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(Parenthesis ( ) Indicate Revenue Decreases)

Duplicates HB10 (Whitaker) Amend Small Cities Assistance Act

SOURCES OF INFORMATION

Taxation and Revenue Department (TRD)

SUMMARY

Synopsis of Bill:

The legislation would amend the Small Cities Assistance Act by categorizing cities into 2 two classes: less than 5,000 persons; and 5,001-10,000 persons.

Cities with less than 5,000 persons would be eligible to receive a minimum of $30,000 and a maximum of $50,000 from the assistance fund.

Cities with populations between 5,001 and 10,000 would be eligible to receive a minimum of $20,000 and a maximum of $35,000 from the assistance fund.

Presently, all cities with populations less than 10,000 persons are eligible to receive the same minimum and maximum of $15,000 and $30,000 respectively.

FISCAL IMPLICATIONS

The Small Cities Assistance Fund distribution 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 $1.2 million (Reversions) and a recurring positive impact on the Municipal General Funds for the same amount.

The FY99 distribution is calculated to be $2.16 million, to approximately 82 municipalities that qualify for distribution pursuant to Section 3-37A-2 and 3-37A-3, NMSA 1978.

Attached is a table provided by TRD, detailing the affected municipalities and the estimated effect of this proposed legislation.

COMPANIONSHIP/RELATIONSHIP

SB102 (Altamirano) Small Cities Assistance Act - would amend the Small Cities Assistance Act by increasing the maximum limit a city of 10,000 or less persons may receive in assistance from $30,000 to $60,000.

HB72 (Wallace) Increase Small Cities Distribution -would amend the Small Cities Assistance Act by increasing the maximum limit a city of 10,000 or less persons may receive in assistance from $30,000 to $60,000.

JBE/gm

Attachment