0001|                           HOUSE BILL 1116
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0002|     43rd legislature - STATE OF NEW MEXICO - first session, 1997
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0003|                            INTRODUCED BY
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0004|                           JERRY LEE ALWIN
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0005|     
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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|                                AN ACT
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0011|     RELATING TO WORTHLESS CHECKS; PROVIDING FOR REMEDIES OF PAYEE
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0012|     OF A WORTHLESS CHECK; PROVIDING FOR DEFENSES OF A DRAWER OF A
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0013|     WORTHLESS CHECK; REPEALING AND ENACTING A SECTION OF THE NMSA
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0014|     1978.
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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 56-14-1 NMSA 1978 (being Laws 1987,
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0018|     Chapter 14, Section 1) is repealed and a new Section 56-14-1
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0019|     NMSA 1978 is enacted to read:
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0020|          "56-14-1.  [<u>NEW MATERIAL</u>]  DEFINITIONS--WORTHLESS CHECK-
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0021|     -REMEDIES OF PAYEE--DEFENSES OF DRAWER--STOP PAYMENT
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0022|     PROCEDURES--REQUIREMENT FOR NOTICE.--
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0023|               A.  As used in this section:
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0024|                    (1)  "check" means a check, draft or order for
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0025|     the payment of money;         
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0001|                    (2)  "good-faith dispute" means a dispute
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0002|     between the drawer and the payee in which the drawer had a
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0003|     reasonable belief of his legal entitlement to withhold payment
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0004|     at the time he stopped payment on a check; 
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0005|                    (3)  "pass a worthless check" means to make,
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0006|     utter, draw or deliver a check upon a bank, depository or
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0007|     person that refuses to honor the check for any of the following
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0008|     reasons: 
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0009|                         (a)  lack of funds or credit in the

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0010|     account to pay the check;  
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0011|                         (b)  the person who wrote the check does
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0012|     not have an account with the drawee; or 
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0013|                         (c)  the person who wrote the check
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0014|     instructed the drawee to stop payment on the check; and
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0015|                    (4)  "person" means any legal entity. 
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0016|               B.  Except as provided otherwise in Subsection D, E,
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0017|     F or G of this section, a person who passes a worthless check
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0018|     is liable to the payee for the amount of the check and service
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0019|     charges payable to the payee for an amount not to exceed thirty
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0020|     dollars ($30.00) for the first worthless check passed and an
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0021|     amount not to exceed thirty dollars ($30.00) for each
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0022|     subsequent worthless check passed to that payee.
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0023|               C.  Except as provided otherwise in Subsection D, E,
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0024|     F or G of this section, a person who passes a worthless check
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0025|     is liable to the payee for damages equal to three times the
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0001|     amount of the check if the payee makes a written demand for
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0002|     payment and mails it by certified mail to the person who passed
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0003|     the worthless check and the written demand informs that person
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0004|     of:
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0005|                    (1)  the provisions of this section;
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0006|                    (2)  the name and address of the payee;
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0007|                    (3)  the amount of the worthless check; and
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0008|                    (4)  the amount of the service charge payable
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0009|     to the payee.
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0010|               D.  A person on whom a demand has been made pursuant
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0011|     to Subsection C of this section has thirty days from the date
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0012|     the demand was mailed to pay the amount of the worthless check,
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0013|     the amount of the service charge and the costs to mail the
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0014|     demand.  If he fails to pay in full the enumerated amounts
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0015|     within the thirty-day period he shall then be liable for the
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0016|     amount of the check, minus any partial payments made toward the
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0017|     check, the service charges or mailing costs within the thirty-
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0018|     day period and damages equal to three times the amount of the
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0019|     check, but the damages shall be limited to a maximum of one
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0020|     thousand five hundred dollars ($1,500) and shall be not less
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0021|     than one hundred dollars ($100).  If a person is liable for
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0022|     treble damages, he shall not be liable for service charges and
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0023|     mailing costs.
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0024|               E.  A person is not liable for service charges,
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0025|     mailing costs and treble damages pursuant to the provisions of
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0001|     Subsections B, C and D of this section if he stops payment on a
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0002|     check in order to resolve a good-faith dispute with the payee,
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0003|     unless the payee proves by clear and convincing evidence that
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0004|     there was no good-faith dispute.
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0005|               F.  A person is not liable for service charges
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0006|     pursuant to the provisions of Subsection B of this section if
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0007|     he presents the payee with written confirmation by his
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0008|     financial institution that:
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0009|                    (1)  the check was returned to the payee by the
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0010|     financial institution due to an error on the part of the
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0011|     financial institution; or 
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0012|                    (2)  his account had insufficient funds to pay
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0013|     the check when presented because of a delay in the regularly
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0014|     scheduled transfer or posting of a direct deposit of a social
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0015|     security or government benefit assistance payment.  
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0016|               G.  If the check was worthless because of a stop
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0017|     payment by the person passing it, the notice given pursuant to
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0018|     Subsection C of this section shall be in substantially the
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0019|     following form: 
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0020|                               "NOTICE
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0021|     To:  (name of person passing worthless check)
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0022|          (name of payee and address) is the payee of a check you
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0023|     passed for (dollar amount).  The check was not paid because you
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0024|     stopped payment, and the payee demands payment.  You may have a
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0025|     good-faith dispute about whether you owe the full amount.  If
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0001|     you do not have a good-faith dispute with the payee and fail to
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0002|     pay the payee within thirty days of the date this notice is
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0003|     mailed to you (1) the full amount of the check in cash, (2) a
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0004|     service charge of not more than thirty dollars ($30.00) for the
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0005|     first worthless check passed and a service charge of not more
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0006|     than thirty dollars ($30.00) for each subsequent worthless
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0007|     check passed and (3) the costs of mailing this notice to you,
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0008|     you could be sued and held responsible to pay at least both of
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0009|     the following:  the amount of the check and damages of at least
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0010|     one hundred dollars ($100) or, if higher, three times the
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0011|     amount of the check up to one thousand five hundred dollars
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0012|     ($1,500).  If the court determines that you do have a good-
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0013|     faith dispute with the payee, you will not have to pay the
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0014|     service charge, treble damages or mailing cost of this notice. 
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0015|     If you stopped payment because of a good-faith dispute with the
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0016|     payee, you should try to work out your dispute with the payee
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0017|     at the indicated address and telephone number (       ).  You
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0018|     may wish to contact a lawyer concerning your legal rights and
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0019|     responsibilities in this matter
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0020|                                   (name of sender of notice).".
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0021|               H.  The assignee of the payee or a holder of a check
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0022|     may demand, recover and enforce the service charges, damages
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0023|     and costs specified in this section to the same extent as the
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0024|     original payee of a worthless check.  
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0025|               I.  The person passing a worthless check is not
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0001|     liable more than once pursuant to this section for a specific
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0002|     check, service charge, damage or cost.
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0003|               J.  Nothing in this section changes the rights and
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0004|     obligations of parties pursuant to provisions of Chapter 55,
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0005|     Article 3 NMSA 1978."
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0006|                                                          State of New Mexico
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0007|                      House of Representatives
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0008|   
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0009|                      FORTY-THIRD LEGISLATURE
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0010|                        FIRST SESSION, 1997
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0011|   
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0012|   
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0013|                                                   March 4, 1997
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0014|   
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0015|   
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0016|   Mr. Speaker:
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0017|   
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0018|        Your BUSINESS AND INDUSTRY COMMITTEE, to whom
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0019|   has been referred
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0020|   
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0021|                       HOUSE BILL 1116
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0022|   
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0023|   has had it under consideration and reports same with
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0024|   recommendation that it DO PASS, amended as follows:
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0025|   
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0001|        1.   On page 2, line 12, strike "or" and insert in lieu
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0002|   thereof "and".
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0003|   
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0004|        2.   On page 2, lines 13 and 14, strike Subparagraph (c) in
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0005|   its entirety.
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0006|   
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0007|        3.   On page 4, line 13, after "deposit" insert "credit."
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0008|   and strike the remainder of the line and strike all of line 14.
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0009|   
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0010|        4.   On page 4, line 20, strike "of person passing
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0011|   worthless" and insert in lieu thereof "of drawer of the".,
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0012|   
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0013|   and thence referred to the JUDICIARY COMMITTEE.
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0014|   
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0015|                                 Respectfully submitted,
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0016|   
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0017|   
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0018|   
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0019|                                 <u>                                
</u>    |
<u></u>0020| <u>  
</u>    |
<u></u>0021| <u>                                </u>                             Fred Luna, Chairman
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0022|   
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0023|   
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0024|   Adopted <u>                    </u>     Not Adopted <u>                    
</u>    |
<u></u>0025| <u>   </u>
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0001|             (Chief Clerk)                       (Chief Clerk)
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0002|   
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0003|                        Date <u>            </u>
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0004|   
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0005|   The roll call vote was<u> 9 </u> For<u> 0 </u> Against
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0006|   Yes:      9
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0007|             Excused:  Gubbels, Hobbs, Rodella
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0008|             Absent:   Getty
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0009|   
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0010|   
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0011|   
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0012|   G:\BILLTEXT\BILLW_97\H1116                       State of New Mexico
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0013|                      House of Representatives
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0014|   
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0015|                      FORTY-THIRD LEGISLATURE
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0016|                        FIRST SESSION, 1997
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0017|   
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0018|   
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0019|                                                  March 12, 1997
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0020|   
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0021|   
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0022|   Mr. Speaker:
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0023|   
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0024|        Your JUDICIARY COMMITTEE, to whom has been referred
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0025|   
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0001|                 HOUSE BILL 1116, as amended
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0002|                               
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0003|   has had it under consideration and reports same with
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0004|   recommendation that it DO PASS.
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0005|   
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0006|                                 Respectfully submitted,
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0007|   
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0008|   
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0009|   
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0010|                                 <u>                                
</u>    |
<u></u>0011| <u>  
</u>    |
<u></u>0012| <u>                                </u>                             Thomas P. Foy, Chairman
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0013|   
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0014|   
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0015|   Adopted <u>                    </u>     Not Adopted <u>                    
</u>    |
<u></u>0016| <u>   </u>
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0017|             (Chief Clerk)                       (Chief Clerk)
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0018|   
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0019|                        Date <u>            </u>
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0020|   
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0021|   The roll call vote was<u> 8 </u> For<u> 0 </u> Against
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0022|   Yes:      8
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0023|             Excused:  King, Mallory, Rios, Sanchez, Stewart
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0024|             Absent:   None
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0025|   
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0001|   
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0002|   G:\BILLTEXT\BILLW_97\H1116
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