2019 New Mexico Statutes
Chapter 3 - Municipalities
Article 31 - Revenue Bonds
Section 3-31-1 - Revenue bonds; authority to issue; pledge of revenues; limitation on time of issuance.
A. In addition to any other law and constitutional home rule powers authorizing a municipality to issue revenue bonds, a municipality may issue revenue bonds pursuant to Chapter 3, Article 31 NMSA 1978 for the purposes specified in this section.
B. Utility revenue bonds may be issued for acquiring, extending, enlarging, bettering, repairing or otherwise improving a municipal utility or for any combination of the foregoing purposes. The municipality may pledge irrevocably any or all of the net revenues from the operation of the municipal utility or of any one or more of other such municipal utilities for payment of the interest on and principal of the revenue bonds.
C. Joint utility revenue bonds may be issued for acquiring, extending, enlarging, bettering, repairing or otherwise improving joint water facilities, sewer facilities, gas facilities or electric facilities or for any combination of the foregoing purposes. The municipality may pledge irrevocably any or all of the net revenues from the operation of these municipal utilities for the payment of the interest on and principal of the bonds.
D. Gross receipts tax revenue bonds may be issued for any municipal purpose. A municipality may pledge irrevocably any or all of the gross receipts tax revenue received by the municipality pursuant to Section 7-1-6.4 or 7-1-6.12 NMSA 1978 to the payment of the interest on and principal of the gross receipts tax revenue bonds or for any area of municipal government services. A law that imposes or authorizes the imposition of a tax authorized by the Municipal Local Option Gross Receipts Taxes Act [Chapter 7, Article 19D NMSA 1978] or that affects the tax, or a law supplemental thereto or otherwise appertaining thereto, shall not be repealed or amended or otherwise directly or indirectly modified in such a manner as to impair adversely any outstanding revenue bonds that may be secured by a pledge of such tax unless the outstanding revenue bonds have been discharged in full or provision has been fully made therefor. Revenues in excess of the annual principal and interest due on gross receipts tax revenue bonds secured by a pledge of gross receipts tax revenue may be accumulated in a debt service reserve account. The governing body of the municipality may appoint a commercial bank trust department to act as trustee of the gross receipts tax revenue and to administer the payment of principal of and interest on the bonds.
E. Gasoline tax revenue bonds may be issued for laying off, opening, constructing, reconstructing, resurfacing, maintaining, acquiring rights of way, repairing and otherwise improving municipal buildings, alleys, streets, public roads and bridges or any combination of the foregoing purposes. The municipality may pledge irrevocably any or all of the gasoline tax revenue received by the municipality to the payment of the interest on and principal of the gasoline tax revenue bonds.
F. Project revenue bonds may be issued for acquiring, extending, enlarging, bettering, repairing, improving, constructing, purchasing, furnishing, equipping and rehabilitating any revenue-producing project, including, where applicable, purchasing, otherwise acquiring or improving the ground therefor, including acquiring and improving parking lots, or for any combination of the foregoing purposes. The municipality may pledge irrevocably any or all of the net revenues from the operation of the revenue-producing project for which the particular project revenue bonds are issued to the payment of the interest on and principal of the project revenue bonds. The net revenues of any revenue-producing project may not be pledged to the project revenue bonds issued for a revenue-producing project that clearly is unrelated in nature; but nothing in this subsection shall prevent the pledge to such project revenue bonds of any revenues received from existing, future or disconnected facilities and equipment that are related to and that may constitute a part of the particular revenue-producing project. A general determination by the governing body that any facilities or equipment is reasonably related to and constitutes a part of a specified revenue-producing project shall be conclusive if set forth in the proceedings authorizing the project revenue bonds.
G. Fire district revenue bonds may be issued for acquiring, extending, enlarging, bettering, repairing, improving, constructing, purchasing, furnishing, equipping and rehabilitating any fire district project, including, where applicable, purchasing, otherwise acquiring or improving the ground therefor, or for any combination of the foregoing purposes. The municipality may pledge irrevocably any or all of the revenues received by the fire district from the fire protection fund as provided in the Fire Protection Fund Law [Chapter 59A, Article 53 NMSA 1978] and any or all of the revenues provided for the operation of the fire district project for which the particular bonds are issued to the payment of the interest on and principal of the bonds. The revenues of any fire district project shall not be pledged to the bonds issued for a fire district project that clearly is unrelated in its purpose; but nothing in this section prevents the pledge to such bonds of any revenues received from existing, future or disconnected facilities and equipment that are related to and that may constitute a part of the particular fire district project. A general determination by the governing body of the municipality that any facilities or equipment is reasonably related to and constitutes a part of a specified fire district project shall be conclusive if set forth in the proceedings authorizing the fire district bonds.
H. Law enforcement protection revenue bonds may be issued for the repair and purchase of law enforcement apparatus and equipment that meet nationally recognized standards. The municipality may pledge irrevocably any or all of the revenues received by the municipality from the law enforcement protection fund distributions pursuant to the Law Enforcement Protection Fund Act [Chapter 29, Article 13 NMSA 1978] to the payment of the interest on and principal of the law enforcement protection revenue bonds.
I. Except for the purpose of refunding previous revenue bond issues, no municipality may sell revenue bonds payable from pledged revenues after the expiration of two years from the date of the ordinance authorizing the issuance of the bonds or, for bonds to be issued and sold to the New Mexico finance authority as authorized in Subsection C of Section 3-31-4 NMSA 1978, after the expiration of two years from the date of the resolution authorizing the issuance of the bonds. However, any period of time during which a particular revenue bond issue is in litigation shall not be counted in determining the expiration date of that issue.
History: 1953 Comp., § 14-30-1, enacted by Laws 1973, ch. 395, § 3; 1979, ch. 311, § 1; 1981, ch. 6, § 1; 1982, ch. 38, § 1; 1983, ch. 57, § 1; 1985, ch. 81, § 8; 1985, ch. 86, § 1; 1989, ch. 356, § 1; 1990, ch. 99, § 43; 1991, ch. 9, § 8; 1995, ch. 141, § 1; 1998, ch. 90, § 1; 1999, ch. 199, § 1; 2007, ch. 148, § 2; 2019, ch. 274, § 1.
ANNOTATIONSRepeals and reenactments. — Laws 1973, ch. 395, § 3, repealed former 14-30-1, 1953 Comp., relating to issuance of revenue bonds, and enacted a new 14-30-1, 1953 Comp.
Cross references. — For revenue bond issues of water or natural gas associations, see 3-28-10 NMSA 1978 et seq.
For the Pollution Control Revenue Bond Act, see 3-59-1 NMSA 1978 et seq.
For destruction of documentary evidence of extinguished public debt, see 6-10-62 NMSA 1978.
For the Municipal Local Option Gross Receipts Taxes Act, see 7-19D-1 NMSA 1978.
The 2019 amendment, effective July 1, 2019, provided that gross receipts tax revenue bonds may be issued for any municipal purpose, removed provisions specifying purposes for which gross receipts tax revenue bonds may be issued, removed the definitions of certain terms as used in Chapter 3, Article 31 NMSA 1978, and removed provisions related to economic development gross receipts tax revenue bonds and municipal higher education facilities gross receipts tax revenue bonds; added new subsection designation "A" and redesignated former Subsections A through C as Subsections B through D, respectively; in Subsection A, deleted the last sentence which defined "pledged revenues"; in Subsection B, deleted "These bonds are sometimes referred to in Chapter 3, Article 31 NMSA 1978 as 'utility revenue bonds' or 'utility bonds'"; in Subsection C, deleted "These bonds are sometimes referred to in Chapter 3, Article 31 NMSA 1978 as 'utility revenue bonds' or 'utility bonds'"; in Subsection D, deleted "For the purposes of this subsection, 'gross receipts tax revenue bonds' means gross receipts tax revenue bonds or sales tax revenue bonds.", and after "bonds may be issued for any", deleted the remainder of the introductory clause and deleted former Paragraphs (1) through (10) and added "municipal purpose. A", and after "municipal government services", deleted "including but not limited to those specified in Subsection C of Section 7-19D-9 NMSA 1978, or for public purposes authorized by municipalities having constitutional home rule charters"; deleted former Subsection D; in Subsection E, deleted "As used in Chapter 3, Article 31 NMSA 1978, 'gasoline tax revenue bonds' means the bonds authorized in this subsection, and 'gasoline tax revenue' means all or portions of the amounts of tax revenues distributed to municipalities pursuant to Sections 7-1-6.9 and 7-1-6.27 NMSA 1978, as from time to time amended and supplemented."; in Subsection F, deleted former Paragraphs F(1) and F(2); and deleted former Subsections I and J and redesignated former Subsection K as Subsection I.
Temporary provisions. — Laws 2019, ch. 274, § 15 provided:
A. The repeal of and changes to certain taxes made in this act shall not impair outstanding bonds that are secured by a pledge of those taxes.
B. If a municipality or county has issued a revenue bond that is secured by a pledge of a tax being amended or repealed by this act, the revenue received by the municipality or county is impressed with the obligation to repay the outstanding bond and is dedicated to that repayment until the bond is fully discharged or otherwise provided for in full.
C. If a municipality or county has dedicated any amount of revenue attributable to a tax being amended or repealed by this act, the municipality or county shall continue to dedicate the same amount of revenue attributable to the tax until the ordinance dedicating the revenue expires, the term of the dedication expires, the governing body acts to change the dedication or, in the case of bonded indebtedness, the debt is fully discharged or otherwise provided for in full.
The 2007 amendment, effective July 1, 2007, added Subsection J providing for municipal higher education facilities gross receipts tax revenue bonds.
The 1999 amendment, effective April 6, 1999, rewrote the second undesignated paragraph following Subsection C(10), relating to accumulation of revenues in excess of the annual principal and interest due on gross receipts tax revenue bonds secured by a pledge of gross receipts tax revenue into debt service reserve accounts, substituted "the Fire Protection Fund Law" for "Sections 59A-53-1 through 59A-53-17 NMSA 1978" in Subsection G, and substituted "the Law Enforcement Protection Fund Act" for "Sections 29-13-1 through 29-13-9 NMSA 1978" in Subsection H, and made minor stylistic changes.
The 1998 amendment, effective May 20, 1998, added Paragraph C(10); in the undesignated paragraph following Paragraph C(10), substituted "7-1-6.4 or 7-1-6.12 NMSA 1978" for "7-1-6.4, 7-1-6.12 or 7-19A-6 NMSA 1978 or pursuant to Municipal Infrastructure Gross Receipts Tax Act" and "Subsection C" for "Subsection B" in the first sentence; added the undesignated paragraph immediately preceding Subsection D; in Subsection D, in the first sentence, inserted "municipal" preceding "jails" and "regional jails or juvenile detention facilities" preceding ", libraries", at the end of the second sentence, substituted "the Municipal Local Option Gross Receipts Taxes Act" for "Section 7-19-4 NMSA 1978"; in Subsection E, deleted "7-1-6.14" following "7-1-6.9"; added Subsection I and redesignated former Subsection I as Subsection J; and made minor stylistic changes throughout the section.
The 1995 amendment, effective April 5, 1995, substituted "Subsections A through I" for "Subsections A through F" in the introductory paragraph, deleted "making additions to" in Paragraph (6) of Subsection C, substituted "Section 7-19D-9" for Section 7-19-4" in the first sentence of the second paragraph in Subsection C, substituted "includes but is not" for "shall include but shall not be" and substituted "Subsection C of this section" for "this Subsection" in Subsection D, added the last sentence in Subsection D, added Subsections G and H, redesignated former Subsection G as Subsection I, inserted "or, for bonds to be issued and sold to the New Mexico finance authority as authorized in Subsection C of Section 3-31-4 NMSA 1978, after the expiration of two years from the date of the resolution authorizing the issuance of the bonds" in the first sentence of Subsection I, and made a minor stylistic change in the second paragraph of Subsection C.
The 1991 amendment, effective July 1, 1991, in the first sentence of the final paragraph of Subsection C, inserted "or pursuant to the Municipal Infrastructure Gross Receipts Tax Act" and made related stylistic changes, and made minor stylistic changes in Paragraph (5) of Subsection C and in Subsection F.
The 1990 amendment, effective March 5, 1990, in Paragraph (9) of Subsection C, inserted "constructing" and "solid waste facilities" in the first paragraph and made minor stylistic changes in the third paragraph thereof.
Obligations payable from special funds. — Revenues derived from the county's share of the gross receipts and gasoline taxes are within the special fund doctrine, since the legislature has expressly authorized the use of such funds for the issuance of revenue bonds. Bolton v. Board of Cnty. Comm'rs, 1994-NMCA-167, 119 N.M. 355, 890 P.2d 808, cert. denied, 119 N.M. 311, 889 P.2d 1233 (1995).
Waterworks revenue bonds did not create debt. — Waterworks revenue bonds, payable exclusively from net revenues thereof, did not create a "debt" within the constitutional provision requiring a vote and tax levy. Seward v. Bowers, 1933-NMSC-056, 37 N.M. 385, 24 P.2d 253.
Municipal swimming pools are held to constitute "public utilities." The statute unquestionably gives municipalities the right to pledge the net income from public utilities by means of revenue bonds. A municipality may issue revenue bonds against the income from a municipal swimming pool, inasmuch as a swimming pool is a public utility. 1956 Op. Att'y Gen. No. 56-6458.
Law reviews. — For comment, "The Last Bastion Crumbles: All Property Restrictions on Franchise Are Unconstitutional," see 1 N.M.L. Rev. 403 (1971).
Am. Jur. 2d, A.L.R. and C.J.S. references. — 64 Am. Jur. 2d Public Securities and Obligations § 85.
Negotiability of municipal bonds as affected by reference to fund from which they are to be paid, 42 A.L.R. 1027.
64 C.J.S. Municipal Corporations § 1957.
