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

SPONSOR Komadina

ORIGINAL DATE

LAST UPDATED

1/23/06

HB

SHORT TITLE EXPAND GO BOND PURPOSES

SB 86

ANALYST Schardin

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Finance and Administration (DFA)

SUMMARY

Synopsis of Bill

Senate Bill 86 amends Section 3-30-5 NMSA 1978 to allow municipal general obligation bonds

to be used for farmland preservation, conservation easements or open space preservation.

SIGNIFICANT ISSUES

DFA consulted with government bond experts, who confirmed that the amendment proposed in

Senate Bill 86 is a technique that has been used in other jurisdictions and is generally seen as an

appropriate use over voter-approved debt.

DFA also noted that sometimes municipal bonds are used to purchase real estate, while in some-

times government bonds may be used to purchase “development rights” from a land or farm

owner. According to EMNRD, a municipality who buys these “development rights” pays a land-

owner for the partial value of the land in order to protect the land from being developed for any-

thing but farming or open space.

SS/nt