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F I S C A L I M P A C T R E P O R T

SPONSOR Smith

DATE TYPED 1/31/05

HB

SHORT TITLE

Disclosure – Real Property Sales Prices and

Other Considerations

SB 175

ANALYST Hadwiger

APPROPRIATION

(in $000s)

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

none

Indeterminate

Counties

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Taxation and Revenue Department (TRD)

No comments were received from the Department of Finance and Administration, New Mexico

Municipal League, or New Mexico Association of Counties at the time this FIR was prepared.

SUMMARY

Synopsis of Bill

Under current statute, when any property is transferred, the person who files the deed is required

to file an affidavit with the county assessor that identifies the names of the sellers and buyers of

the property, legal description of the property, value and description of personal property in-

cluded in the sale price, and full consideration paid for the property. The information is to be

used only for analytical and statistical purposes.

Senate bill 175 would apply this requirement only to residential real property. It would clarify

that the responsible person could be the transferor or transferor’s authorized agent or the trans-

feree or the transferee’s authorized agent. SB175 would also clarify that the affidavit should

show “any amount of seller incentives” as well as money and other things of value paid for the

property. The bill would add a requirement that county assessors return a copy of the affidavit

marked with the date of receipt to the person who presented the affidavit.

Senate Bill 175 -- Page 2

FISCAL IMPLICATIONS

The requirement to return copies of the affidavit to the person who presented the original affida-

vit will result in additional costs to county assessors for printing and postage.

OTHER SUBSTANTIVE ISSUES

The Taxation and Revenue Department identified the following considerations with regard to

SB175:

1) Some county assessors have assumed that the disclosure statute enacted in 2003 applies only

to residential property, while others have assumed that it does not. By clarifying the issue, the

proposed measure would tend to make assessment procedures around the state more uniform.

2) Section 7-28-12.1 NMSA currently states that affidavits are not part of valuation records of

assessors, and that county assessors are required to retain them as confidential records "only for

analytical and statistical purposes in the application of appraisal methods". Section 7-28-12.1

stipulates that an employee of the Taxation and Revenue Department or any other person subject

to provisions of 7-38-12.1 who releases information in violation of the section is guilty of a mis-

demeanor. Hence the effect of the proposed legislation would be to deny access to the informa-

tion only to public officials. Current statutes prevent access to the information by individuals not

employed by government agencies.

3) Residential property is defined in Section 7-35-2J NMSA 1978 as:

“...property consisting of one or more dwellings together with appurtenant struc-

tures, the land underlying both the dwellings and the appurtenant structures and a

quantity of land reasonably necessary for parking and other uses that facilitate the

use of dwellings and appurtenant structures; as used in this subsection, “dwell-

ings” includes both manufactured homes and other structures when used primarily

for permanent habitation, but the term does not include structures when used pri-

marily for temporary or transient habitation such as hotels, motels and similar

structures...”

Hence, for example, vacant land in residential subdivisions that is zoned for residential use is

considered nonresidential under current statute. Provisions of the proposed measure would thus

apply to vacant land in residential subdivisions.

4) The proposed language substitutes the term “person” with a fuller definition of “transferor or

the transferor’s authorized agent or a transferee or the transferee’s authorized agent”. The new

specificity in the language clarifies that either the seller or buyer, whomever is recording the

deed, is responsible for compliance with the disclosure requirements. The proposed legislation

also ensures that there is disclosure of the full consideration exchanged. This is done by adding

language that the affidavit must disclose not only the money or value exchanged, but also, “the

terms of the sale including any amount of seller incentives.” Finally, the legislation provides

administrative guidance by stating that the original affidavit is maintained by the county asses-

sor, with a conformed copy returned to the affiant.

Senate Bill 175 -- Page 3

POSSIBLE QUESTIONS

1.

How do county assessors use the information provided in these affidavits.

2.

Why should commercial properties be treated differently than residential properties.

Why would information about commercial properties be less useful for analytical and sta-

tistical purposes than information about residential properties.

DH/yr