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

SPONSOR Rawson

ORIGINAL DATE

LAST UPDATED

02/01/07

HB

SHORT TITLE Church Property Right Adjudications

SB 230

ANALYST Hanika Ortiz

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Attorney General’s Office (AGO)

Administrative Office of the Courts (AOC)

SUMMARY

Synopsis of Bill

Senate Bill 230 enacts an Act that will require courts apply “neutral principles of law" when

resolving church property disputes. The bill will also govern the determination as to whether a

trust affecting church property has in fact been created during a dispute. This legislation is

intended to free civil courts from entanglement in questions of religious doctrine.

FISCAL IMPLICATIONS

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

of statutory changes.

SIGNIFICANT ISSUES

The language dealing with trusts in this bill arises from disputes in which one party asserts an

“implied trust theory". This theory asserts that a local church accepts and holds local church

property for the benefit of the entire membership of the hierarchical church and is impliedly

bound to hold its church property as a charitable trust for the benefit of the specific religious use

in effect at the time it acquired the property.

Senate Bill 230 – Page

2

The AGO reports that the bill adopts the “neutral principles of law" method of resolving property

disputes which arise between different factions in a religious organization. The disputes often

arise when one faction seeks to break from another and the question of who owns church

property leads to litigation in state courts. The method adopted in this bill was approved by the

United Supreme Court in Jones v. Wolf, 443 U.S. 595 (1979) and allows a state to use generally

applicable neutral principles of state law to resolve church property disputes without violating

the United States Constitution. A state need not defer to religious authority in resolving church

property disputes. The sources to be used to settle such disputes are the deeds to church property,

the articles of incorporation of the local church, the state statutes, and the rules of the general

church organization. The primary advantages of the neutral principles approach are that it is

completely secular in operation, and yet flexible enough to accommodate all forms of religious

organization and polity.

The AOC further reports that requiring New Mexico courts to apply certain principles of law

may infringe upon the independent judgment and power of the judiciary. This interference, in the

Court’s opinion, is prohibited under the New Mexico Constitution in Article III, Section 1:

“The powers of the government of this state are divided into three distinct branches – the

legislative, executive and judicial – and no person or collection of persons charged with the

exercise of powers properly belonging to one of these departments, shall exercise any powers

properly belonging to either of the others, except as in this constitution otherwise expressly

directed or permitted."

AHO/csd