A. Any municipality having issued revenue bonds as authorized in Sections 3-31-1 through 3-31-7 NMSA 1978 or pursuant to any other laws enabling the governing body of any municipality having issued such revenue bonds payable only out of the pledged revenue may issue refunding revenue bonds for the purpose of refinancing, paying and discharging all or any part of such outstanding bonds of any one or more or all outstanding issues:
(1) for the acceleration, deceleration or other modification of the payment of such obligations, including without limitation any capitalization of any interest thereon in arrears or about to become due for any period not exceeding one year from the date of the refunding bonds;
(2) for the purpose of reducing interest costs or effecting other economies;
(3) for the purpose of modifying or eliminating restrictive contractual limitations pertaining to the issuance of additional bonds, otherwise concerning the outstanding bonds or to any facilities relating thereto; or
(4) for any combination of such purposes.
B. The municipality may pledge irrevocably for the payment of interest and principal on refunding bonds the appropriate pledged revenues, which may be pledged to an original issue of bonds as provided in Section 3-31-1 NMSA 1978, and it may pledge revenues from one source to the payment of bonds that refund bonds payable from a different source of revenue.
C. Bonds for refunding and bonds for any purpose permitted by Section 3-31-1 NMSA 1978 may be issued separately or issued in combination in one series or more.
D. In addition to pledging of utility revenues to the payment of the refunding revenue bonds that refund utility bonds or joint utility bonds as provided in Section 3-23-4 NMSA 1978, the municipality may grant by ordinance, or by resolution if the refunding revenue bonds are issued and sold to the New Mexico finance authority pursuant to Subsection C of Section 3-31-4 NMSA 1978, a mortgage of the municipal utility that has been solely financed by revenue bonds to the bondholder or a trustee for the benefit and security of the holders of the refunding revenue bonds.
History: 1953 Comp., § 14-30-8, enacted by Laws 1965, ch. 300; 1967, ch. 244, § 4; 1969, ch. 179, § 1; 1985, ch. 86, § 4; 1987, ch. 170, § 2; 1995, ch. 141, § 4; 2019, ch. 72, § 1.
ANNOTATIONSCross references. — For refunding bonds authorized without election, see N.M. Const., art. IX, § 15.
For no power or jurisdiction of public service commission to regulate or supervise rates or service of municipal utility, see 62-6-4 NMSA 1978.
For local option election to make municipality subject to the Public Utility Act, see 62-6-5 NMSA 1978.
The 2019 amendment, effective July 1, 2019, removed provisions that restricted municipalities from using gross receipts tax revenue to repay utility bonds, joint utility bonds, or gas tax revenue bonds, from using gas tax revenue to repay utility bonds, joint utility bonds or gross receipts tax revenue bonds, and from using revenues of any utility or joint utility to repay gross receipts tax revenue bonds or gasoline tax revenue bonds, and authorized municipalities to pledge revenues from one source to the payment of bonds that refund bonds payable from a different source of revenue; and in Subsection B, deleted "Nothing in this section shall permit the pledge of the gross receipts tax revenue to the payment of bonds that refund utility bonds, joint utility bonds or gasoline tax revenue bonds or the pledge of gasoline tax revenue to the payment of bonds that refund utility bonds, joint utility bonds or gross receipts tax revenue bonds or the pledge of any revenues of any utility or joint utility to the payment of bonds that refund gross receipts tax revenue bonds or gasoline tax revenue bonds" and added "and it may pledge revenues from one source to the payment of bonds that refund bonds payable from a different source of revenue".
The 1995 amendment, effective April 5, 1995, inserted "or by resolution if the refunding revenue bonds are issued and sold to the New Mexico finance authority pursuant to Subsection C of Section 3-31-4 NMSA 1978," in the first sentence in Subsection D, and made minor stylistic changes in Subsections B and D.
Applicability to use of proceeds. — This section was intended to govern the procedure for refunding prior bond issues; it imposes no restriction upon the use of proceeds from an original bond issue. 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).
This section does not preclude a county from utilizing a portion of revenue bond proceeds to refinance road building equipment, which the county had previously contracted to acquire under lease-purchase agreements. 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).
Am. Jur. 2d, A.L.R. and C.J.S. references. — Funding or refunding obligations as subject to conditions respecting limitation of indebtedness or approval by voters, 97 A.L.R. 442.
Power of municipality to issue refunding bonds to retire obligation in respect of which the creation and maintenance of a sinking fund by taxation is required by constitutional or statutory provision, 157 A.L.R. 794.
Governmental unit's power to issue bonds as implying power to refund them, 1 A.L.R.2d 134.