## Facts

- New Mexico’s Special Hospital District Act (SHDA) authorizes formation of special hospital districts by local petition and election, with requirements including compactness/contiguity and a general benefit to inhabitants.
- Voters approved creation of the South Central Colfax County Special Hospital District in Colfax County, including the Moreno Valley area (Angel Fire).
- Property owners from Moreno Valley, acting through their association and in the name of the State ex rel., challenged the statute and the district’s creation.
- The challengers asserted a disproportionate fiscal impact: Moreno Valley allegedly comprised about one-fourth of the district’s population but about one-half of its tax base.
- They also claimed Moreno Valley would receive little benefit because the hospital within the district was farther from Angel Fire than an existing hospital in Taos County, approximately 30 miles away.

## Issues

1. Whether the SHDA unconstitutionally delegates legislative power to private persons by allowing local electors to trigger creation of a hospital taxing district.
2. Whether district boundaries and resulting taxation violate constitutional limits (equal protection/tax uniformity) where some residents allegedly pay more and receive less direct benefit.
3. Whether alleged noncompliance with statutory requirements (e.g., compactness/contiguity and “benefit”) supports invalidating the statute or district on constitutional grounds.

## Decision

- The New Mexico Court of Appeals reversed the district court’s judgment and upheld the SHDA’s constitutionality.
- The court held the SHDA does not unconstitutionally delegate legislative power to private individuals; the Legislature set the policy and standards, and voters only decide whether to adopt the statutory scheme locally.
- The court rejected constitutional claims premised on disproportionate tax burden and alleged lack of benefit, applying a deferential review and declining to require precise equality of benefit relative to taxation.
- The case was remanded for further proceedings consistent with the appellate opinion.

## Legal Principles

- A statute may condition the operation of a legislatively defined policy on approval by local electors; allowing voters to activate a statutory scheme is not, by itself, an unconstitutional private delegation.
- Taxing district classifications and boundaries are generally reviewed deferentially; disparities in tax burden and benefit among areas within a district do not invalidate the scheme absent arbitrariness or irrationality.
- In evaluating “benefit” for inclusion in a public service district, courts may treat benefit broadly (general availability and support of services), and the existence of alternative services outside the district does not alone defeat validity.
- Statutory safeguards such as compactness and contiguity inform validity, but alleged imperfections in boundary effects do not automatically create a constitutional defect.

## Conclusion

The court sustained New Mexico’s hospital district statute and the district formed under it, holding that voter approval as a condition to implementation is permissible and that unequal tax-to-benefit effects within a hospital district do not amount to a constitutional violation absent an arbitrary or irrational scheme.


State ex rel. Angel Fire Home & Land Owners Ass’n, Inc. v. S. Cent. Colfax Cnty. Special Hosp. Dist., 797 P.2d 285 (N.M. Ct. App. 1990)