SENATE BILL 53

50th legislature - STATE OF NEW MEXICO - first session, 2011

INTRODUCED BY

Stephen H. Fischmann

AN ACT

RELATING TO STATE LANDS; PROVIDING FOR A PRIOR REVIEW BY THE STATE AUDITOR OF CERTAIN LEASES FOR REAL ESTATE PLANNING OR DEVELOPMENT PURPOSES; AMENDING AND ENACTING SECTIONS OF THE NMSA 1978.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. Section 19-1-1 NMSA 1978 (being Laws 1912, Chapter 82, Section 1, as amended) is amended to read:

     "19-1-1. STATE LAND OFFICE CREATED--COMMISSIONER--POWERS.--[Section 1.] A "state land office" is [hereby] created, the executive officer of which shall be the "commissioner of public lands", [herein after called] referred to in Chapter 19 NMSA 1978 as the "commissioner", who shall have jurisdiction over all lands owned [in this chapter] by the state, except as may be otherwise specifically provided by law, and shall have the management, care, custody, control and disposition [thereof] of such lands in accordance with the provisions of [this] Chapter 19 NMSA 1978 and the [law or] laws under which such lands have been or may be acquired."

     SECTION 2. Section 19-7-9 NMSA 1978 (being Laws 1971, Chapter 93, Section 1, as amended) is amended to read:

     "19-7-9. SALE AND LEASE OF STATE LANDS--CONVEYANCE FOR TERM OF YEARS--TERMS AND CONDITIONS.--Any state lands offered for sale by the commissioner may be sold at the commissioner's discretion for cash or upon payment of not less than one-tenth of the purchase price in cash and payment of the balance in amortized installments for any period up to thirty years with interest on the principal balance at a rate to be set by the commissioner in the notice of auction pertaining to the particular sale in advance. Additional payments on the principal may be made at any time, but such payments shall not be effective for credit until the date the next installment is due. The purchase contract shall be upon a form prescribed by the commissioner prior to publication of the notice of auction and shall contain the terms and conditions the commissioner may deem to be in the best interest of the state and consistent with law. Should a purchaser die before completing the contract, the due date of the next installment payment shall, upon written application, be deferred by the commissioner for one year. In addition, the commissioner is authorized to convey for any period of time state lands under the commissioner's jurisdiction having value for commercial development or public use purposes, provided that:

          A. all of the requirements for the disposition of lands set forth in the constitution of New Mexico and the [New Mexico] Enabling Act for New Mexico are complied with, including but not limited to those pertaining to appraisal at true value, advertising and public auction;

          B. the term and nature of the estate to be conveyed is set forth in the public notice of auction pertaining to the particular conveyance; and

          C. if the conveyance is a business lease for real estate planning or development purposes, then, notwithstanding the term of the lease, it shall only be issued after:

                (1) notice and competitive bid; and

                (2) compliance with Section 3 of this 2011 act."

     SECTION 3. A new section of Chapter 19, Article 7 NMSA 1978 is enacted to read:

     "[NEW MATERIAL] LEASES FOR REAL ESTATE PLANNING OR DEVELOPMENT PURPOSES--PRIOR REVIEW BY STATE AUDITOR.--

          A. Except as provided in Subsection E of this section, no business lease for real estate planning or development purposes being considered by the commissioner shall be effective unless it has been reviewed by the state auditor or, if the state auditor does not have the appropriate resources available to conduct a proper review, by an independent real estate expert with specialized knowledge of large-scale commercial real estate planning or development transactions selected by the state auditor to conduct the review.

          B. Before entering into a lease, the commissioner shall submit a copy of the proposed lease to the state auditor and to each beneficiary of the lands to be included in the lease. The state auditor or an independent expert shall review the proposed lease and issue an opinion as to whether the proposed lease:

                (1) is in compliance with the applicable statutes and the Enabling Act for New Mexico; and

                (2) is in the best interest of the beneficiaries of the lands to be included in the lease.

          C. The state auditor shall deliver a copy of the opinion to each beneficiary and the commissioner. The state auditor shall post the opinion on the state auditor's web site, and the commissioner shall post the opinion on the state land office's web site.

          D. The commissioner shall consider the opinion of the state auditor or independent expert before entering into the lease. If the commissioner enters into a proposed lease against the opinion of the state auditor or independent expert, the commissioner shall notify, in writing and within ten days of entering into the lease, the state auditor, the attorney general, the governor and the legislature. The commissioner shall post the notification on the state land office's web site.

          E. If the commissioner has not received an opinion from the state auditor or independent expert within thirty days of submitting a proposed lease pursuant to this section, the commissioner may enter into the proposed lease.

          F. The reasonable costs for the review of a proposed lease shall be paid from the state lands maintenance fund."

     SECTION 4. APPLICABILITY.--The provisions of this act apply to all business leases for real estate planning or development purposes entered into by the commissioner of public lands on or after July 1, 2011.

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