2019 New Mexico Statutes
Chapter 6 - Public Finances
Article 15 - Finances of Counties, Municipalities and School Districts
Section 6-15-11 - Refunding bonds of county, municipality or school district; approval of issuance; purpose.

The governing body of any county, municipality or school district in this state may, with the approval of the department of finance and administration, issue bonds in such form as the governing body may determine, to be denominated refunding bonds, for the purpose of refunding any of the general obligation bonded indebtedness of the county, municipality or school district which has or will become due and payable or which has or will become payable at the option of the county, municipality or school district or by consent of the bondholders or by any lawful means.

History: Laws 1927, ch. 128, § 1; C.S. 1929, § 90-1101; 1941 Comp., § 7-624; 1953 Comp., § 11-6-23; Laws 1963, ch. 234, § 1; 1983, ch. 265, § 29.

Constitutionality. — This act (Sections 6-15-11 to 6-15-19 NMSA 1978) does not violate the constitutional limitation (N.M. Const., art. IX, §§ 11, 15) where bonds are issued to refund a valid obligation. Southwest Sec. Co. v. Board of Educ., 1936-NMSC-008, 40 N.M. 59, 54 P.2d 412.

Municipality entitled to use discretion in refunding portion of issue. — Where municipality issued 51/2% water bonds, part payable in 30 years and part optional in 20 years, it was entitled to refund a portion of the issue, amounting to about one-half, and to use its discretion in selecting the bonds to be refunded, and a bondholder had no right to insist that his bond be called or not called before maturity. Town of Alamogordo v. Beall, 1937-NMSC-003, 41 N.M. 93, 64 P.2d 384.

Approval of form and interest rate included in initial approval. — If the state tax commission approved the issuance of school district bonds, it necessarily approved the form thereof and the rate of interest. Southwest Sec. Co. v. Board of Educ., 1936-NMSC-008, 40 N.M. 59, 54 P.2d 412 (decided under former law).

Refunding indebtedness by issuing bonds exceeding amount of indebtedness. — Code 1915, § 3646 (repealed) authorized a city to refund its indebtedness, evidenced by judgments on past-due bonds, by issuing 5% bonds in an amount exceeding the amount of the indebtedness sought to be refunded, so that a sale thereof at not less than 95 would produce a sufficient fund. Padilla v. Socorro, 1923-NMSC-003, 28 N.M. 354, 212 P. 337 (decided under former law).

General obligation water refunding bonds may not be issued. — Water revenue bonds may not be refunded in whole or in part by the issuance of general obligation water refunding bonds for the reason that the statutory grant of such power is lacking. 1960 Op. Att'y Gen. No. 60-161.

Refunding bonds in amount that exceeds outstanding bonds. — Subject to approval of the department of finance and administration, a board of education may issue general obligation refunding bonds in a principal amount that is greater than the principal amount of the outstanding bonds being refunded, provided the proceeds of the refunding bonds are used only for the purpose of refunding existing school district general obligation indebtedness and not for new capital outlay projects, operating costs of a school district or other purposes besides refunding. 2001 Op. Att'y Gen. No. 01-03.

Water revenue bonds do not constitute "bonded indebtedness" of municipality inasmuch as such revenue bonds are payable only from the net revenue of the water works system. 1960 Op. Att'y Gen. No. 60-161.

Am. Jur. 2d, A.L.R. and C.J.S. references. — 64 Am. Jur. 2d Public Securities and Obligations §§ 222 to 227.

Power of municipality or other governmental body to issue refunding bonds to retire obligation in respect of which the creation and maintenance of a sinking fund by taxation is required. 157 A.L.R. 794.

20 C.J.S. Counties §§ 218 to 226; 64 C.J.S. Municipal Corporations §§ 1651 to 1653; 79 C.J.S. Schools and School Districts § 360.