your FINANCE COMMITTEE, to whom has been referred
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0020|   
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0021|                          SENATE BILL 406
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0022|   
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0023|   has had it under consideration and reports same with
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0024|   recommendation that it DO PASS.
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0025|   
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0001|                                Respectfully submitted,
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0002|   
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0003|   
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0004|   
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0005|                                
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0006|   __________________________________
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0007|                                Ben D. Altamirano, Chairman 
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0008|   
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0009|   
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0010|   
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0011|   Adopted_______________________   Not
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0012|   Adopted_______________________
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0013|             (Chief Clerk)                          (Chief Clerk)
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0014|   
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0015|   
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0016|   
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0017|                     Date ________________________
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0018|   
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0019|   
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0020|   The roll call vote was <u> 6 </u> For <u> 0 </u> Against
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0021|           Yes:    6
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0022|           No:     None
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0023|                Excused:     Campos, Ingle, Lyons, McKibben, Romero
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0024|           Absent: None
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0025|   
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0001|   
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0002|   S0406FC1
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0003|                          State of New Mexico
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0004|                      House of Representatives
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0005|   
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0006|                      FORTY-THIRD LEGISLATURE
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0007|                        FIRST SESSION, 1997
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0008|   
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0009|   
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0010|                                                  March 15, 1997
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0011|   
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0012|   
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0013|   Mr. Speaker:
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0014|   
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0015|       Your BUSINESS AND INDUSTRY COMMITTEE, to whom has
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0016|   been referred
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0017|   
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0018|                       SENATE BILL 406
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0019|                               
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0020|   has had it under consideration and reports same with
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0021|   recommendation that it DO PASS, and thence referred to the
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0022|   APPROPRIATIONS AND FINANCE COMMITTEE.
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0023|   
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0024|                            Respectfully submitted,
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0025|   
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0001|   
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0002|   
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0003|                            <u>                                 
</u>    |
<u></u>0004| <u>                           </u>                        Fred Luna, Chairman
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0005|   
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0006|   
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0007|   Adopted <u>                    </u>   Not Adopted <u>                     
</u>    |
<u></u>0008| <u>  </u>
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0009|           (Chief Clerk)                      (Chief Clerk)
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0010|   
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0011|                        Date <u>            </u>
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0012|   
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0013|   The roll call vote was<u> 7 </u> For<u> 0 </u> Against
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0014|   Yes:         7
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0015|                Excused:     Alwin, Getty, Gubbels, Hobbs, Rodella, Varela
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0016|           Absent: None
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0017|   
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0018|   
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0019|   G:\BILLTEXT\BILLW_97\S0406
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