2019 New Mexico Statutes
Chapter 3 - Municipalities
Article 32 - Industrial Revenue Bonds
Section 3-32-1 - Industrial Revenue Bond Act; definitions.

Wherever used in the Industrial Revenue Bond Act [Chapter 3, Article 32 NMSA 1978] unless a different meaning clearly appears in the context, the following terms whether used in the singular or plural shall be given the following respective interpretations:

A. "municipality" means any city, town or village in the state of New Mexico;

B. "project" means any land and building or other improvements thereon, the acquisition by or for a New Mexico corporation of the assets or stock of an existing business or corporation located outside the state of New Mexico to be relocated within or near the municipality in the state of New Mexico and all real and personal properties deemed necessary in connection therewith, whether or not now in existence, which shall be suitable for use by the following or by any combination of two or more thereof:

(1) any industry for the manufacturing, processing or assembling of any agricultural or manufactured products;

(2) any commercial enterprise in storing, warehousing, distributing or selling products of agriculture, mining or industry but does not include facilities designed for the sale of goods or commodities at retail or distribution to the public of electricity, gas, water or telephone or other services commonly classified as public utilities;

(3) any business in which all or part of the activities of the business involve the supplying of services to the general public or to governmental agencies or to a specific industry or customer but does not include establishments primarily engaged in the sale of goods or commodities at retail;

(4) any water distribution or irrigation system, including without limitation, pumps, distribution lines, transmission lines, towers, dams and similar facilities and equipment, designed to provide water to any vineyard or winery;

(5) any electric generation facility other than one for which both location approval and a certificate of convenience and necessity are required prior to commencing construction or operation of the facility, pursuant to the Public Utility Act [Chapter 62, Articles 1 to 6 and 8 to 13 NMSA 1978] and Electric Utility Industry Restructuring Act of 1999 [repealed]; and

(6) any 501(c)(3) corporation;

C. "governing body" means the board or body in which the legislative powers of the municipality are vested;

D. "property" means any land, improvements thereon, buildings and any improvements thereto, machinery and equipment of any and all kinds necessary to the project, operating capital and any other personal properties deemed necessary in connection with the project;

E. "mortgage" means a mortgage or a mortgage and deed of trust or the pledge and hypothecation of any assets as collateral security;

F. "health care services" means the diagnosis or treatment of sick or injured persons or medical research and includes the ownership, operation, maintenance, leasing and disposition of health care facilities such as hospitals, clinics, laboratories, x-ray centers and pharmacies and, for any small municipality only, office facilities for physicians;

G. "refinance a hospital or 501(c)(3) corporation project" means the issuance of bonds by a municipality and the use of all or substantially all of the proceeds to liquidate any obligations previously incurred to finance or aid in financing a project of any nonprofit corporation engaged in health care services, including nursing homes, or of any 501(c)(3) corporation, which would constitute a project under the Industrial Revenue Bond Act had it been originally undertaken and financed by a municipality pursuant to the Industrial Revenue Bond Act; and

H. "501(c)(3) corporation" means a corporation that demonstrates to the taxation and revenue department that it has been granted exemption from the federal income tax as an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended or renumbered.

History: 1953 Comp., § 14-31-1, enacted by Laws 1965, ch. 300; 1969, ch. 201, § 1; 1974, ch. 50, § 1; 1977, ch. 267, § 1; 1977, ch. 335, § 1; 1981, ch. 45, § 1; 1983, ch. 282, § 1; 2002, ch. 25, § 1; 2002, ch. 37, § 1.

Bracketed material. — The bracketed material was inserted by the compiler and is not part of the law. The Electric Utility Industry Restructuring Act of 1999 was repealed by Laws 2003, ch. 336, § 9, effective June 20, 2003.

Cross references. — For public aid to private enterprises prohibited, see N.M. Const., art. IX, § 14.

For the County Industrial Revenue Bond Act, see 4-59-1 NMSA 1978 et seq.

For Section 501(c)(3) of the Internal Revenue Code of 1986, see 26 U.S.C. § 501(c)(3).

2002 Multiple Amendments. — Laws 2002, ch. 25, § 1 and Laws 2002, ch. 37, § 1 enacted different amendments to this section that can be reconciled. Pursuant to 12-1-8 NMSA 1978, Laws 2002, ch. 37, § 1, as the last act signed by the governor, is set out above and incorporates both amendments. The amendments enacted by Laws 2002, ch. 25, § 1 and Laws 2002, ch. 37, § 1 are described below. To view the session laws in their entirety, see the 2002 session laws on NMOneSource.com.

Laws 2002, ch. 37, § 1, effective May 15, 2002, added Paragraphs B(5) and (6); in Subsection G, inserted "or 501(c)(3) corporation" and "or of any 501(c)(3) corporation"; and added Subsection H.

Laws 2002, ch. 25, § 1, effective May 15, 2002, added a new Paragraph B(5); in Subsection G, inserted "or 501(c)(3) corporation" and "or of any 501(c)(3) corporation"; and added Subsection H.

Pollution control facilities are "project". — Pollution control facilities which do not provide any substantial employment fall within the definition of the term "project" as contained in this section, because this section does not require that a "project" increase employment. Kennecott Copper Corp. v. Town of Hurley, 1973-NMSC-032, 84 N.M. 743, 507 P.2d 1074.

Issuance of bonds for pollution control facilities was constitutional. — The issuance of revenue bonds pursuant to the Industrial Revenue Bond Act to finance the cost of pollution control facilities was a proper "public purpose" for which such revenue bonds could be constitutionally issued. Kennecott Copper Corp. v. Town of Hurley, 1973-NMSC-032, 84 N.M. 743, 507 P.2d 1074.

Constitutionality of revenue bonds. — Revenue bonds which do not engage the general taxing power of the state, or a political subdivision thereof, are not within the prohibition of N.M. Const., art. IX, §§ 12 and 13, either as to the requirement for approval of a popular referendum, or as exceeding constitutional limitation on indebtedness. Village of Deming v. Hosdreg Co., 1956-NMSC-111, 62 N.M. 18, 303 P.2d 920.

Indebtedness created by revenue bonds are not the kind of "debt" the framers of the constitution had in mind and were talking about in N.M. Const., art. IX, §§ 12 and 13. Village of Deming v. Hosdreg Co., 1956-NMSC-111, 62 N.M. 18, 303 P.2d 920.

Constitutionality of bonds issued for purpose of promoting industry and trade. — Statute authorizing the issuance of bonds by municipalities to finance projects for the purpose of promoting industry and trade did not violate N.M. Const., art. IX, § 12 or 14. Village of Deming v. Hosdreg Co., 1956-NMSC-111, 62 N.M. 18, 303 P.2d 920.

Bonds issued to promote industry and trade did not violate public policy. — Statute authorizing the issuance of bonds by municipalities to finance projects for the purpose of promoting industry and trade did not present a program in violation of public policy. Village of Deming v. Hosdreg Co., 1956-NMSC-111, 62 N.M. 18, 303 P.2d 920.

Exclusion of businesses from act. — A business should be specifically excluded from the Industrial Revenue Bond Act before it may be deprived of the act's benefits. 1967 Op. Att'y Gen. No. 67-120.

In order for a business to qualify as a "project" it must be an existing business. 1960 Op. Att'y Gen. No. 60-114.

Unless an existing business is acquired, there is no valid "project" under this section. 1960 Op. Att'y Gen. No. 60-114, overruled to the extent it conflicts with 1960 Op. Att'y Gen. No. 60-172

"Primarily engaged in the sale of goods or commodities at retail," in Subsection B(3), means a facility which is "principally" or "chiefly" devoted to retail sales. 1981 Op. Att'y Gen. No. 81-32.

When office building qualifies as "project". — An office building available for general commercial leasing qualifies as a "project" if less than half the available space is leased to retail trade. 1981 Op. Att'y Gen. No. 81-32.

Issuance of bonds for financing machinery and equipment. — The word "project" as used in this section allows a municipality to issue revenue bonds for financing machinery and equipment to be used in an industry, the land and building of which are financed through other means. 1971 Op. Att'y Gen. No. 71-51.

Cemetery is not "project". — A cemetery cannot be purchased by a municipality under the Industrial Revenue Bond Act because a cemetery would not appear to fall within the definition of "project" as that term is used in this section. 1970 Op. Att'y Gen. No. 70-102.

Municipally owned portions of a project are tax exempt. If a municipality acquires land, and leases that land for the construction and operation of a project, the land owned by the municipality is not subject to an ad valorem tax. But the leasehold interest of the corporation operating the project, and all its raw materials, stock, equipment and buildings may be so taxed, and all of the privilege, excise and income taxes are still applicable. 1960 Op. Att'y Gen. No. 60-190.

Using bond proceeds. — Bond proceeds may be used to acquire land, buildings and improvements for sale or lease to a commercial airline already located in New Mexico. 1967 Op. Att'y Gen. No. 67-120.

Bond proceeds may be used to acquire a facility consisting of land, building and equipment, but not the assets and stock of a business. 1960 Op. Att'y Gen. No. 60-172.

Law reviews. — For article, "New Mexico Taxes: Taking Another Look", see 32 N.M.L. Rev. 351 (2002).

For article, "Ad Valorem Tax Status of a Private Lessee's Interest in Publicly Owned Property: Taxability of Possessory Interests in Industrial Projects under the New Mexico Industrial Revenue Bond Act," see 3 N.M.L. Rev. 136 (1973).

Am. Jur. 2d, A.L.R. and C.J.S. references. — 64 Am. Jur. 2d Public Securities and Obligations § 85.

Eminent domain: industrial park or similar development as public use justifying condemnation of private property, 62 A.L.R.4th 1183.

64 C.J.S. Municipal Corporations § 1957.