0001|                            HOUSE BILL 86
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0002|     43RD LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION, 1998
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0003|                            INTRODUCED BY
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0004|                          DONALD L. WHITAKER
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0005|     
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0006|                                   
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0007|     
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0008|             FOR THE REVENUE STABILIZATION AND TAX POLICY COMMITTEE
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0009|     
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0010|                                AN ACT
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0011|     RELATING TO SMALL CITIES ASSISTANCE; INCREASING THE ANNUAL
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0012|     DISTRIBUTIONS TO QUALIFYING SMALL CITIES FROM THE SMALL CITIES
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0013|     ASSISTANCE FUND.
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0014|     
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0015|     BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0016|          Section 1.  Section 3-37A-3 NMSA 1978 (being Laws 1979,
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0017|     Chapter 284, Section 3, as amended) is amended to read:
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0018|          "3-37A-3.  SMALL CITIES ASSISTANCE FUND--DISTRIBUTION.--
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0019|               A.  The "small cities assistance fund" is created
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0020|     within the state treasury.
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0021|               B.  On January 31 of each year, the local
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0022|     government division of the department of finance and
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0023|     administration shall certify to the taxation and revenue
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0024|     department the population of each municipality in the state.
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0025|               C.  On or before June 10 of each year, the taxation
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<center>- 1 -</center>

0001|     and revenue department shall compute the distribution share of
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0002|     each qualifying municipality.  The distribution share shall be
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0003|     an amount equal to the product of the qualifying
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0004|     municipality's population multiplied by the difference between
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0005|     the statewide per capita average and the municipal per capita
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0006|     average less the local tax effort of the qualifying
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0007|     municipality; provided that the distribution share shall not
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0008|     exceed <s>[thirty thousand dollars ($30,000)]</s> <u>fifty thousand
</u>    |
<u></u>0009| <u>    dollars ($50,000)</u>; and provided that any municipality with a
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0010|     population of less than ten thousand which does not qualify
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0011|     for a distribution or any qualifying municipality which
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0012|     qualifies for a distribution of less than <s>[fifteen thousand
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<s></s>0013| <s>    dollars ($15,000)]</s> <u>thirty thousand dollars ($30,000)</u> shall
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0014|     receive a distribution of <s>[fifteen thousand dollars
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<s></s>0015| <s>    ($15,000)]</s> <u>thirty thousand dollars ($30,000)</u>; and provided
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0016|     further that if the balance in the small cities assistance
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0017|     fund on the preceding May 30 is less than the sum of the
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0018|     distribution shares, <s>[then]</s> the taxation and revenue
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0019|     department shall first reduce the distribution share of each
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0020|     municipality whose distribution share is in excess of
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0021|     <s>[fifteen thousand dollars ($15,000)]</s> <u>thirty thousand
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<u></u>0022| <u>    dollars ($30,000)</u> in an amount calculated according to the
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0023|     following formula:
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0024|     municipal distribution share
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0025|     <u>    in excess of <s>[$15,000]</s> $30,000</u> X deficiency in fund
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<center>- 2 -</center>

0001|     sum of municipal distribution 
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0002|     shares in excess of <s>[$15,000]</s> <u>$30,000</u> 
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0003|     so long as no municipality's distribution share is reduced
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0004|     below <s>[fifteen thousand dollars ($15,000)]</s> <u>thirty thousand
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<u></u>0005| <u>    dollars ($30,000)</u>, and until each municipality's distribution
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0006|     share is reduced to <s>[fifteen thousand dollars ($15,000)]</s>
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0007|     <u>thirty thousand dollars ($30,000)</u>, if necessary; and
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0008|     provided further that if the sum of the distribution shares
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0009|     when each share is reduced to <s>[fifteen thousand dollars
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<s></s>0010| <s>    ($15,000)]</s> <u>thirty thousand dollars ($30,000)</u> is still in
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0011|     excess of the balance in the small cities assistance fund on
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0012|     the preceding May 30, <s>[then]</s> the taxation and revenue
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0013|     department shall reduce each municipality's <s>[fifteen thousand
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<s></s>0014| <s>    dollar ($15,000)]</s> <u>thirty thousand dollar ($30,000)</u>
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0015|     distribution share by a percentage equal to a percentage
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0016|     computed by dividing the amount by which the fund is
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0017|     insufficient by the sum of all the distribution shares.  The
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0018|     taxation and revenue department shall certify the amount of
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0019|     the distribution shares to the state treasurer.
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0020|               D.  The state treasurer shall distribute from the
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0021|     small cities assistance fund on or before June 15 of each year
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0022|     to each qualifying municipality the amount certified by the
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0023|     taxation and revenue department for each qualifying
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0024|     municipality for the period ending May 30 of the preceding
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0025|     year.
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<center>- 3 -</center>

0001|               E.  Immediately after distribution to
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0002|     municipalities from the small cities assistance fund but no
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0003|     later than June 30 of each year, the unexpended or
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0004|     unencumbered balance in the small cities assistance fund
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0005|     remaining after the distribution to the qualifying
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0006|     municipalities shall revert to the general fund.
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0007|               F.  Funds distributed under this section shall be
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0008|     placed in the general fund of the qualifying municipalities
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0009|     receiving distributions."
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0010|          Section 2.  EFFECTIVE DATE.--The effective date of the
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0011|     provisions of this act is July 1, 1998.
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0012|                              
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