2018 New Mexico Statutes
Chapter 57 - Trade Practices and Regulations
Article 8 - Trading Stamps
Section 57-8-4 - Conditions of issue; registration statement; bond; claims of holders; filing of claims; determination of validity; distribution of proceeds; amount of bond; new bond; registration fee.]

No trading stamp company shall distribute trading stamps in this state or shall redeem trading stamps hereafter issued therein until it has filed with the secretary of state:

A. a statement of registration accompanied by representative samples of its stamps, stamp collection books, stamp redemption catalogues and stamp distribution and redemption agreement forms currently used in this state. Each such statement shall provide the following information:

(1) the name and principal address of the company;

(2) the state of its incorporation or origin;

(3) the names and addresses of its principal officers, partners or proprietors;

(4) the address of its principal office in this state;

(5) the name and address of its principal officer, employee or agent therein;

(6) the addresses of the places where its stamps are redeemable within the state;

(7) a short form of its balance sheet, as at the end of its last fiscal year prior to such filing, certified by an independent public accountant; and

(8) unless the principal sum of the bond hereinafter required to be fied [filed] by the company is the maximum amount hereinafter required, a statement of the gross income from its business in this state as a trading stamp company during such last fiscal year, certified by an independent public accountant; and, simultaneously therewith;

B. a bond payable to this state and duly executed by the company and a corporate surety qualified to do business therein, which is conditioned upon the performance by the company of the obligation to redeem trading stamps issued by the retailers in this state, when they are duly presented for redemption by the rightful owners and holders.

In the event the trading stamp company defaults in performing such obligation, all rightful holders of trading stamps of such company shall be entitled to make claim against said bond. Retailers in possession of trading stamps for issuance to their customers shall also be deemed rightful holders entitled to make such claim.

In the event the trading stamp company defaults in the performance of its obligation to redeem trading stamps, any rightful holder may file within three months after such default a complaint with the secretary of state. Upon the filing of any such compaint [complaint] the secretary of state shall forthwith make a determination whether there has been a default. If the secretary of state shall determine that there has been such a default he shall give notice of such determination to the trading stamp company and if such default is not corrected within 10 days he shall publish notice of such default in three consecutive publications of one or more newspapers having general circulation throughout this state and therein require that proof of all claims for redemption of the trading stamps of the company shall be filed with him, together with the trading stamps upon which the claim is based, within three months after the date of the first such publication. The secretary of state promptly after the expiration of such period shall determine the validity of all claims so filed. Thereupon the secretary of state shall be paid by the surety such amount as shall be necessary to satisfy all valid claims so filed, together with reasonable administrative costs incident to the determination and payment of said claims, not exceeding the aggregate, however, of the principal sum of the bond. The secretary of state shall promptly thereafter make an equitable distribution of the proceeds of the bond, less such reasonable administrative costs, to such claimants and shall destroy the trading stamps so surrendered.

The principal sum of the bond shall be as follows:

If the issuer has not previously done business as a trading stamp company in this state, or if the company's gross income from such business in this state during its last fiscal year was not in excess of one hundred thousand dollars ($100,000): ten thousand dollars ($10,000); if such gross income exceeded one hundred thousand dollars ($100,000) but was not in excess of two hundred and fifty thousand dollars ($250,000): twenty-five thousand dollars ($25,000); if such gross income exceeded two hundred and fifty thousand dollars ($250,000) but was not in excess of five hundred thousand dollars ($500,000): fifty thousand dollars ($50,000); if such gross income exceeded five hundred thousand dollars ($500,000) but was not in excess of seven hundred fifty thousand dollars ($750,000): seventy-five thousand dollars ($75,000); and if such gross income exceeded seven hundred and fifty thousand dollars ($750,000): one hundred thousand dollars ($100,000).

On the effective date of each such new bond any and all liability on all bonds previously filed hereunder shall terminate and all rightful holders of trading stamps who shall prosecute their claims hereunder shall prosecute such claims solely against the new bond and only by filing proofs of claim with the secretary of state in the manner hereinbefore provided.

The statement of registration and the bond shall be filed with the secretary of state on or before the effective date of this act and annually thereafter on or before July 1 of each year. The trading stamp company shall pay a registration fee as follows: if the issuer has not previously done business as a trading stamp company in this state or if the company's gross income from such business in this state during its last fiscal year was not in excess of one hundred thousand dollars ($100,000): one hundred dollars ($100); if such gross income exceeded one hundred thousand dollars ($100,000) but was not in excess of two hundred and fifty thousand dollars ($250,000): two hundred and fifty dollars ($250); if such gross income exceeded two hundred and fifty thousand dollars ($250,000) but was not in excess of five hundred thousand dollars ($500,000): five hundred dollars ($500); if such gross income exceeded five hundred thousand dollars ($500,000): one thousand dollars ($1,000) to the secretary of state at the time of filing such registration statement.

History: 1953 Comp., § 49-9-4, enacted by Laws 1959, ch. 79, § 4.

Bracketed material. — The bracketed material was inserted by the compiler and is not part of the law.

Domestic corporation issuing own stamps has no duty to file. — A domestic corporation engaged in the retail trade and which issues its own trading stamps only to its customers, and which are redeemable only by it, does not have the duty of filing with the secretary of state the information and the bond required by Subsections A and B of this section. 1959-60 Op. Att'y Gen. No. 59-126.

Duty of filing prerequisite to doing business. — It is clear from the language of the act (57-8-1 to 57-8-6 NMSA 1978) that no trading stamp company shall distribute trading stamps in this state or shall redeem trading stamps issued within this state until it has filed with the secretary of state, the registration statement required by this section. 1959-60 Op. Att'y Gen. No. 59-141.

Independent public accountant must certify short form balance sheet. — From the language of Subparagraphs 7 and 8, of Subsection A of this section, it is apparent the statute specifically provides that a short form of balance sheet of a trading stamp company has to be certified by an independent public accountant before same is turned over to the secretary of state. 1959-60 Op. Att'y Gen. No. 59-127.

Accountant's certificate not limited to comparison of statement and ledgers. — This section provides clearly that the audit has to be made by an independent accountant. Further, the certificate cannot be limited to comparison of statements with amounts shown upon the ledgers of the filing stamp company. 1959-60 Op. Att'y Gen. No. 59-127.

Approval of bond mandatory requirement. — Each trading stamp company must submit a short form of balance sheet, certified by an independent accountant after a thorough audit is made and inventories are verified. The approval of the bond is a mandatory requirement and must be done under Subsection B, of this section, which provides for giving of the bond, the kind of bond, amount of bond and approval of same as to form and maximum amount. 1959-60 Op. Att'y Gen. No. 59-127.