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(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

Taxation and Revenue Department (TRD)

SUMMARY

Synopsis of Bill

House Bill 98 amends Section 7-38-67 NMSA 1978, relating to real property sale requirements, in order to allow community land grants "functioning under the laws of the state, except for those land grants that have organized as for-profit corporations," the pre-emptive right to purchase property for sale at a public auction for delinquent property taxes by paying "all past taxes, penalties, interest and costs due on the property." The land must be located within the boundaries of associated land grants.

Additionally, the bill provides an appropriation to the Local Government Division (LGD) of the Department of Finance and Administration in order to assist participation of community land grants in bidding for appropriate properties for sale through delinquent tax auctions.

FISCAL IMPLICATIONS

The bill makes a general fund appropriation of $20.0 to LGD for expenditure in FY2000. Any unexpended or unencumbered balance remaining at the end of FY2000 reverts to the general fund.

The TRD indicates small negative impacts would be imposed on the State or local funding sources. However, the actual impact is unknown.

CONFLICT

There may be a conflict with Section 7-38-67 (E) NMSA 1978. See technical issues below.

TECHNICAL ISSUES

The TRD notes the following technical issues:

1) TRD legal counsel advises that the proposed measure may violate the equal protection clause of the US Constitution. See Hooper v Bernalillo County Assessor, 472 US 612.

2) Provisions of the proposed statute are inconsistent with stipulations in Subsection E of Section 7-38-67 NMSA 1978 stating that: 'In determining the minimum price, the department shall consider the value of the property owner's interest in the real property, the amount of all delinquent taxes, penalties and interest for which it is being sold and costs... Real property may not be sold for less than the minimum price unless no offer met the minimum price when it was offered at an earlier public auction.' Including an estimate of the owner's residual interest may lead to an auction minimum bid higher than what the land grant would be required to pay.

JMG/prr