NOTE: As provided in LFC policy, this report is
intended only for use by the standing finance committees of the
legislature. The Legislative Finance Committee does not assume
responsibility for the accuracy of the information in this report when used for
other purposes.
The most recent FIR
version (in HTML & Adobe PDF formats) is available on the Legislative
Website. The Adobe PDF version includes
all attachments, whereas the HTML version does not. Previously issued FIRs and attachments may be
obtained from the LFC in
SPONSOR: |
Silva |
DATE TYPED: |
|
HB |
101 |
||
SHORT TITLE: |
Motor Vehicle or Trailer Lease |
SB |
|
||||
|
ANALYST: |
Hayes |
|||||
APPROPRIATION
Appropriation
Contained |
Estimated
Additional Impact |
Recurring or
Non-Rec |
Fund Affected |
||
FY03 |
FY04 |
FY03 |
FY04 |
|
|
|
NFI |
|
|
|
|
|
|
|
|
|
|
(Parenthesis
( ) Indicate Expenditure Decreases)
Responses
Received From
Taxation
and Revenue Department (TRD)
SUMMARY
Synopsis
of Bill
House
Bill 101 adds a section to Chapter 66, Article 3, NMSA 1978 regarding lease
agreements for a motor vehicle or trailer.
The new material states that a lease agreement does not create a sale or
security interest merely because the agreement allows the lease price to be
adjusted upward or downward with respect to the amount realized by the Lessor
upon the sale or disposition of the vehicle
Effective
date of the provisions of this bill is
Significant
Issues
1. The
bill states that if the sale or “other disposition” of a leased vehicle results
in more or less money that the original “lease price” for the vehicle or
trailer, then the dollar profit or loss will not create a security interest for
the Lessor.
2. The intent of this legislation is somewhat
unclear. Possible example: A
traveler rents a vehicle while visiting New Mexico, signs a lease agreement for
the vehicle (as required by rental car agencies), but drives extra miles or
leases the vehicle for more days than the original lease. The result would be extra fees charged to the
traveler and more profit to the rental car agency. Given that the lease agreement price has been
adjusted upward in this scenario, how does it interface with this legislation
if the Lessor later sells the vehicle?
TECHNICAL ISSUES
“Lease agreement” needs to be defined.
POSSIBLE QUESTIONS
CMH/njw