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committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

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

SPONSOR Gonzales

ORIGINAL DATE

LAST UPDATED

2/21/2007

3/16/07 HB 968/aSCONC

SHORT TITLE Public Property Sale Right of First Refusal

SB

ANALYST Kehoe/Aguilar

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

FY09

Indeterminate

Recurring

Various

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Higher Education (HED)

General Services Department (GSD)

Energy, Minerals and Natural Resources Department (EMNRD)

New Mexico Correction Department (NMCD)

Public Education Department (PED)

Responses NOT Received From

Public School Facilities Authority (PSFA)

Municipal League

SUMMARY

Synopsis of SCONC Amendment

The Senate Conservation Committee amendment provides that the right of first refusal shall

remain open for 30 days from the date of the last publication date of the offer. The amendment

further provides that “if two or more state agencies timely accept the offer, the offering state

agency shall sell, trade or lease the real property to the agency that conducts state business on

property located nearest to the real property being disposed of. If the primary office location of

all agencies that timely accept the offer are equidistant to the property, the property shall be sold

to the state agency as determined by lot, subject to ratification and approval by the Legislature."

House Bill 968/aSCONC – Page

2

Synopsis of Bill

House Bill 968 provides for state agencies, local public bodies and school districts be given the

right of first refusal before the sale, trade or lease of certain public property.

The bill also adds those sections amended in this bill to those affected by notwithstanding

language regarding the right of first refusal when selling real property that is located within the

boundaries of that community land grant as shown in the United States patent to the grant.

FISCAL IMPLICATIONS

The General Services Department notes the net proceeds from sale of tangible personal property

would be reduced by the cost to appraise tangible personal property. The net proceeds for sale of

real property would be reduced by publication costs. This requirement could reduce the

appraised value of real property since it creates an encumbrance on the marketability of property.

SIGNIFICANT ISSUES

The bill would require publishing the offer twice a month for two months in the New Mexico

register. A state agency desiring to accept the offer would comply with applicable requirements

of the property control division of the General Services Department (GSD). The sale, trade or

lease would be subject to ratification and approval by the Legislature. If no state agency accepts

the offer within 30 days of the last publication date of the offer, the offering agency may proceed

with its original plans and would seek legislative ratification and approval

The bill provides that these new requirements would not apply when giving the board of trustees

of a land grant the right of first refusal. This includes real property that is submitted for sale,

trade or lease of twenty-five years or more in duration which requires legislative approval.

TECHNICAL ISSUES

GSD notes that most state agencies do not have statutory authority to acquire real property. The

Legislature may wish to clarify that sales would be limited to state agencies statutorily

authorized to own real property.

Section 13-6-2.1 requires that for property disposals greater than $25.000 but less than $100.000,

an agency must seek Board of Finance approval. This section states that the right of first refusal

is offered to “state agencies, local public bodies, and school districts." Whereas Section 13-6-3,

requiring legislative approval of transactions in excess of $100.000, as written (under B) only

state agencies have the right of first refusal.

PA/mt