A. To pay all or any part of the cost of the improvement, including those items set out in Subsection C of Section 3-33-11 NMSA 1978, the governing body may proceed pursuant to the provisions of Section 3-33-14.1 NMSA 1978 or may issue in the name of the municipality bonds in such form as the governing body may determine or assignable certificates in an amount not exceeding the total cost of the improvement and maturing not more than twenty years from the date of issuance. If the bonds or assignable certificates recite that:
(1) the proceedings relating to making the improvement and levying the assessments as provided in Section 3-33-22 NMSA 1978 or placing the preliminary lien as provided in Section 3-33-11 NMSA 1978 to pay for the improvement have been done in compliance with law; and
(2) all prerequisites to the fixing of the assessment lien or placing the preliminary lien against the tract or parcel of land benefited by the improvement have been performed, such recital shall be conclusive evidence of the facts recited.
B. The assignable certificates shall:
(1) declare the liability of the owner of the tract or parcel of land so assessed or the liability of the tract or parcel of land so assessed for payment of the assessment, interest and penalties;
(2) fix the terms and conditions of the certificates; and
(3) accurately describe the tract or parcel of land covered by the certificate.
C. The bonds shall:
(1) recite the terms and conditions for their issuance;
(2) be payable from money collected from the preliminary assessment lien authorized in Section 3-33-11 NMSA 1978 and, if so payable, also payable from the proceeds of bonds payable from the final assessment lien authorized in Section 3-33-22 NMSA 1978; or
(3) be payable from the money collected from the assessments authorized in Section 3-33-22 NMSA 1978; provided that if assessments are made payable over more than one period of time as permitted by Section 3-33-23 NMSA 1978, specified portions of the bonds may be payable from money collected from those assessments payable over that period of time that generally corresponds to the period of time over which such specified portions of the bonds are payable; and
(4) bear a rate or rates of interest that shall not exceed the rate of interest on the deferred installments of the assessments or, if more than one rate of interest is specified for assessments as permitted by Section 3-33-23 NMSA 1978, on that portion of the deferred installments of assessments from which that specified portion of the bonds may be payable. Payment of the bonds issued for the construction of a project described in Subsection A of Section 3-33-3 NMSA 1978 may be supplemented from gasoline tax money in the street improvement fund authorized by Section 3-34-1 NMSA 1978 on or before a date not more than twelve months after the last deferred installment of an assessment is due from the owner of a tract or parcel of land so assessed.
D. The bonds may be issued to the contractor in payment for the construction of the improvement or may be issued and sold:
(1) in payment of the municipality's proportion of the cost of the improvement;
(2) in payment of the proportionate cost if the improvement is done in cooperation with another governmental agency;
(3) in payment of the construction of the improvement done under contract; or
(4) in reimbursement to the municipality if the municipality constructed the improvement with municipally owned or leased equipment and municipal employees.
E. Any municipality creating a street improvement fund as authorized by Section 3-34-1 NMSA 1978 may contract for the issuance and sale of bonds or assignable certificates.
F. Bonds or assignable certificates may be sold at public or private sale at a discount.
History: 1953 Comp., § 14-32-17, enacted by Laws 1965, ch. 300; 1970, ch. 51, § 1; 1979, ch. 108, § 2; 1983, ch. 265, § 8; 1991, ch. 199, § 15; 2001, ch. 312, § 8.
ANNOTATIONSCross references. — For refunding improvement bonds, see 3-33-39 NMSA 1978 et seq.
For destruction of documentary evidence of extinguished public debt, see 6-10-62 NMSA 1978.
The 2001 amendment, effective June 15, 2001, inserted the reference to 3-33-14.1 NMSA 1978, in Subsection A.
The 1991 amendment, effective April 4, 1991, in Subsection A, inserted "including those items set out in Subsection C of Section 3-33-11 NMSA 1978" near the beginning and added "and maturing not more than twenty years from the date of issuance" at the end of the first sentence, inserted "as provided in Section 3-33-22 NMSA 1978 or placing the preliminary lien as provided in Section 3-33-11 NMSA" in Paragraph (1) and inserted "or placing the preliminary lien" in Paragraph (2); and in Subsection C, added Paragraph (2), designated former Paragraphs (2) and (3) as Paragraphs (3) and (4), substituted "project described in Subsection A of Section 3-33-3 NMSA 1978" for "street, alley, curb, gutter or sidewalk project" in the first full sentence in Paragraph (4), and made minor stylistic changes.
Construction of statute. — Statute was remedial in nature and did not impair the obligation of contract, and had application to bonds issued prior to its enactment. City of Albuquerque v. Middle Rio Grande Conservancy Dist., 1941-NMSC-021, 45 N.M. 313, 115 P.2d 66 (1941); Gray v. City of Santa Fe, 15 F. Supp. 1074 (D.N.M. 1936), modified and aff'd, 89 F.2d 406 (10th Cir. 1937).
Validation of bonds previously issued. — Legislature specifically authorized "paving bonds" to be issued by municipalities, and ratified, approved and confirmed, as valid obligations, any bonds theretofore issued by any municipalities for the purpose of paying the costs of such improvement as though the same were issued under the provisions of this section. Hodges v. City of Roswell, 1926-NMSC-016, 31 N.M. 384, 247 P. 310.
Vote of electors required. — Obligation prescribed by applicable statute and certificates that city guarantee payment of deficiency in special assessment fund from the general revenues of the city was not within the constitutional power of the city without a vote of the qualified electors as required by N.M. Const., art. IX, § 12. Purcell v. City of Carlsbad, 126 F.2d 748 (10th Cir. 1942).
Notice of statutory provisions. — All parties, including holders of municipal bonds, are chargeable with notice of the statutes and ordinances governing the issue. The recitals in the bonds are insufficient to give such notice. State ex rel. Ackerman v. City of Carlsbad, 1935-NMSC-053, 39 N.M. 352, 47 P.2d 865.
Certificates were debts. — Town sewer certificates, were debts within provision of constitution. Henning v. Town of Hot Springs, 1939-NMSC-029, 44 N.M. 321, 102 P.2d 25.
Debt must be fixed and certain. — Sewer construction debt must be fixed, definite and certain in amount at time it was incurred. Henning v. Town of Hot Springs, 1939-NMSC-029, 44 N.M. 321, 102 P.2d 25.
Payment of deficiency held void. — The guaranty of a city to pay to the holders of sewer certificates payable out of assessments any deficiency not met by the assessments was void, in view of N.M. Const., art. IX, § 12. City of Santa Fe v. First Nat'l Bank, 1937-NMSC-009, 41 N.M. 130, 65 P.2d 857.
Negotiable coupon bond which provided for interest "from date until payment" authorized payment of interest after maturity. Munro v. City of Albuquerque, 1939-NMSC-043, 43 N.M. 334, 93 P.2d 993.
Limitations on interest. — Where a city issued special paving assessment bonds with coupons calling for 6% interest until maturity, and providing that upon default all should at once become due and should draw 1% per month, the provisions could not be enforced, since interest was limited by law to 8%, and the city could not be compelled to pay more than 8%. Munro v. City of Albuquerque, 1939-NMSC-043, 43 N.M. 334, 93 P.2d 993.
Bonds should not be surrendered and marked "paid and discharged" until all accumulated interest is paid. Munro v. City of Albuquerque, 1939-NMSC-043, 43 N.M. 334, 93 P.2d 993.
Sale of bonds. — Nothing in the provisions of this section would prevent the sale of special improvement bonds below par and interest accrued thereon. Stone v. City of Hobbs, 1950-NMSC-032, 54 N.M. 237, 220 P.2d 704.
Discount on bonds. — Discount on special street improvement bonds must be treated as an incidental expense which may be assessed against the property situated in the improvement district. Stone v. City of Hobbs, 1950-NMSC-032, 54 N.M. 237, 220 P.2d 704.
Am. Jur. 2d, A.L.R. and C.J.S. references. — 64 Am. Jur. 2d Public Securities and Obligations §§ 104, 105; 70A Am. Jur. 2d Special or Local Assessments §§ 223 to 226.
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 §§ 1893, 1907, 1957.