NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

The LFC is only preparing FIRs on bills referred to the Senate Finance Committee, the Senate Ways and Means Committee, the House Appropriations and Finance Committee and the House Taxation and Revenue Committee. The chief clerks are responsible for preparing and issuing all other bill analyses.

Only the most recent FIR version, excluding attachments, is available on the Intranet. Previously issued FIRs and attachments may be obtained from the LFC office in Room 416 of the State Capitol Building.

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates/Conflicts with/Companion to/Relates to

SOURCES OF INFORMATION

LFC Files

Regulation and Licensing Department

SUMMARY

Synopsis of Bill

Senate Bill 508 would amend the Real Estate Brokers and Salesmen section of Chapter 61, Professional and Occupational Licenses. The bill would make four significant changes: 1) convert the salesperson category to an associate broker; 2) double the number of hours required for licensure; 3) ease the transition for existing licensees to associate broker; and 4) require associate brokers to work for three years under the supervision of a broker and take the brokers exam before becoming a broker. The effective date is July 1, 2002, which allows licensed salespersons adequate time to meet the new requirements for a qualifying broker license.

Significant Issues

The bill seeks to create one single category of licensees: either associate brokers or qualifying brokers. This model is similar to the state of Colorado model, except that Colorado recognizes three types of brokers. Proponents of the bill state it will increase the professionalism of real estate brokers because it increases the education requirements.

FISCAL IMPLICATIONS

Senate Bill 508 does not contain an appropriation. Enactment of the bill would not have a fiscal impact. However, implementation could result in a lower number of applicants, which would reduce revenues, but the amount is unknown.

ADMINISTRATIVE IMPLICATIONS

Enactment of Senate Bill 508 would have only minor administrative impacts on the New Mexico Real Estate Commission.

CONFLICT/DUPLICATION/COMPANIONSHIP/RELATIONSHIP

Senate Bill 508 conflicts with Senate Bill 402. Senate Bill 402 would change the number of public members on the commission from one to two, and reduce the number of brokers from four to three. The Legislative Finance Committee (LFC), in August 1998, received testimony from the New Mexico Real Estate Commission on this matter. During this hearing, the LFC was gravely concerned with the lack of public member involvement on this commission. For boards or commission, it is generally acknowledged that industry control of such boards is appropriate, but that public member representation should be at a level slightly below majority. The current public member to private member ratio is well below the generally accepted levels. This bill would not address the LFC concerns.

Senate Bill 508 duplicates Senate Bill 507 in certain provisions. Most notable is that both bills would eliminate the six-month residency requirement for applying for a real estate broker's license. Both bill also delete the fee schedule, because the statute already places that authority with the Commission.

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