Summary:

 Senate Bill 274 (SB 274) amends Section 13-6-1 NMSA 1978, raising the threshold for State Board of Finance approval on state agency and local public body property sales, trades, or leases. The bill increases the approval threshold from $5,000 to $30,000 for obsolete, worn-out, or unusable tangible personal property and raises the approval threshold for real property transactions from $25,000 to $150,000. 

Legislation Overview:

 Senate Bill 274 (SB 274) updates state property disposal laws, increasing the value thresholds that require State Board of Finance approval for the sale, trade, or lease of tangible personal property and real estate by state agencies and local public bodies.

For obsolete, worn-out, or unusable tangible personal property, the approval threshold increases from $5,000 to $30,000, allowing local governments and state agencies to dispose of lower-value property without board review. The bill also updates the threshold for real estate transactions, requiring board approval only for sales, trades, or leases exceeding $150,000, up from the previous $25,000 limit.

The bill establishes clear procedural requirements for property disposal, requiring agencies to document disposal decisions, maintain public records, and prioritize transfers to other state agencies, local governments, or tribal entities before public sale or auction.

The bill maintains existing restrictions on donations to public employees, preventing conflicts of interest in state asset disposal. The bill also clarifies surplus property procedures for the Department of Transportation and law enforcement K-9 retirements, ensuring that governmental agencies retain first right of refusal before public auctions or donations occur.

Implications
SB 274 streamlines property disposal processes for state agencies and local public bodies, reducing administrative delays caused by low-value transactions requiring board approval. By raising the approval threshold, the bill allows faster asset disposal while freeing up the board's resources for higher-value transactions requiring closer scrutiny.

The bill reduces bureaucratic burden on agencies handling obsolete or unusable assets, making government operations more efficient. However, higher threshold limits may reduce oversight on mid-range property transactions, potentially leading to inconsistencies in how assets are valued and disposed.

Local governments and school districts may benefit from increased flexibility, as they will no longer need state-level approval for smaller property sales or exchanges. However, ensuring proper documentation and transparency in higher-value transactions remains critical.

Raising the real estate transaction threshold from $25,000 to $150,000 reflects inflationary adjustments and aligns with current property values, ensuring that only significant transactions receive board-level scrutiny. However, it may reduce oversight on smaller, yet still valuable, property transfers. 

Current Law:

 Under current law, state agencies and local public bodies must obtain State Board of Finance approval for all real estate transactions exceeding $25,000 and for tangible personal property disposals valued at more than $5,000. These low thresholds increase administrative delays and board workload. SB 274 modernizes these limits, ensuring that smaller transactions are handled efficiently at the agency level while reserving board oversight for higher-value sales and leases. 

Amendments:

 Amended March 4, 2025 in SFC

SFCa/ SB274: The Senate Financial Committee made a single amendment to SB 274, modifying the definition of local public body in the Public Property Disposition Act. The amendment, inserted on page 7, line 12, adds community colleges to the list of entities included under the definition of local public body. This change clarifies that community colleges will be subject to the same property disposition regulations as other local public bodies when selling, leasing, or disposing of state-owned property.

By adding community colleges to the definition of local public body, the amendment ensures that these institutions are explicitly covered under the provisions governing the sale, trade, and lease of state-owned property. Without this clarification, there may have been ambiguity regarding whether community colleges were subject to the same approval and oversight requirements as other public entities, such as municipalities or school districts.

The inclusion of community colleges in this provision means that when these institutions seek to sell or lease real or tangible personal property, they must comply with state regulations, including obtaining necessary approvals and following proper disposal procedures. This amendment ensures consistent property management practices across all publicly funded educational institutions, preventing community colleges from operating under separate or less restrictive property disposal rules.

Additionally, this change could increase oversight and transparency in how community colleges manage state-funded assets. If a community college seeks to dispose of land, buildings, or equipment, it will be required to follow the same public notification and approval procedures as other local public bodies. This could prevent undervalued sales or improper transfers of public assets.