New Mexico Register / Volume XXXV,
Issue 24 / December 23, 2024
TITLE 1 GENERAL
GOVERNMENT ADMINISTRATION
CHAPTER 5 PUBLIC
PROPERTY MANAGEMENT
PART 23 REAL
PROPERTY ACQUISITIONS, SALES, TRADES, OR LEASES
1.5.23.1 ISSUING
AGENCY: State Board of Finance, 181 Bataan Memorial
Building, Santa Fe, NM.
[1.5.23.1
NMAC - Rp, 1.5.23.1 NMAC 12/23/2024]
1.5.23.2 SCOPE: Any
transfer of funds, capital outlay project, or acquisition, donation to, or
purchase, sale, trade or lease or other disposition of
real property by public bodies that by law requires state board of finance
approval, except as otherwise indicated, or unless already addressed in a
separate board rule.
[1.5.23.2 NMAC - Rp, 1.5.23.2 NMAC 12/23/2024]
1.5.23.3 STATUTORY
AUTHORITY:
A. Section
13-6-2.1 NMSA 1978 provides generally, with certain exceptions, that any state
agency, local public body, or school district that sells, trades or leases real
property belonging to that public entity requires state board of finance
approval prior to the effective date of such sale, trade or lease. Section 16-6-15, NMSA 1978, makes Section
13-6-2.1 NMSA 1978 expressly applicable to the state fair.
B. Sections 15-3B-8 NMSA 1978 provide
that the property control division is authorized to acquire land by purchase,
gift or donation subject to prior approval by the state board of finance.
C. Subsection B of Section 15-3B-7 NMSA
1978 provides that the property control division, subject to the approval of
the state board of finance and after following the bidding procedures required
by the Procurement Code for the purchase of personal tangible property, is authorized
to enter into long-term leases not exceeding 10 years of vacant lands when the
lessor contracts with the state to construct and complete buildings, subject to
approval of the state architect, as a condition precedent to the start of the
rental term.
D. Section 17-1-22.1 NMSA 1978 provides
that the state game commission, upon approval from the state board of finance,
may transfer money from the game and fish bond retirement fund to the game and
fish capital outlay fund. Money in the
game and fish capital outlay fund may be expended for fish hatcheries and
rearing facilities, habitat acquisition, development and improvements and other
similar capital projects. All projects
funded by the game and fish capital outlay fund shall be approved by the state
board of finance.
E. Subsection B of Section 3-46-34 NMSA
1978 provides that a municipality may dispose of real property in an urban
renewal or land development area to private persons only under reasonably
competitive bidding procedures as it shall prescribe or as provided in this
subsection. The municipality may accept
any proposal it deems to be in the best interest and
in furtherance of the purposes of the urban renewal law; provided, that a
notification of intention to accept the proposal shall be filed with the
governing body not less than thirty days prior to any acceptance. Thereafter, the municipality may execute a
contract in accordance with the provisions of the urban renewal law, and
deliver deeds, leases and other instruments and take all steps necessary to
effectuate the contract; provided that if the municipality accepts other than
the highest bid, the acceptance must be approved by the state board of finance
before the municipality may proceed.
F. Subsection J of Section 16-2-11 NMSA
1978 provides that any acquisition of lands adjacent or contiguous to existing
state parks or recreational areas or necessary for successful park or
recreational area protection and development and will become part of the park
or recreational area may be acquired by the state following consultation with
local government entities on the acquisition and approval of the acquisition by
the state board of finance, and funds for acquisition is available to state
parks division or land is being donated to the division.
[1.5.23.3 NMAC - Rp, 1.5.23.3 NMAC 12/23/2024]
1.5.23.4 DURATION: Permanent.
[1.5.23.4 NMAC - Rp, 1.5.23.4 NMAC 12/23/2024]
1.5.23.5 EFFECTIVE
DATE: December 23, 2024, unless a later date is
cited at the end of a section.
[1.5.23.5 NMAC - Rp, 1.5.23.5 NMAC 12/23/2024]
1.5.23.6 OBJECTIVE: This
rule provides general guidance regarding the financial and legal requirements
for state board of finance approval of certain real
property transactions as required by state statute. This rule is not applicable
to the acquisition of real estate by Article XII, Section 11 educational
institutions, whose expenditures regarding acquisitions are governed by a
separate board rule. The rule is
intended to benefit the state and its agencies and political subdivisions in
their real property dealings by describing which transactions require state
board of finance approval and listing materials that must be submitted to the
state board of finance for approval. State board of finance approval is based solely on
information provided by the public body. The state board of finance has no duty
to independently investigate, and does not independently investigate, the
merits and risks involved in the real property transaction.
[1.5.23.6 NMAC - Rp, 1.5.23.6 NMAC 12/23/2024]
1.5.23.7 DEFINITIONS:
A. “Acquisition” means, unless usage
indicates otherwise, obtaining title in fee simple absolute to real estate by
purchase, trade, gift or donation.
B. “Appraisal
report” means a report of an opinion of value
conducted by a general certified appraiser and that meets all requirements
under the Uniform Standards of Professional Appraisal Practice (USPAP).
C. “Board” means state board of
finance.
D. “Consideration” means something
which is of a value at least equal to the value of the real property interest
being conveyed, including but not limited to cash, another piece of real
estate, services, or other form of compensation.
E. “Current” means:
(1) in the context of an appraisal, an
appraisal report with an effective date within one year of the date of
submission of the proposed transaction to the board for approval, and
(2) in the context of a title binder,
dated within six months of the proposed closing date.
F. “General certified appraiser”
means a person who holds a valid, current general certificate as a state
certified real estate appraiser issued by the real estate appraisers board
pursuant to the Real Estate Appraisers Act.
G. “Local public body” means all
political subdivisions, but not including municipalities except for those
transactions where board approval is required by law and school districts, of
the state and their agencies, instrumentalities and institutions.
H. “Private entity” means any
non-public entity, including but not limited to persons, associations, and both
for-profit and non-profit corporations. It does not include Indian nations,
tribes and pueblos.
I. “Public entity” means a local
public body, a state agency, a school district or state educational
institution.
J. “Real property” means any
interest in real estate, including but not limited to estates in fee simple,
leaseholds (including subleaseholds and any leases entered into pursuant to Section 4-38-13.1 NMSA 1978), water
rights and permanent easements.
K. “Residential certified appraiser”
means a person who holds a valid, current residential certificate as a state
certified real estate appraiser issued by the real estate appraisers board
pursuant to the Real Estate Appraisers Act (who has met the qualification
required in Subsection C of Sections 60-30-12 NMSA 1978 and 16.62.4.8 NMAC).
L. “Sale, trade or lease” means any
disposition of real property, including but not limited to donations by one
governmental entity to another governmental entity, but disposition does not
include demolition of buildings or other improvements on real property owned by
the public body.
M. “School district” means those
political subdivisions of the state established for the administration of
public schools.
N. “State agency” means the state of
New Mexico or any of its branches, agencies, departments, boards,
instrumentalities, or institutions other than state educational institutions.
O. “School districts” means those
political subdivisions of the state established for the administration of
public schools.
P. “State educational institution”
means Article XII, Section 11 educational institutions.
Q. “Term” means the period of time
during which a lease is in effect, and includes all
renewal options or extensions.
[1.5.23.7 NMAC - Rp, 1.5.23.7 NMAC 12/23/2024]
1.5.23.8 ACQUISITION
OF REAL PROPERTY:
A. Public bodies requiring board
approval before acquiring real property include, but are not limited to, the
following:
(1) general services department;
(2) department of game and fish for
expenditures from the game and fish capital outlay fund;
(3) the state for state parks or recreational areas pursuant to
Subsection J of Section 16-11 NMSA 1978.
B. In order to
attain approval for acquisition of real property, the
board requires that the following information be provided at the time of
submission to the board:
(1) the form of general warranty deed by
which the public entity will take title in fee simple absolute
containing legal description of the property and warranty covenants; reversions
or other forfeiture provisions in the deed shall be accepted only under
extraordinary circumstances; special warranty deeds will be accepted only under
extraordinary circumstances; when the seller is a public body, transfer of
title shall be by quitclaim deed;
(2) a copy of a current appraisal report completed
by a general certified appraiser for commercial property or a general certified
appraiser or a residential certified appraiser for residential property and
report of review from the property tax division of the taxation and revenue
department if the appraisal was not done by the property tax division; the
public entity seeking property tax division review must submit necessary
information to the property tax division within the time frame specified by the
property tax division; when the seller is another governmental entity, neither
an appraisal nor property tax division review is required;
(3) full sized site improvement survey plat to verify legal description and to identify the
existence of recorded easements and encroachments, if applicable;
(4) a description of the proposed use;
(5) sources of funds used for the
purchase;
(6) current title binder evidencing clear
title with no non-standard exceptions, and:
(a) agreement
by the title company of the inclusion of exceptions and statements verbatim as
set forth in 13.14.5.10 NMAC;
(b) for
any special exceptions listed in Schedule B, an explanation of each exception
and measures the public body is taking to mitigate any risks associated with
the exception;
(7) purchase agreement, if applicable,
containing a statement making the purchase and any amendments to the agreement
subject to board approval;
(8) phase 1 environmental assessment for
all properties; phase II environmental assessment if recommended by the phase I
assessment; explanation of any recognized environmental conditions contained in
such assessments and statement of how recognized environmental conditions will
impact intended use of the property;
(9) resolution or minutes of the governing
body, if applicable, authorizing the purchase and containing a provision making
the acquisition subject to approval by the board; and
(10) approval of the disposition by the local
government division of the department of finance and administration pursuant to
Subsection D of Section 3-54-2 NMSA 1978 if the entity selling, exchanging or
donating the real property is a municipality
C. Acquisition
of real property for more than fair market value, as
determined by the requirements of Paragraph (2) of Subsection B of 1.5.23.8
NMAC, is not permitted.
[1.5.23.8 NMAC - Rp, 1.5.23.8 NMAC 12/23/2024]
1.5.23.9 SALE
OR TRADE OF REAL PROPERTY:
A. If the sale or trade of real property
is for a consideration of more than twenty-five thousand dollars ($25,000),
then prior board approval is necessary for:
(1) state agencies (unless the
consideration is one hundred thousand dollars ($100,000) or more, in which case
require approval by the legislature is required);
(2) school districts; and
(3) local public bodies, including, but
not limited to:
(a) counties;
(b) community colleges (but not including
branch community colleges) and technical vocational institutes;
(c) conservancy districts; and
(d) flood control authorities.
B. In order to
obtain approval for the sale or trade of real property, the board requires that
the following information be provided at the time of submission to the board:
(1) any summary information, forms, or
checklists as determined and required by Board staff through established
guidelines;
(2) a cover letter providing details of
the request;
(3) the
form of quitclaim deed from the public body transferring title to purchaser
containing the legal description of the property;
(4) a copy of a current appraisal report completed
by a general certified appraiser for commercial property or a general certified
appraiser or a residential certified appraiser for residential property and
report of review by the property tax division of the taxation and revenue
department if the appraisal was not done by the property tax division (for both
properties if trade); the public entity seeking property tax division review
must submit necessary information to the property tax division within time frame
specified by the property tax division; when the buyer is another governmental
entity, neither an appraisal nor property tax division review is required;
(5) a description of the reason for the
sale or trade;
(6) selection process used to determine purchaser; competitive sealed bid, public auction, or
negotiation;
(7) purchase price and if applicable, cost
per square foot, cost per acre, or cost per acre foot of water rights, etc.
(for both properties if trade);
(8) sale agreement, if applicable,
containing a statement making the sale or trade and any amendments to the
agreement subject to board approval;
(9) resolution or minutes of the governing
body, if applicable, authorizing the sale or trade and containing a provision
making the sale or trade subject to approval by the board;
(10) approval by the state engineer of any
transfer of water rights;
(11) if a school district is seeking approval
of a disposition of real property that includes a building, it must submit
evidence that the building does not meet public school capital outlay council
occupancy standards or that all charter schools located in the district have
declined within a reasonable period of time set by the school district, use of
the building pursuant to Subsection F of Section 22-8B-4 NMSA 1978; and
(12) if a state agency is seeking approval of
the disposition of real property within the boundaries of a community land
grant, a resolution or meeting minutes of the board of trustees of the
community land grant evidencing its intent not to purchase the real property
pursuant to Section 13-6-5 NMSA 1978; in the event a board of trustees does not
respond to the state agency’s notice of sale within forty-five days, the state
agency shall document the lack of response in its submission to the board.
C. Transfer for less than fair market
value, as determined by the requirements of Paragraph (2) of Subsection B of
1.5.23.9 NMAC, of real property owned by a public entity to any private entity
is not permitted, except as authorized by legislation implementing the economic
development and affordable housing exceptions to the Anti-donation Clause of
Article IX, Section 14 of the New Mexico constitution.
[1.5.23.9 NMAC - Rp, 1.5.23.9 NMAC 12/23/2024]
1.5.23.10 LEASE
OF REAL PROPERTY:
A. Board approval is required whenever
certain public bodies wish to lease (or sub-lease) properties they own (or are
leasing): if
(1) the term of the lease or sublease is
for a period of more than five years, or
(2) the consideration over the lease term
is more than twenty-five thousand dollars ($25,000).
B. Prior board approval is necessary
for:
(1) state agencies (unless consideration
is one hundred thousand dollars ($100,000) or more and the term is for a period
of more than twenty-five years, in which case approval by the legislature is
required);
(2) counties;
(3) school districts (unless leasing
facilities to a locally chartered or state-chartered charter school, in which
case approval by the public school facilities authority is required); and
(4) local public bodies, which include,
but are not limited to, the following:
(a) community colleges (but not including
branch community colleges) and technical vocational institutes;
(b) conservancy districts;
(c) flood control authorities; and
(d) special hospital districts and county
hospitals pursuant to the Hospital Funding Act.
C. In order to
obtain approval for leases of real property, the board requires that at least
the following information be provided:
(1) any summary information, forms, or
checklists as determined and required by board staff through established
guidelines;
(2) a cover letter providing details of
the request;
(3) current appraisal report completed by
a general certified appraiser for commercial property or a general certified
appraiser or a residential certified appraiser for residential property or
other evidence of fair market value and report of review from the property tax
division of the taxation and revenue department if the appraisal was not done
by the property tax division; the public entity seeking property tax division
review must submit necessary information to the property tax division within the
time frame specified by the property tax division; when the lessee/tenant is
another public body, neither an appraisal nor property tax division review is
required;
(4) copy of the lease containing a
statement making the lease and any amendments subject to board approval;
(5) resolution from the governing body, if
applicable, approving the lease, and containing a provision making the lease
subject to board approval;
(6) the reason for leasing;
(7) description of the selection process
used to determine lessee: competitive sealed bid, public auction, or
negotiation;
(8) if consideration is being provided by
the lessee (or sub-lessee), partially or completely, in the form of services,
tangible personal property or construction, evidence that the selection of the
lessee (or sub-lessee) complied with the procurement code or is expressly
exempted and the term of the lease complies with, Section 13-1-150 NMSA 1978,
as it may be amended from time to time;
(9) if a school district is seeking
approval of a lease of real property that includes a building, evidence the
building does not meet public school capital outlay council occupancy standards
or that all charter schools located in the district have declined within a
reasonable period of time set by the school district use of the building
pursuant to Subsection F of Section 22-8B-4 NMSA 1978; and
D. Rent or other consideration at less
than fair market value, as determined by the requirements of Paragraph (1) of
Subsection B of 1.5.23.10 NMAC, from a private entity is not permitted, except
as authorized by legislation implementing the economic development and
affordable housing exceptions to the Anti-donation Clause of Article IX,
Section 14 of the New Mexico constitution.
[1.5.23.10 NMAC - Rp, 1.5.23.10 NMAC 12/23/2024]
1.5.23.11 SUBMISSION
OF REQUESTS TO THE STATE BOARD OF FINANCE:
A. Real property transaction requests
submitted to the board should address each of the specific items in this rule, as
applicable. An electronic bookmarked PDF must be submitted to the board.
B. Completed packages, in their
entirety, must be submitted on or before the board’s meeting deadline, as
published on the board’s website, and must meet application-formatting
criteria.
C. Upon request, the board, in its discretion, may waive any requirement under this rule
provided that the requesting party can demonstrate that other documents
provided are equivalent to or satisfy the rationale for submitting the item and
that the state’s interest will still be sufficiently protected.
D. The board, in
its discretion, may require additional information be provided as may be
relevant to a specific transaction.
[1.5.23.11 NMAC - Rp, 1.5.23.11 NMAC 12/23/2024]
HISTORY OF 1.5.23 NMAC Pre-NMAC History: none.
History of Repealed Material: 1.5.23 NMAC, Real Property Acquisitions, Sales, Trades, or Leases
filed 1/19/2001 Repealed effective 12/23/2024.
Other: 1.5.23 NMAC, Real Property Acquisitions, Sales,
Trades, or Leases filed 1/19/2001 Replaced by 1.5.23 Real Property
Acquisitions, Sales, Trades, or Leases effective 12/23/2024.