General. A revenue bond is a bond whose repayment is made from revenue of a County gross receipts tax or from some other specified revenue source. A revenue bond may be used to provide a variety of capital improvements, including the following:
Public buildings;
Public parking lots, structures or facilities;
Firefighting equipment;
Storm sewers and other drainage improvements, sanitary sewers, sewage treatment plants, water utilities or other water, wastewater or related facilities, water rights;
Alleys, roads or bridges;
Airport facilities;
Open space;
Public parks, public recreational buildings or other public recreational facilities;
Solid waste disposal equipment, equipment for operation and maintenance of sanitary landfills, sanitary landfills, solid waste facilities; or
Public transit systems or any regional transit systems or facilities.
Liberal Interpretation.
This Section, being necessary for the health, safety and general welfare of the County and its inhabitants, shall be liberally construed to effect the purposes of NMSA 1978, § 4-62-1, et seq.
Creation of a County Revenue Bond.
Limitation.
A County Revenue Bond may not be used for any item that is not authorized by Law. General obligation bonds are for capital infrastructure specified by Law and shall not be used for maintenance or for private property.
Issuing Authority, Procedure.
Sale of a revenue bond is authorized by Ordinance of the Board of County Commissioners. If four or more members of the Board vote in favor of the ordinance, it becomes effective as provided by Law. If the ordinance is adopted by three or fewer members, it becomes effective only after the question whether to issue revenue bonds is submitted to, and approved by, the voters.
Financial Terms of County Revenue Bonds.
Like general obligation bonds, revenue bonds that are secured and repaid from tax revenue are repaid on favorable terms, though not quite as favorable as general obligation bonds. Revenue bonds that are secured from a specific revenue source (as opposed to the full faith and credit of the County) are repaid on somewhat less desirable terms because of the relatively greater risk. The interest paid to the investors on gross receipts tax revenue bonds is free from federal income tax under the Internal Revenue Code, but the interest on bonds relying on other revenue sources is usually taxable, although exempt from State taxes.
Special Terms Applicable to Revenue Bonds Whose Repayment is Not Pledged Against Income from a Gross Receipts Tax.
A non-utility revenue producing project shall establish rates for services rendered, or create a lease or other agreements that will provide sufficient revenue to pay all the reasonable expenses of operation and principal and interest on revenue bonds as those amounts become due.
Repayment.
A revenue bond is repaid and secured from a specified revenue source: (i) fire protection revenue bonds are secured and repaid from the county fire protection excise tax; (ii) environmental revenue bonds are secured and repaid from the county environmental services gross receipts tax; (iii) gasoline tax revenue bonds are secured and repaid from county gasoline tax; (iv) utility revenue bonds or joint utility revenue bonds [are secured and repaid from] net revenues from the operation of the utility; (v) project revenue bonds are secured and repaid from the net revenues from the operation of the revenue producing project for which the particular project revenue bonds are issued; (vi) fire district revenue bonds are secured and repaid from the Fire Protection Fund as provided in the statutes creating the Fire Protection Fund and any or all of the revenues provided for the operation of the fire district project for which the particular bonds are issued; (vii) law enforcement protection revenue bonds are secured and repaid from the law enforcement protection fund distributions pursuant to the Law Enforcement Protection Fund Act; (viii) economic development gross receipts tax revenue bonds are secured and repaid from the county infrastructure gross receipts tax; and (ix) county education gross receipts tax revenue bonds are secured and repaid from the county education gross receipts tax revenue.
