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Bill to pay pandemic 'reparations' to New Mexico businesses stalls in committee

Roswell Senator argues pandemic health orders amount to 'takings' under state Constitution

Algernon D'Ammassa
Las Cruces Sun-News

SANTA FE – Do losses to New Mexico businesses or closures due to emergency public health orders amount to takings of private property?

That's the case state Sen. Cliff Pirtle, R-Roswell, made before the Senate Tax, Business and Transportation Committee Tuesday, but his bill stalled without a vote in part because the state Supreme Court has yet to rule on the issue. 

Pirtle's Small Business Pandemic Reparations Act (SB 79) would appropriate $55 million to a new fund for paying "reparations," in the form of tax credits, to small businesses impacted by New Mexico's public health orders addressing the COVID-19 pandemic. 

The bill would create a "pandemic reparations division" within the state Tax and Revenue Department to process claims. Business owners who are denied a claim would have 90 days to protest the decision.

The legislative fiscal impact report notes that applicants could file claims for "expenses incurred directly as a result of complying with the public health order, minus any state and federal government assistance received by the small business; however, the bill is silent on exactly what expenses would qualify and places no cap on the amount of credit that can be claimed."

New Mexico state Sen. Cliff Pirtle, R-Roswell, speaks to the Senate Tax, Business and Transportation Committee via video conference on Tuesday, Feb. 16, 2021.

Pirtle argued that under the state Constitution, local businesses whose operations were closed or restricted due to the COVID-19 pandemic had an avenue to sue for compensation, and that he anticipated multiple lawsuits. Establishing a fund to proceed with assessing claims and remitting payments, he said, would save money in the long term. 

During the current session, the New Mexico Senate has vetted legislation to increase legislative branch authority over prolonged public health emergencies. 

Gov. Michelle Lujan Grisham declared a public health emergency on March 11, 2020, when the first positive cases in the state were announced, and has extended the state of emergency several times since. 

State Sen. Michael Padilla, D-Albuquerque and the committee's vice chair, said he was "on the fence" about Pirtle's proposal in light of other economic aid the legislature had passed to assist New Mexico businesses, and the uncertain fiscal demand if the fund came to fruition. 

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Last week, the state Senate passed a bill that included low-interest loans of up to $150,000 to small businesses affected by the health emergency, sending it to the House. 

The Video 4 theater announces they will close their doors permanently. The theater is pictured on Friday, Oct. 3, 2020.

Pirtle admitted that the $55 million was a starting point and that the potential fiscal impact was "the big unknown."  

The New Mexico Attorney General's Office noted for the fiscal impact report that the state Supreme Court recently heard oral arguments as to whether public health orders amount to a "taking" of property under the Constitution, but has yet to rule.

Senate Majority Leader Peter Wirth, D-Santa Fe, argued against moving forward on the bill before while the case was still pending in the high court. The committee then moved on to other bills without voting on SB 79.

Last August, the New Mexico Supreme Court ruled against restaurant owners who sued the state over public health orders that restricted dining, upholding the administration's emergency powers.

On Monday, the court issued a detailed written opinion in that case in which retired Justice Judith Nakamura wrote, "New Mexico has not entered a 'new normal,' nor do the temporary emergency orders constitute 'long-term policy' decisions."

Algernon D'Ammassa can be reached at 575-541-5451, adammassa@lcsun-news.com or @AlgernonWrites on Twitter.

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