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

SPONSOR Griego

ORIGINAL DATE

LAST UPDATED

2-9-06

HB

SHORT TITLE

STATE LAND SALES TO LOCAL

GOVERNMENTS FIRST

SB 533

ANALYST Hadwiger

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

None

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Finance and Administration (DFA)

General Services Department (GSD)

SUMMARY

Synopsis of Bill

Senate Bill 533 would require that, if a state agency proposes to sell or dispose of real property,

the agency shall offer the property for right of first refusal to the political subdivision within

which the property is located. If the political subdivision declines the offer, the agency may dis-

pose of the property through existing mechanisms.

FISCAL IMPLICATIONS

There is no direct fiscal impact from this bill.

SIGNIFICANT ISSUES

GSD noted that this bill would preclude property exchanges that are beneficial to the state. For

example, a private company is developing land in the vicinity of the Santa Teresa border cross-

ing in Dona Ana County, which includes a new road that would allow vehicles to by-pass the

state port-of-entry where vehicle safety inspection is conducted and fees are collected. The pro-

posed solution is to trade the existing state port-of-entry site for privately-owned property imme-

Senate Bill 533 – Page 2

diately adjacent to the federal border crossing so vehicles would not be able to avoid safety in-

spection and fee collection.

GSD added that the bill is silent on the time political subdivisions would be allowed to exercise

the first right of refusal, which could significantly delay disposal of real property declared sur-

plus and unusable by the State. Also, if two political subdivisions in which property is located

(city and county) are interested in the property, the bill is silent about which entity would have

the first right of first refusal.

DFA noted that Section 11-6-3 NMSA 1978 defines: '"political subdivision" to include any

county; incorporated city, town or village; drainage, conservancy, irrigation, water and sanitation

or other district; mutual domestic association; public water cooperative association; or commu-

nity ditch association.' DFA was concerned that the intent of the legislation may not include all

of these entities.

ALTERNATIVES

GSD suggested one alternative might be to require that local public bodies be notified to ensure

their opportunity to compete for property that is determined to be unusable.

AMENDMENTS

DFA reiterated that Section 11-6-3 NMSA 1978 defines: '"political subdivision" means any

county; incorporated city, town or village; drainage, conservancy, irrigation, water and sanitation

or other district; mutual domestic association; public water cooperative association; or commu-

nity ditch association.' The bill sponsor may want to consider whether to more narrowly define

the intended political subdivisions through amendment.

GSD recommended four amendments be considered:

•

On page 2, line 3, after the first occurrence of the word “property”, insert the words “deter-

mined to be unusable by the state”.

•

Section 1B, second clause should be amended to read “the agency shall give to the political

subdivision within which the property is located the right of first refusal to acquire the prop-

erty.”

•

Section 1(B) should be amended to clarify which political subdivision is to be given the right

of first refusal, a municipality or the county since a property can be located in both political

subdivisions.

•

It is not clear what is intended by “negotiation” in Section ( C ) 1 and 2. The intent of the

statute is to provide for the disposition of property, a negotiation is a process used to reach a

disposition of property, not the disposition itself. What method of disposition, sale, trade,

etc. should be specified.

•

The phrase “negotiated sale” was deleted in Section (C) 1 and 2, but remains in Section ( C)

(3). It is not clear if this was intended or a typographical error.

DH/yr