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

SPONSOR Park

ORIGINAL DATE

LAST UPDATED

2/7/07

HB 730

SHORT TITLE

Real Estate Licenses to Convicted Criminals

SB

ANALYST C.Sanchez

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to HJM 2 and SJM 4.

Conflicts with Real Estate License Law, Section 61-29-12 A (6), reasons for which the Real

Estate Commission may

refuse, suspend, revoke, limit, or condition a real estate broker’s

license..

SOURCES OF INFORMATION

LFC Files

Responses Received From

Administrative Office of the Courts (AOC)

Regulation and Licensing Department (RLD)

SUMMARY

Synopsis of Bill

House Bill 730 amends Section 28-2-4 NMSA 1978, of the Criminal Offender Employment Act

to allow a board or other agency to refuse to grant or renew or to suspend or revoke a license to

practice real estate, where the applicant, employee or licensee has been convicted of homicide,

kidnapping, trafficking in controlled substances, criminal sexual penetration or related sexual

offenses or child abuse.

House Bill 730 – Page

2

FISCAL IMPLICATIONS

There will be a minimal administrative cost for statewide update, distribution and documentation

of statutory changes. Any additional fiscal impact on the state would be proportional to

challenges to license refusals, non-renewals, suspensions and revocations pursuant to the law.

New laws, amendments to existing laws and new hearings have the potential to increase

caseloads in the courts, thus requiring additional resources to handle the increase.

SIGNIFICANT ISSUES

Section 61-29-12 A (6) governing Real Estate Broker’s and Salesmen presently gives the Real

Estate Commission authority to refuse to issue, suspend, revoke, limit or condition a license if

the applicant or licensee has been convicted in any court of competent jurisdiction of a felony or

any offense involving moral turpitude. The Commission has historically exercised this authority

on a case-by-case basis.

Section 61-29-3 governing Real Estate Broker’s and Salesmen specifies that the provisions of the

Criminal Offender Employment Act shall govern consideration of criminal records in

determining whether a real estate broker’s license shall be denied, suspended, revoked, limited,

or conditioned.

Further, Section 28-2-3 A of the Criminal Offender Employment Act states that while a

professional or occupational licensing board may take a criminal conviction into account in

determining eligibility for a professional or occupational license, such conviction shall not

operate as an automatic bar to licensure.

By prohibiting licensing boards from taking rehabilitation into account in evaluating the

suitability of an applicant or a broker convicted of one of the specified crimes to hold a real

estate broker’s license, HB730 would eliminate the Real Estate Commission’s discretion to take

rehabilitation into account in determining whether, as specified in Section 61-29-9 A, an

individual is “of good repute and competent to transact the business or a real estate broker in a

manner than safeguards the interests of the public."

CONFLICT,

HB730 conflicts with the provisions of Sections 61-29-9 and 61-29-12 A(6) to the extent that it

would appear to prohibit the Real Estate Commission the discretion to take rehabilitation into

account in determining an individual’s suitability to hold or renew a real estate broker’s license.

HB730 also appears to conflict with Section 28-2-2 of the Criminal Offender Employment Act

which says, “the legislature finds the public is best protected when criminal offenders or ex-

convicts are given the opportunity to secure employment or to engage in a lawful trade,

occupation or profession and that barriers to such employment should be removed to make

rehabilitation feasible."

House Bill 730 – Page

3

TECHNICAL ISSUES

For the reasons specified elsewhere in this analysis, a suggested amendment would be to strike

from Section 28-2-4 A (3) in HB730 the language “or a license to practice real estate".

OTHER SUBSTANTIVE ISSUES

The other licenses and authority affected under the current Section 28-2-4 – a teaching

certificate, a license to operate a child-care facility, employment at a child-care facility –

specifically involve contact with children.

HJM 2 and SJM 4 resolve that “the secretary of labor be requested to convene a task force to

review barriers to public employment for persons with criminal convictions and to make

recommendations that could remove barriers while protecting the public."

ALTERNATIVES

An alternative would be to continue to give the Real Estate Commission the discretion to take

rehabilitation into account in determining the suitability of an individual to hold a real estate

broker’s license.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

Status Quo

CS/nt