0001| SENATE BILL 280
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0002| 42ND LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION,
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0003| 1996
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0004| INTRODUCED BY
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0005| JOSEPH A. FIDEL
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0006|
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0007|
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0008|
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0009|
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0010|
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0011| AN ACT
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0012| RELATING TO INSURANCE; AMENDING SECTIONS OF THE INSURANCE
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0013| HOLDING COMPANY LAW TO INCLUDE HEALTH MAINTENANCE ORGANIZATIONS
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0014| IN AN INSURER'S PAYMENT OF DIVIDENTS OR DISTRIBUTIONS.
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0015|
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0016| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0017| Section 1. Section 59A-37-2 NMSA 1978 (being Laws 1984,
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0018| Chapter 127, Section 617, as amended) is amended to read:
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0019| "59A-37-2. DEFINITIONS.--As used in Chapter 59A, Article
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0020| 37 NMSA 1978:
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0021| A. "acquire" means to come into possession or
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0022| control of, and "acquisition" means any agreement, arrangement
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0023| or activity the consummation of which results in a person
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0024| acquiring directly or indirectly the control of another person
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0025| and includes but is not limited to the acquisition of voting
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0001| securities or assets, bulk reinsurance and mergers;
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0002| B. "affiliate" means a person that directly or
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0003| indirectly is controlled by, is under common control with or
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0004| controls another person;
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0005| C. "control" means the possession of the power to
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0006| direct or cause the direction of the management and policies of
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0007| a person, whether directly or indirectly, through the ownership
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0008| of voting securities, by contract other than a commercial
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0009| contract for goods or nonmanagement services, or otherwise,
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0010| unless the power is the result of an official position with or
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0011| corporate office held by an individual. Control shall be
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0012| presumed to exist if any person, directly or indirectly, owns,
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0013| controls, holds with the power to vote or holds ten or more
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0014| percent of the voting securities of any other person. This
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0015| presumption may be rebutted by a showing, in the manner provided
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0016| by Section 59A-37-19 NMSA 1978, that control does not in fact
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0017| exist. The superintendent may determine, after furnishing all
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0018| persons in interest notice and an opportunity to be heard, that
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0019| control exists in fact, notwithstanding the absence of a
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0020| presumption to that effect, provided that the determination is
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0021| based on specific findings of fact in its support;
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0022| D. "insurance holding company" is a person which
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0023| controls an insurer; "insurance holding company system" means a
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0024| combination of two or more affiliated persons, at least one of
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0025| which is an insurer;
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0001| E. "insurer" means a person which undertakes, under
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0002| contract, to indemnify a person against loss, damage or
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0003| liability arising from an unknown or contingent future event.
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0004| The term does not include agencies, authorities or
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0005| instrumentalities of the United States, its possessions or
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0006| territories, the commonwealth of Puerto Rico, the District of
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0007| Columbia, a state or any of its political subdivisions, a
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0008| fraternal benefit society or a nonprofit medical and hospital
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0009| service association;
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0010| F. "person" means an individual, corporation,
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0011| association, partnership, joint stock company, trust,
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0012| unincorporated organization or any similar entity or combination
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0013| of entities;
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0014| G. "securityholder" means the owner of any security
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0015| of a person, including common stock, preferred stock, debt
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0016| obligations and any other security convertible into or
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0017| evidencing the right to acquire any of the foregoing;
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0018| H. "subsidiary" means an affiliate of a person
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0019| controlled by the person either directly or indirectly through
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0020| one or more intermediaries; [and]
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0021| I. "voting security" means a certificate evidencing
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0022| the ownership or indebtedness of a person, to which is attached
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0023| a right to vote on the management or policymaking of that person
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0024| and includes any security convertible into or evidencing a right
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0025| to acquire such a voting security; and
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0001| J. "health maintenance organization" means any
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0002| person which undertakes to provide or arrange for the delivery
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0003| of basic health care services to enrollees on a prepaid basis,
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0004| except for enrollee responsibility for co-payments or
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0005| deductibles."
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0006| Section 2. Section 59A-37-22 NMSA 1978 (being Laws 1984,
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0007| Chapter 127, Section 637, as amended) is amended to read:
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0008| "59A-37-22. DIVIDENDS AND OTHER DISTRIBUTIONS.--
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0009| A. No domestic stock insurer shall declare or
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0010| distribute any dividend to shareholders, other than a pro rata
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0011| distribution of any class of the insurer's own securities,
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0012| except out of earned surplus. For purposes of this section,
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0013| "earned surplus" means the portion of the surplus that
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0014| represents the net earnings, gains or profits, after deduction
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0015| of all losses, that have not been distributed to the
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0016| shareholders as dividends or transferred to stated capital or
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0017| capital surplus or applied to other purposes permitted by law,
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0018| but does not include twenty-five percent of the unrealized
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0019| appreciation of assets.
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0020| B. No domestic insurer shall pay an extraordinary
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0021| dividend or make any other extraordinary distribution to its
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0022| shareholders until:
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0023| (1) thirty days after the superintendent has
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0024| received notice of the declaration thereof and has not within
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0025| such period disapproved such payment; or
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0001| (2) the superintendent shall have approved such
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0002| payment within the thirty-day period.
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0003| C. For the purposes of Sections 59A-37-20 through
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0004| 59A-37-22 NMSA 1978, an extraordinary dividend or distribution
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0005| includes any dividend or distribution of cash or other property,
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0006| whose fair market value together with that of other dividends or
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0007| distributions made within the preceding twelve months exceeds
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0008| the lesser of ten percent of the insurer's surplus as regards
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0009| policyholders as of December 31 next preceding or the net gain
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0010| from operations of the insurer, if the insurer is either a
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0011| life insurer or a health maintenance organization, or the net
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0012| investment income, if the insurer is not a life insurer or a
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0013| health maintenance organization, not including realized capital
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0014| gains, for the twelve-month period ending December 31 next
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0015| preceding, but shall not include pro rata distributions of any
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0016| class of the insurer's own securities.
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0017| D. In determining whether a dividend or distribution
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0018| is extraordinary:
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0019| (1) an insurer other than a life insurer or a
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0020| health maintenance organization may carry forward net income
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0021| from the previous three calendar years that has not already been
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0022| paid out as dividends, which carry-forward shall be computed by
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0023| taking the net income from the second, third and fourth
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0024| preceding calendar years, not including realized capital gains,
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0025| less dividends paid in the third, second and immediate preceding
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0001| calendar years; and
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0002| (2) a life insurer or a health maintenance
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0003| organization may carry forward net gains from operations not
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0004| including realized capital gains from the previous two calendar
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0005| years that have not already been paid out as dividends, which
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0006| carry-forward shall be computed by taking the net gain from the
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0007| second and third preceding calendar years, not including
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0008| realized capital gains, less dividends paid in the second and
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0009| immediate preceding calendar years.
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0010| E. Notwithstanding any other provision of law, an
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0011| insurer may declare an extraordinary dividend or distribution
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0012| which is conditioned upon the superintendent's approval thereof,
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0013| and such a declaration shall confer no rights upon shareholders
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0014| until:
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0015| (1) the superintendent has approved the payment
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0016| of the dividend or distribution; or
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0017| (2) the superintendent has not disapproved the
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0018| payment within thirty days after he has received notice of the
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0019| declaration."
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0020|
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0021|
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0022|
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0023|
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0024|
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0025|
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0001| FORTY-SECOND LEGISLATURE
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0002| SECOND SESSION, 1996
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0003|
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0004|
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0005| JANUARY 31, 1996
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0006|
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0007| Mr. President:
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0008|
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0009| Your COMMITTEES' COMMITTEE, to whom has been referred
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0010|
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0011| SENATE BILL 280
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0012|
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0013| has had it under consideration and finds same to be GERMANE, PURSUANT
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0014| TO SENATE EXECUTIVE MESSAGE NUMBER TWENTY, and thence referred to the
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0015| PUBLIC AFFAIRS COMMITTEE.
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0016|
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0017| Respectfully submitted,
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0018|
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0019|
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0020|
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0021|
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0022| __________________________________
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0023| SENATOR MANNY M. ARAGON, Chairman
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0024|
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0025|
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0001|
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0002| Adopted_______________________ Not Adopted_______________________
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0003| (Chief Clerk) (Chief Clerk)
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0004|
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0005|
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0006| Date ________________________
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0007|
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0008|
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0009|
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0010| S0280CC1
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0011|
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0012| FORTY-SECOND LEGISLATURE
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0013| SECOND SESSION, 1996
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0014|
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0015|
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0016| February 5, 1996
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0017|
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0018| Mr. President:
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0019|
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0020| Your PUBLIC AFFAIRS COMMITTEE, to whom has been referred
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0021|
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0022| SENATE BILL 280
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0023|
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0024| has had it under consideration and reports same with recommendation that
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0025| it DO PASS, and thence referred to the CORPORATIONS &
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0001| TRANSPORTATION COMMITTEE.
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0002|
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0003| Respectfully submitted,
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0004|
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0005|
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0006|
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0007| __________________________________
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0008| Shannon Robinson, Chairman
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0009|
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0010|
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0011|
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0012| Adopted_______________________ Not Adopted_______________________
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0013| (Chief Clerk) (Chief Clerk)
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0014|
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0015|
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0016| Date ________________________
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0017|
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0018|
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0019| The roll call vote was 5 For 0 Against
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0020| Yes: 5
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0021| No: None
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0022| Excused: E. Jennings, Naranjo, Wiener
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0023| Absent: none
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0024|
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0025|
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0001| S0280PA1
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0002|
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0003|
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0004|
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0005| FORTY-SECOND LEGISLATURE
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0006| SECOND SESSION, 1996
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0007|
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0008|
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0009| February 9, 1996
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0010|
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0011| Mr. President:
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0012|
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0013| Your CORPORATIONS & TRANSPORTATION COMMITTEE, to whom
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0014| has been referred
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0015|
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0016| SENATE BILL 280
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0017|
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0018| has had it under consideration and reports same with recommendation that
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0019| it DO PASS.
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0020|
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0021| Respectfully submitted,
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0022|
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0023|
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0024|
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0025| __________________________________
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0001| Roman M. Maes, III, Chairman
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0002|
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0003|
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0004|
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0005| Adopted_______________________ Not Adopted_______________________
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0006| (Chief Clerk) (Chief Clerk)
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0007|
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0008|
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0009|
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0010| Date ________________________
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0011|
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0012|
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0013| The roll call vote was 5 For 0 Against
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0014| Yes: 5
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0015| No: 0
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0016| Excused: Kidd, Maloof, McKibben, Reagan
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0017| Absent: None
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0018|
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0019|
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0020| S0280CT1
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0021| SB0 State of New Mexico
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0022| House of Representatives
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0023|
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0024| FORTY-SECOND LEGISLATURE
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0025| SECOND SESSION, 1996
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0001|
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0002|
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0003| February 13, 1996
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0004|
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0005|
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0006| Mr. Speaker:
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0007|
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0008| Your BUSINESS AND INDUSTRY COMMITTEE, to whom has been
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0009| referred
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0010|
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0011| SENATE BILL 280
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0012|
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0013| has had it under consideration and reports same with
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0014| recommendation that it DO PASS.
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0015|
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0016| Respectfully submitted,
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0017|
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0018|
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0019|
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0020|
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0021| Fred Luna, Chairman
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0022|
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0023|
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0024| Adopted Not Adopted
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0025| (Chief Clerk) (Chief Clerk)
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0001|
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0002| Date
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0003|
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0004| The roll call vote was 9 For 0 Against
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0005| Yes: 9
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0006| Excused: Varela
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0007| Absent: Macko, J.G. Taylor
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0008|
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0009|
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0010|
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0011| S0280BI1
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