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 - N, 2-14-2001]
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 - N, 2-14-2001; A, 3-15-2010]
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 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. Section 15-3B-7(B) 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 ten 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. Section 3-46-34(B) 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. Section 16-2-11(J) 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 - N, 2-14-2001; A, 9-30-2004; A, 3-15-2010]
1.5.23.4 DURATION: Permanent.
[1.5.23.4 NMAC - N, 2-14-2001]
1.5.23.5 EFFECTIVE
DATE: February 14, 2001,
unless a later date is cited at the end of a section.
[1.5.23.5 NMAC - N, 2-14-2001]
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 - N, 2-14-2001; A, 7-15-2003]
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. “Board” means state board of
finance.
C. “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.
D. “Current” means:
(1) in the context of
an appraisal, dated 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.
E. “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 (who has met the qualifications required in
section 61-30-12 (D) NMSA 1978 and 16.62.5.8 NMAC).
F. “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.
G. “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.
H. “Public body” means a local public
body, a state agency, a school district or state educational institution.
I. “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.
J. “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 sections 60-30-12 (C) NMSA 1978 and 16.62.4.8 NMAC).
K. “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.
L. “State agency” means the state of
New Mexico or any of its branches, agencies, departments, boards, instrumentalities,
or institutions other than state educational institutions.
M. “School districts” means those
political subdivisions of the state established for the administration of
public schools.
N. “State educational institution”
means Article XII, Section 11 educational institutions.
O. “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 - N, 2-14-2001; A, 6-28-2002;
A, 9-30-2004; A, 3-15-2010]
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 section 16-11(J) 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 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 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
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 agreement by the title company that
it will delete general exceptions 1 through 6, and the first two-thirds of 7
and, to the extent that special exceptions are listed, an explanation of each
special exception shown in Schedule B Section II and a statement of impact on
intended use of the property as to each special exception;
(7) purchase agreement, if applicable;
(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
section 3-54-2(D) 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 - N, 2-14-2001; A, 6-28-2002;
A, 9-30-2004; A, 3-15-2010; A, 8-15-2011]
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) the form of
quitclaim deed from the public body transferring title to purchaser containing
the legal description of the property;
(2) a copy of a current appraisal 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;
(3) a description of
the reason for the sale or trade;
(4) selection process
used to determine purchaser; competitive sealed bid, public auction, or
negotiation;
(5) 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);
(6) sale agreements,
if applicable;
(7) 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;
(8) approval by the
state engineer of any transfer of water rights; and
(9) 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 Section 22-8B-4(F) NMSA 1978.
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 - N, 2-14-2001; A, 6-28-2002;
A, 7-15-2003; A, 9-30-2004; A, 3-15-2010; A, 8-15-2011]
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). 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.
B. In order to obtain approval for
leases of real property, the board requires that at least the following
information be provided:
(1) current appraisal 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
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 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;
(2) copy of the
lease;
(3) resolution from
the governing body, if applicable, approving the lease, and containing a
provision making the lease subject to board approval;
(4) the reason for
leasing;
(5) description of
the selection process used to determine lessee: competitive sealed bid, public
auction, or negotiation;
(6) 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; and
(7) 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 section
22-8B-4(F) NMSA 1978.
C. 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 - N, 2-14-2001; A, 6-28-2002;
A, 7-15-2003; A, 9-30-2004; A, 3-15-2010; A, 8-15-2011]
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
policy, if applicable. One hard copy and
one identical electronic version should be submitted to the board. The hard copy should be tabbed for easy
reference and the electronic version should be bookmarked.
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. Except for full-sized site improvement plats
submitted pursuant to Paragraph (3) of Subsection B of 1.5.23.8 NMAC, the hard
copy must be standard letter size, 8 1/2 inches by 11 inches.
C. Upon request, the board, in its
discretion, may waive provision of any information otherwise required by this
rule provided that the requesting party can demonstrate that other documents
that are provided are equivalent to or satisfy the rationale for submitting the
item and that the state’s interest still will 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 -N, 2-14-2001; A, 3-15-2010;
A, 8-15-2011]
HISTORY OF 1.5.23 NMAC
Pre-NMAC History: none.
