A. The "small cities assistance fund" is created within the state treasury.

B. On or before January 31, 2004 and on or before January 31 of each subsequent year, the bureau of business and economic research located at the university of New Mexico shall certify to the taxation and revenue department the population of each municipality in the state.

C. On or before the last day of February of 2004 and of each subsequent year, the taxation and revenue department shall compute the amount to be distributed to each qualifying municipality as follows:

(1) the department first shall compute a distribution share for each qualifying municipality. The distribution share shall be an amount equal to the product of the qualifying municipality's population multiplied by the difference between the statewide per capita average and the municipal per capita average less the local tax effort of the qualifying municipality;

(2) in 2004 and subsequent years, the balance in the small cities assistance fund in February immediately after the distribution to the fund pursuant to Section 7-1-6.2 NMSA 1978 for the preceding January will be divided by the number of qualifying municipalities. The quotient will be rounded down to the nearest dollar and may be cited as the "target amount";

(3) if the target amount determined in Paragraph (2) of this subsection is less than or equal to the minimum amount, the target amount is the amount to be distributed to each qualifying municipality; and

(4) if the target amount exceeds the minimum amount, the amount to be distributed to all qualifying municipalities whose distribution share equals or is less than the minimum amount shall equal the minimum amount. The sum to be distributed to such municipalities shall be subtracted from the amount in the fund. The target amount then shall be increased by dividing the balance remaining in the fund by the number of remaining qualifying municipalities. The amount to be distributed to each remaining qualifying municipality shall equal the lesser of the municipality's distribution share or the increased target amount. If the distribution share of one or more of these remaining qualifying municipalities is less than the increased target amount, the balance of the fund is to be further reduced by the amount necessary to provide for a distribution to those municipalities of their distribution shares. The target amount is to be increased again by dividing the recomputed fund balance by the number of qualifying municipalities not yet provided for. Successive iterations of the process to increase the target amount shall occur until no remaining municipality's distribution share is less than the increased target amount.

D. The state treasurer shall distribute from the small cities assistance fund on or before March 1, 2004 and March 1 of each subsequent year to each qualifying municipality the amount certified by the taxation and revenue department for each qualifying municipality for the year.

E. Funds distributed in accordance with this section shall be placed in the general fund of the qualifying municipalities receiving distributions.

History: Laws 1979, ch. 284, § 3; 1981, ch. 215, § 2; 1983, ch. 214, § 2; 1984, ch. 25, § 1; 1986, ch. 20, § 1; 1987, ch. 291, § 1; 1988, ch. 129, § 1; 1999, ch. 170, § 2; 2003, ch. 220, § 3; 2004, ch. 112, § 1; 2009, ch. 144, § 1.

Cross references. — For distributions from tax administration suspense fund to small cities assistance fund, see 7-1-6.2 NMSA 1978.

The 2009 amendment, effective June 19, 2009, in Subsection B, deleted "local government division of the department of finance and administration" and added "bureau of business and economic research located at the university of New Mexico".

The 2004 amendment, effective May 19, 2004, amended Subsection C to delete immediately preceding Paragraph (1) "provided that the maximum amount to be distributed to a qualifying municipality shall not exceed fifty-six thousand dollars ($56,000)" and deleted the portion of Subsection E, which provided for a reversion to the general fund of unexpended and unencumbered balances.

The 2003 amendment, effective June 20, 2003, in Subsection B inserted "or before January 31, 2004 and on or before" preceding "January 31" near the beginning, and inserted "subsequent" preceding "year" near the beginning; rewrote Subsection C; in Subsection D, substituted "March 1, 2004 and March 1" for "June 15" near the middle, inserted "subsequent" following "of each" near the middle and deleted "period ending May 30 of the preceding" following "municipality for the" near the end; and deleted Subsection G concerning the definition of "minimum amount".

The 1999 amendment, effective July 1, 1999, substituted "the minimum amount" for "fifteen thousand dollars ($15,000)" throughout the section; in Subsection C, substituted "fifty thousand dollars ($50,000) if the qualifying municipality has a population of five thousand or less and thirty-five thousand dollars ($35,000) if the qualifying municipality has a population of more than five thousand but less than ten thousand" for "thirty thousand dollars ($30,000)", substituted "the minimum amount, the distribution share shall be the minimum amount" for "fifteen thousand dollars ($15,000) shall receive a distribution of fifteen thousand dollars ($15,000)", added "calculated pursuant to Subsection C of this section" following "sum of the distribution shares"; and added Subsection G.

The 1988 amendment, effective July 1, 1988, in Subsection B substituted "January 31" for "August 31", in Subsection C substituted "June 10" for "January 10" in the first sentence and twice substituted "May 30" for "December 31" in the second sentence, substituted "June 15" for "January 15" and "May 30" for "December 31" in Subsection D, and substituted "June 30" for "January 20" in Subsection E.

The 1987 amendment, effective June 19, 1987, rewrote the second sentence in Subsection C.