NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

The LFC is only preparing FIRs on bills referred to the Senate Finance Committee, the Senate Ways and Means Committee, the House Appropriations and Finance Committee and the House Taxation and Revenue Committee. The chief clerks are responsible for preparing and issuing all other bill analyses.

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(Parenthesis ( ) Indicate Revenue Decreases)

Duplicates/Conflicts with/Companion to/Relates to HB10, HB72

SOURCES OF INFORMATION

Taxation and Revenue Department (TRD)

New Mexico Municipal League

SUMMARY

Synopsis of SFC Amendment to SWMC Substitute

The SFC amendment decreased the proposed maximum distribution for cities with a population less than five thousand from $55 thousand to $50 thousand, and the maximum distribution for cities with a population between five and 10 thousand from $35 thousand to $30 thousand.

Fiscal Implications of the SFC amendment to SWMC Substitute

The fiscal impact of the SFC amendment is to reduce the increase in small cities assistance from $1.6 million to $1.34 million.

Synopsis of SWMC Substitute

The SWMC substitute for Senate Bills 102 and 253 would amend the small cities assistance act by dividing small cities into two groups: those with a population less than five thousand and those with a population between five thousand and 10 thousand. The maximum distribution for cities with a population less than five thousand would be $55 thousand and the minimum would be $35 thousand. For cities with a population between five and 10 thousand, the maximum distribution would be $35 thousand and the minimum would be $25 thousand.

Under current law the maximum distribution is $30 thousand and the minimum is $15 thousand for all small cities (population less than 10 thousand).

FISCAL IMPLICATIONS

The Small Cities Assistance distribution from the Assistance Fund is financed from ten percent of the Compensating Tax receipts. Amounts not distributed revert to the general fund. TRD estimates a recurring negative impact on the general fund in the amount of approximately $1.63 million (Reversions) and a recurring positive impact on the Municipal General Funds for the same amount.

DUPLICATION/COMPANIONSHIP/RELATIONSHIP

HB10 - would amend the Small Cities Assistance Act by categorizing cities into 2 two classes: less than 5000 persons; and 5001-10000 persons. Cities less than 5000 persons would be eligible to receive a minimum of $30,000 and a maximum of $50,000 from the assistance fund.;

HB72 - would amend the Small Cities Assistance Act by increasing the maximum limit a city of 10000 or less persons may receive in assistance from $30,000 to $60,000.

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