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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

2/25/2007

3/11/2007 HB 1268/aHBIC

SHORT TITLE

Advertisement Material Fact Disclosure

SB

ANALYST Moser/Baca

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

$0.1

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Administrative Office of the Courts (AOC)

SUMMARY

Synopsis of HBIC Amendment

The House Business and Industry amendment adds “except as other wise required by federal

law" to the disclosure of material facts and conditions requirements in the bill.

Synopsis of Original Bill

House Bill 1268 amends Section 57-15-2 NMSA 1978 to require the disclosure of a material fact

or prescribed condition of use of an advertised product or service. The Bill provides that the

required information may be disclosed in full or through the provision of an internet web site

address or a toll-free telephone number in the advertisement. The Bill also provides, as an

amendment to the Unfair Practices Act, Section 57-12-1 et. seq. NMSA 1978, that a seller may

disclose a material fact or prescribed condition of use by internet web site or by toll-free number.

FISCAL IMPLICATIONS

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

of statutory changes. The additional, as yet undetermined, fiscal impact on the judiciary would

House Bill 1268/aHBIC – Page

2

be proportional to the enforcement of this law and commenced civil actions. 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

HB 1268 places an affirmative duty upon an advertiser to disclose material facts and conditions

of use. Under the current Section 57-15-2 NMSA 1978, the extent to which advertising fails to

reveal facts material in the light of representations or to disclose prescribed conditions of use is a

factor to take into account in determining whether advertising is false.

According to the AOC this Bill leaves advertisers open to civil penalties for failing to include

required material facts and conditions of use in the advertisement in full or on a web site or

through a toll-free number. This Bill could result in an increase in actions brought by the AG or

a DA under Sections 57-15-4 and 57-12-8 NMSA 1978, or by a private citizen seeking an

injunction under Section 57-15-5 NMSA 1978 or for an injunction or damages under Section 57-

12-10 NMSA 1978.

GM/nt