General Obligation Bonds of School Districts

NMSA 1978 ch. 22, art. 18

in effect

NMSA 1978, § 22-18-1 General obligation bonds; authority to issue

22-18-1. General obligation bonds; authority to issue A. After consideration of the priorities for the school district's capital needs as shown by the facility assessment database maintained by the public school facilities authority and subject to the provisions of Article 9, Section 11 of the constitution of New Mexico and Sections 6-15-1 and 6-15-2 NMSA 1978, a school district may issue general obligation bonds for the purpose of: (1) erecting, remodeling, making additions to and furnishing school buildings, including teacher housing; (2) purchasing or improving school grounds; (3) purchasing computer software and hardware for student use in public schools; (4) providing matching funds for capital outlay projects funded pursuant to the Public School Capital Outlay Act [Chapter 22, Article 24 NMSA 1978]; or (5) any combination of these purposes. B. The bonds shall be fully negotiable and constitute negotiable instruments within the meaning and for all purposes of the Uniform Commercial Code [Chapter 55 NMSA 1978]. 1953 Comp., § 77-15-1, enacted by Laws 1967, ch. 16, § 228; 1996, ch. 67, § 1; 2005, ch. 274, § 14; 2007, ch. 173, § 21; 2009, ch. 132, § 1; 2021, ch. 52, § 7.

NMSA 1978, § 22-18-2 Bond elections; qualification of voters; calling for bond elections

22-18-2. Bond elections; qualification of voters; calling for bond elections A. Before any general obligation bonds are issued, a local school board of a school district shall submit to a vote of the qualified electors of the school district the question of creating a debt by issuing the bonds, and a majority of those persons voting on the question shall vote for issuing the general obligation bonds. B. The election on the question of creating a debt by issuing general obligation bonds shall be held pursuant to the provisions of the Local Election Act [Chapter 1, Article 22 NMSA 1978]. The question shall be submitted to a vote at a district election upon the initiative of a local school board or upon a petition being filed with a local school board signed by qualified electors of the school district. The number of signatures required on the petition shall be at least ten percent of the number of votes cast for governor in the school district in the last preceding general election. For the purpose of determining the number of votes cast for governor in the school district at the last preceding general election, any portion of a voting division within the school district shall be construed to be wholly within the school district. A local school board shall call for a bond election at the next regular local or special election within ninety days following the date a properly signed petition is filed with it; provided that the timing of the election does not conflict with the provisions of Section 1-24-1 NMSA 1978. 1953 Comp., § 77-15-2, enacted by Laws 1967, ch. 16, § 229; 2001, ch. 61, § 1; 2018, ch. 79, § 91; 2019, ch. 212, § 220.

NMSA 1978, § 22-18-4 Bond elections; conduct

22-18-4. Bond elections; conduct A. A person is required to be a qualified elector to vote in a bond election in a school district. B. Bond elections in a school district shall be conducted pursuant to the Local Election Act [Chapter 1, Article 22 NMSA 1978]. 1953 Comp., § 77-15-4, enacted by Laws 1967, ch. 16, § 231; 1970, ch. 6, § 7; 2001, ch. 61, § 2; 2018, ch. 79, § 92; 2019, ch. 212, § 221.

NMSA 1978, § 22-18-5 Bond elections; ballots

22-18-5. Bond elections; ballots A. The question on the ballot of creating a debt by issuing general obligation bonds shall state the purpose or purposes for which the bonds are to be issued and the amount of the bond issue. Two or more separate questions may be submitted to the voters at a bond election, in which case, the vote on each question shall be separately counted, canvassed and certified. B. Bond election ballots shall contain a place for a vote "For the school district bonds" and "Against the school district bonds" for each bond issue. C. If paper ballots are used at a bond election, all questions to be voted on at the bond election shall be listed on one ballot. 1953 Comp., § 77-15-5, enacted by Laws 1967, ch. 16, § 232.

NMSA 1978, § 22-18-7 Authority to issue bonds

22-18-7. Authority to issue bonds If a majority of those persons voting on a question submitted to the voters in a bond election vote for creating a debt by issuing general obligation bonds, the local school board may, subject to the approval of the attorney general, proceed to issue the bonds. 1953 Comp., § 77-15-7, enacted by Laws 1967, ch. 16, § 234.

NMSA 1978, § 22-18-8 Restriction on bond elections

22-18-8. Restriction on bond elections In the event a majority of those persons voting on a question submitted to the voters in a bond election votes against creating a debt by issuing general obligation bonds, no bond election shall be held on the same question for a period of two years from the date of the bond election. 1953 Comp., § 77-15-8, enacted by Laws 1967, ch. 16, § 235; 2018, ch. 79, § 93.

NMSA 1978, § 22-18-9 Approval of bond issue by attorney general

22-18-9. Approval of bond issue by attorney general No issue of bonds shall be valid or binding on any school district unless prior to the issuance of the bonds the attorney general approves the bond issue as to form and legality. The written approval of the attorney general shall be made a part of the transcript of the proceedings in connection with each bond issue. The local school board of each school district proposing to issue bonds shall provide the attorney general with all information necessary for this consideration of the form and legality of the bond issue. 1953 Comp., § 77-15-9, enacted by Laws 1967, ch. 16, § 236.

NMSA 1978, § 22-18-10 Bond election contests

22-18-10. Bond election contests No action concerning any question placed on the ballot at a bond election shall be maintained in the district court unless the action is filed within ten days after the publication of the certificate of results of the bond election by the superintendent of schools. 1953 Comp., § 77-15-10, enacted by Laws 1967, ch. 16, § 237.

NMSA 1978, § 22-18-11 General obligation bonds; issuance; sale

22-18-11. General obligation bonds; issuance; sale A. General obligation bonds of a school district shall be issued and sold pursuant to the provisions of Sections 6-15-3 through 6-15-10 NMSA 1978. B. Except as is otherwise provided by law, general obligation bonds issued by a school district shall be of the denomination or denominations, shall be payable at the place or places within or without the state or both, shall be in such form and shall bear such terms and conditions as the local school board of the school district determines. C. General obligation bonds issued by a school district shall be signed by the president and attested by the secretary of the local school board, unless the bonds are issued in book entry or similar form without the delivery of physical securities. Any coupons appertaining to the bonds shall be signed by the president of the local school board either manually or by facsimile signature. D. The general obligation bonds issued by a school district may be executed in the manner provided by the provisions of the Uniform Facsimile Signature of Public Officials Act [6-9-1 to 6-9-6 NMSA 1978]. 1953 Comp., § 77-15-11, enacted by Laws 1967, ch. 16, § 238; 1983, ch. 265, § 47.

NMSA 1978, § 22-18-12 Budgetary provisions; payment of principal and interest

22-18-12. Budgetary provisions; payment of principal and interest A. A local school board shall establish adequate budgetary provisions, approved by the public school finance division [secretary], to promptly pay, as it becomes due, all principal and interest on general obligation bonds issued by the school district. B. The full faith and credit of a school district shall be pledged to the payment of the principal and interest on general obligation bonds issued by the school district. C. The board of county commissioners shall levy and collect upon all taxable property within a school district in the county such tax as is necessary to pay the interest and principal on general obligation bonds issued by the school district as the interest and principal become due, without limitation as to rate or amount. 1953 Comp., § 77-15-12, enacted by Laws 1967, ch. 16, § 239.

NMSA 1978, § 22-18-13 Timely payment of school district obligations

22-18-13. Timely payment of school district obligations A. Whenever a paying agent has not received payment of principal or interest on school district general obligation bonds on the business day immediately prior to the date on which the payment is due, the paying agent shall so notify the department of finance and administration, the department and the school district by telephone, facsimile or other similar communication, followed by written verification, of the payment status. The department of finance and administration shall immediately contact the school district and determine whether the school district will make the payment by the date on which it is due. B. Except as provided in Subsection C of this section, if the school district indicates that it will not make the payment by the date on which it is due, the department of finance and administration shall forward the amount in immediately available funds necessary to make the payment due on the bonds to the paying agent and shall withhold an equal amount from the next succeeding payment of the state equalization guarantee distribution. If the amount of the next succeeding payment is insufficient to pay the amount due, the department of finance and administration shall withhold amounts from each succeeding payment of the state equalization guarantee distribution, including payments to be made in succeeding fiscal years but not more than twelve consecutive months of payments, until the total payment of principal and interest due has been withheld. C. For a payment due on a bond issued on or after the effective date of this 2007 act, if the school district indicates that it will not make the payment by the date on which it is due, the department of finance and administration shall forward the amount in immediately available funds necessary to make the payment due on the bonds to the paying agent from the current fiscal year's undistributed state equalization guarantee distribution to that school district and, if not otherwise repaid by the school district from other legally available funds, withhold the distributions from the school district until the amount has been recouped by the department of finance and administration, provided that, if the amount of the undistributed state equalization guarantee distribution in the current fiscal year is less than the payment due on the bond, the department of finance and administration shall: (1) forward in immediately available funds to the paying agent an amount equal to the total amount of the school district's undistributed state equalization guarantee distribution and, if not otherwise repaid by the school district from other legally available funds, withhold all distributions to the school district for the remainder of the fiscal year; and (2) on July 1 of the following fiscal year, forward in immediately available funds an amount equal to the remaining amount due to the paying agent from that year's state equalization guarantee distribution and, if not otherwise repaid by the school district from other legally available funds, withhold an equal amount from the distribution to the school district until the amount paid has been recouped in full. D. The amounts forwarded to the paying agent by the department of finance and administration shall be applied by the paying agent solely to the payment of the principal or interest due on the general obligation bonds of the school district. The department of finance and administration shall notify the department, the chief financial officer of the school district, the department of finance and administration, the legislative finance committee and the legislative education study committee of amounts withheld and payments made pursuant to this section. E. Upon the issuance of general obligation bonds by a school district, the school district shall file with the department of finance and administration a copy of the resolution that authorizes the issuance of the bonds, a copy of the official statement or other offering document for the bonds, the agreement, if any, with the paying agent for the bonds and the name, address and telephone number of the paying agent; provided, however, that the failure of a school district to file the information shall not affect the obligation of the department of finance and administration to withhold the state equalization guarantee distribution pursuant to this section. F. The state hereby covenants with the purchasers and holders of general obligation bonds issued by school districts that it will not repeal, revoke or rescind the provisions of this section or modify or amend the same so as to limit or impair the rights and remedies granted by this section; provided that nothing in this subsection shall be deemed or construed to require the state to continue the payment of a state equalization guarantee distribution to any school district or to limit or prohibit the state from repealing, amending or modifying any law relating to the amount of state equalization guarantee distributions to school districts or the manner of payment or the timing thereof. Nothing in this section shall be deemed or construed to create a debt of the state with respect to the bonds within the meaning of any state constitutional provision or to create any liability except to the extent provided in this section. G. Whenever the department of finance and administration is required by this section to make a payment of principal or interest on bonds on behalf of a school district, the department shall initiate an audit of the school district to determine the reason for the nonpayment and to assist the school district, if necessary, in developing and implementing measures to ensure that future payments will be made when due. H. Whenever the department of finance and administration makes a payment of principal and interest on bonds or other obligations of a school district and withholds amounts from the state equalization guarantee distribution pursuant to this section because of the failure to collect property taxes, the school district may transfer delinquent property taxes later collected out of the school district's bond redemption fund and into its general fund. I. This section applies to general obligation bonds issued by a school district on or after July 1, 2003. Laws 2003, ch. 46, § 1; 2007, ch. 102, § 1.

Source: New Mexico Compilation Commission (nmonesource.com)URL: https://nmonesource.com/nmos/nmsa-unanno/en/item/18522/index.doFetched: 10/20/2026