Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR Cervantes
LAST UPDATED
ORIGINAL DATE 2/25/25
SHORT TITLE Firearms in Unfair Practices Act
BILL
NUMBER Senate Bill 318
ANALYST Chavez
REVENUE*
(dollars in thousands)
Type FY25 FY26 FY27 FY28 FY29
Recurring or
Nonrecurring
Fund
Affected
Fines and
Forfeitures
No fiscal
impact
Indeterminate
but minimal
gain
Indeterminate
but minimal
gain
Indeterminate
but minimal
gain
Indeterminate
but minimal
gain
Recurring
General
Fund
Parentheses ( ) indicate revenue decreases.
*Amounts reflect most recent analysis of this legislation.
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 FY26 FY27
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected
NMAG
No fiscal
impact
Indeterminate
but minimal
Indeterminate
but minimal
Indeterminate
but minimal
Recurring General Fund
Courts
No fiscal
impact
Indeterminate
but minimal
Indeterminate
but minimal
Indeterminate
but minimal
Recurring General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Conflicts with House Bills 61, 62, 224, and 245.
Sources of Information
LFC Files
Agency Analysis Received From
Administrative Office of the Courts (AOC) Regulation and Licensing Department (RLD)
Department of Public Safety (DPS)
Agency Analysis was Solicited but Not Received From
New Mexico Attorney General (NMAG) Tax and Revenue Department (TRD)
SUMMARY
Synopsis of Senate Bill 318
Senate Bill 318 (SB318) seeks to amend various sections of New Mexico law to regulate Senate Bill 318 – Page 2
firearms and destructive devices under the Unfair Practices Act (UPA).
SB318 amends Section 53-17-2 NMSA 1978, governing powers of a foreign corporation, to
provide that a foreign corporation that has received a certificate of authority under the Business
Corporation Act consents to general personal jurisdiction in New Mexico.
The bill amends Section 57-12-2 NMSA 1978 to include firearms and destructive devices within
the definition of goods and services covered by UPA, thereby subjecting their manufacture,
advertising, distribution, and sale to consumer protection laws. The bill also amends to the
definition of "unfair or deceptive trade practice" to include representing goods and services as
legal to purchase when they are not, exempting representations or activities authorized under the
Lynn and Erin Compassionate Use Act or the Cannabis Regulation Act. SB318 also defines
terms including online marketplaces, third-party sellers, and other factors related to online
exchanges.
SB318 amends Section 57-12-7 NMSA 1978, the statute governing exceptions to UPA, to now
exclude actions or transactions explicitly permitted by federal or state law or by a regulatory
body, instead of exempting just what was expressly permitted by a regulatory body. It also
exempts cases where a person, business, or entity has legal immunity under U.S. or New Mexico
law. Additionally, UPA would not apply when specific legal requirements, such as proving
proximate cause of harm or demonstrating that the alleged unfair practice took place within New
Mexico, are not met.
Section 57-12-9 NMSA 1978 would also be amended to bar recovering any damages in an action
if the individual accepts restitution from an assurance to now allowing them to bring forth an
action if the defendant fails to make restitution as agreed.
The bill amends Section 57-12-10 NMSA 1978, the private remedies statute. The proposed
amendment would increase the amount recoverable in an action under UPA from actual damages
or $100, whichever is greater, to actual damages or $10 thousand, whichever is greater. It also
increases the amount recoverable where the trier of fact (a person or group of people who
determines disputed issues of fact in a legal proceedings) finds that the party has willfully
engaged in a unlawful trade practice, from an award of up to three times actual damages or $300,
whichever is greater, to an award of up to three times actual damages or $10 thousand ,
whichever is greater. SB318 would allow courts to grant an injunction against a person engaged
in an unfair, deceptive, or unconscionable trade practice involving firearms, destructive devices,
firearm parts, or accessories that violate New Mexico or federal law. The person granted the
injunction would also be awarded $250 thousand per violation. SB318 also strikes two sections
related to mediation use to resolve disputes under UPA.
SB318 also amends Section 57-12-10 NMSA 1978 to have multiple parties, who work together
in the manufacture, advertise, distribute or offer for sale a firearm, destructive device, firearm
part or firearm accessory, incur joint and several liability. Online marketplaces would also be
jointly and severally liable for any violations of UPA that occur on the online marketplace.
Online marketplaces would also be required to comply with validly issued subpoenas that seek
information about a third-party seller. If an online marketplace or third-party seller willfully fails
to or refuses to comply with the subpoena, that itself will be considered a violation of UPA and
would be liable to award the requesting party $250 thousand and attorney fees and costs if the
violation revolves around a third-party seller dealing with a firearm, destructive device, firearm Senate Bill 318 – Page 3
part or firearm accessory. If the subpoena is issued involving any other allegation under UPA,
the online marketplace or third-party seller would be liable for a $10 thousand award to the
requesting party. The bills finally amend this section to have an online marketplace, seller, or
third-party seller without a U.S. business location, or one that hides its location while selling in
New Mexico, is considered to have minimum contacts with the state, benefit from its laws,
conduct business there, and be subject to legal action in its courts.
SB318 also amends Section 57-12-11 NMSA 1978 to increase civil penalties for violations,
raising the fine to $25 thousand (from $5,000) and $250 thousand per violation if the infraction
involves firearms.
Further, the bill strengthens enforcement mechanisms by granting the New Mexico Attorney
General (NMAG) broader authority under Section 57-12-12 NMSA 1978 to investigate and
prosecute such violations by being able to issue civil investigative demands (CID). The bill does
provide provisions that NMAG will not publish the findings from CIDs unless ordered by the
court. SB318 also provides that documentary material produced pursuant to a CID, unless
ordered by the court, is subject to the Inspection of Public Records Act and discoverable by any
party to an action brought pursuant to UPA.
The bill amends Section 57-12-16 to clarify that UPA does not apply to media, unless the
publication, broadcast or reproduction violates the laws of New Mexico or the U.S.
Finally, the bill seeks to create a new section, Section 57-12-3.2 NMSA 1978, making it
unlawful to engage in unfair or deceptive trade practices related to firearms and destructive
devices, specifically prohibiting violations of Section 30-7-7 NMSA 1978 (governing the
unlawful sale, possession or transportation of explosives) and other state or federal laws
governing firearm commerce.
This bill does not contain an effective date and, as a result, would go into effect 90 days after the
Legislature adjourns if enacted, or June 20, 2025.
FISCAL IMPLICATIONS
Revenue. SB318 provides for a civil penalty that may be imposed in an action brought by
NMAG under UPA for knowingly engaging in an illegal firearm trade practice of up to $250
thousand per violation. Because this is a new, relatively narrow category of unfair practice, it is
difficult to predict how many cases will result in the imposition of such a penalty, or the amount
of any penalty imposed in a case. As a result, LFC staff estimates the fiscal impact on revenues
to be indeterminate but have minimal gain.
Operating Budget Impact. Under existing law, NMAG is authorized to bring an action in the
name of the state alleging a violation of UPA. SB318 expands the scope of coverage of UPA, but
would include a new and relatively narrow category of unfair practice, meaning that the
operating budget impact on the courts and NMAG would be indeterminate but minimal.
SIGNIFICANT ISSUES
SB318 is a duplicate of the House Judiciary Committee’s amendments to Senate Bill 428 Senate Bill 318 – Page 4
(SB428) that was sponsored by the Senate Judiciary Committee from the 2023 legislative
session. The New Mexico Attorney General (NMAG) then objected to the provisions of Section
9, which makes documents produced in response to a CID public record, absent a court ruling
otherwise, which reverses the presumption in the current version of UPA that these documents
are not public records. Section 9 of SB318, the corresponding section, remains unchanged from
SB428 of the 2023 session. Because of this, NMAG’s objection would remain. In previous
analysis, NMAG explained the basis for the current law providing for nondisclosure of CID
materials as a general rule:
The Office of the Attorney General uses CIDs as a tool to investigate potential violations
of UPA before filing a lawsuit. By making information obtained through a CID subject to
public disclosure under IPRA, the bill would significantly impact the Attorney General’s
ability to carry out its enforcement authority under UPA for at least three reasons.
First, CIDs often seek highly sensitive information, including HIPAA protected health
information, private banking information including detailed transaction logs, and
confidential trade secrets. Targets of CIDs commonly object to providing full responses
on the basis that such material is too sensitive to turn over. The default confidentiality
and IPRA exception in the current CID provisions of UPA provide a way for the
Attorney General to overcome those objections and compel production of such materials
because they will not be subject to public disclosure. If CID materials become subject to
public disclosure through IPRA by default, the office will face extensive litigation over
confidentiality over the majority of CIDs issued by the office.
Second, at times, the Attorney General issues CIDs to third party entities to obtain
information about a potential defendant’s UPA violation. When this happens, the fact that
a third-party CID has been issued, and the information obtained, is not disclosed to any
party unless and until the Attorney General files a lawsuit against the defendant. If
documents obtained through a CID become subject to disclosure under IPRA by default,
a potential defendant which has some reason to suspect that it is under investigation by
the Attorney General may be able to submit its own IPRA request to obtain and review
information obtained by the Attorney General from third parties before a lawsuit is filed.
Generally, parties to litigation are not entitled to obtain materials created by an opposing
party in anticipation of litigation, particularly when those materials may reveal the
“mental impressions, conclusions, opinions or legal theories of an attorney or other
representative of a party concerning the litigation.” NMRA Rule 1-026(B)(5). The presuit
disclosure of CID evidence sought and obtained by the Attorney General related to a
potential UPA lawsuit would likely reveal much about the opinions or legal theories of
the office leading up to the filing of the lawsuit and be a significant disadvantage to the
office in pursuing its enforcement authority under UPA through litigation.
Finally, the Attorney General commonly participates in multi-state enforcement efforts
with other Attorneys General to investigate a specific potential defendant or group of
defendants whose conduct may have violated consumer protection laws in multiple states.
These multi-state groups commonly involve entering into a Common Interest Agreement
to allow the participating Attorneys General to communicate and share investigative
materials without waiving attorney/client privilege or attorney work product privilege. If
CIDs issued under the New Mexico UPA are subject to disclosure under IPRA, New
Mexico may not be able to participate fully in such multi-state enforcement efforts in the
future because of the confidentiality requirements included in group Common Interest Senate Bill 318 – Page 5
Agreements.
The Administrative Office of the Courts (AOC) points out that the Connecticut Supreme Court,
in a 4-3 decision in Soto v. Bushmaster Firearms Int'l, LLC (2019), allowed a lawsuit against the
manufacturer of the AR-15-style rifle used in the 2012 Sandy Hook massacre to proceed, despite
federal protections under the Protection of Lawful Commerce in Arms Act (PLCAA). The
plaintiffs, representing victims’ estates, argued that Bushmaster’s marketing violated the
Connecticut Unfair Trade Practices Act (CUTPA) by promoting the rifle’s militaristic and
combat capabilities, potentially encouraging criminal use. The Court ruled that this marketing
strategy fell within PLCAA’s "predicate exception," which permits lawsuits based on violations
of applicable state laws.
The ruling marked a significant limitation on PLCAA’s broad immunity for gun manufacturers.
In November 2019, the U.S. Supreme Court declined to review the case, upholding the
Connecticut Supreme Court’s decision and allowing the lawsuit to move forward.
The Regulation and Licensing Department (RLD) provides the following on the proposed
amendments to the Business Corporation Act:
SB318 amends the Business Corporation Act by imposing a requirement of a consent to
registration. SB318 expands personal jurisdiction of a foreign corporation that received a
certificate of authority under the Business Corporation Act, requiring that under SB318,
all corporations “consent to personal jurisdiction” and corporations doing business in
New Mexico “enjoy the same, but no greater rights and privileges as a domestic
corporation… and is subject to the same duties, restrictions, penalties and liabilities now
or hereafter imposed upon a domestic corporation of like character.” pp. 1-2. This
amendment to the Business Corporation Act may make it easier to establish personal
jurisdiction over corporations. This consent to registration places foreign corporations on
equal footing with domestically organized and registered corporations in New Mexico,
allowing and expanding personal jurisdiction and authority to commence suit against
corporations that prior to this change in law might have successfully argued they did not
manifest contact with New Mexico sufficient for liability. Under SB318’s amendment to
the Business Corporation Act, there would not be any need for plaintiffs in New Mexico
to establish minimum contacts against a corporation, including establishing the quantity
of contacts necessary to establish personal jurisdiction.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
SB318 conflicts with House Bills 61, 224, and 245 because these bills also amend Section 57-12-
2 NMSA 1978, part of UPA. SB318 conflicts with HB62 because it repeals Section 57-12-12
NMSA 1978, another section of UPA.
TECHNICAL ISSUES
Section 1 amends a section in the Business Corporation Act which does not appear to be
reflected in the title of SB318.
Page 21, lines 14-19: this description of an illegal firearm trade practice does not encompass all
the activities contained in the definition of this UPA violation at Section 1(J)(21) on page 9, lines Senate Bill 318 – Page 6
21-24.
Page 4, line 24: NMAG noted for the past duplicate bill that adding “or internet” to the definition
of “seller-initiated telephone sale” may have no effect on the scope or application of UPA, since
as a result of a substantial rewrite of this Act in 2003, this term does not appear anywhere else in
UPA. Further, most of the prohibitions in Section 57-12-22 are specific to telephone-based sales
solicitations and are not applicable to email or website-based solicitations.
FC/hj/SL2