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 available 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 also 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

Leavell

DATE TYPED

2/9/2004

HB

 

 

SHORT TITLE

Compensation of Auctioneers

SB

61/aSCORC

 

 

ANALYST

Aguilar

 

REVENUE

 

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY04

FY05

 

 

Indeterminate

Recurring

State Road Fund

 

 

Indeterminate

Recurring

General Fund

(Parenthesis ( ) Indicate Revenue Decreases)

 

SOURCES OF INFORMATION

LFC Files

 

Responses Received From

New Mexico Department of Transportation (NMDOT)

Taxation and Revenue Department (TRD)

Regulation and Licensing Department (RLD)

Department of Finance and Administration (DFA)

 

SUMMARY

 

      Synopsis of SCORC Amendment

 

The Senate Corporations and Transportation Committee amendment strikes section 1 and inserts language repealing Sections 61-16-1 and 61-16-2 NMSA 1978.

 

Significant Issues

 

Section 61-16-1 NMSA 1978 removes penalty and civil liability for puffing and charging illegal fees.

Synopsis of Original Bill

 

Senate Bill 61 repeals Section 61-16-1 NMSA 1978.

 

Significant Issues

 

Section 61-16-1 NMSA 1978 deals with two specific issues:

1.      Makes it unlawful for a person who is selling at public auction articles of personal property belonging to others to bid on or to employ others (puffers) to bid on those articles.

2.      Sets the maximum fees allowable to be charged for selling personal property at public auction.

 

“Puffing” as used in this section, refers to the process of bidding up the price of a piece of personal property at auction for the purpose of artificially increasing the sale price.  The department of transportation notes this portion of the statute should be retained since it allows market forces and legitimate bidders to determine the price.  This language is contained in NMDOT auctioneering contracts.

 

NMDODT reports that this bill removes the payment percentage limits for items sold at auction.  By repealing this without any language to replace it will allow state agencies such as Public Safety, General Services and the NMDOT to dictate the commission or payment percentages on each contract without regulations, limits or standards.  This is a concern because auctioneers can be overpaid or underpaid depending on how the contract is written.

 

Present statute allows for the following fees to be charged for auction services:

·        <$200                    10%

·        $200 – $500            8%

·        >$500                      5%

 

NMDOT proposes an alternate payment commission schedule for consideration.  This schedule has been used by DOT for over 10 years.  This schedule is used for NMDOT’s annual public auction of surplus equipment, autos and heavy-duty equipment.  Although this schedule is provided for consideration, it is very important to have input from the Department of Public Safety and the General Services Department since they conduct annual auctions independent of the NMDOT.

 

TOTAL SALES (Dollar Value)                          COMMISSION

 

UP TO $100,000                                                       10.0%

$100,001 TO $200,000                                               9.5%

$200,001 TO $300,000                                               9.0%

$300.001 TO $400,000                                               8.5%

$400,001 TO $500,000                                               8.0%

$500,001 TO $600,000                                               7.5%

$600,001 TO $700,000                                               7.0%

$700,001 TO $800,000                                               6.5%

$800,001 TO $900,000                                               6.0%

$900,001 TO $1,000,000 +                                         5.5%

 

FISCAL IMPLICATIONS

 

The revenue impact is indeterminate at this time. However it is expected to be significant if caps on auctioneering fees are eliminated.

 

ADMINISTRATIVE IMPLICATIONS

 

NMDOT notes the current auctioneer contract with NMDOT will be out of compliance since its contract is still valid for another three years with the old payment percentages in place as per statute.  NMDOT is in contact with its legal office to determine if the contract would become invalid if this section is repealed.

 

PA/prr