N.M. Const. art. IX, § 11
D. For the purposes of this section, a financing agreement entered into by a school district or a charter school for the leasing of a building or other real property with an option to purchase for a price that is reduced according to the payments made by the school district or charter school pursuant to the financing agreement is not a debt if:
Cross references. — For qualifications of voters, see N.M. Const., art. VII, § 1.
For propriety of refunding bonds, see N.M. Const., art. IX, § 15.
For provision limiting local government expenditures to income, see 6-6-11 NMSA 1978.
For exemptions from expenditure limitation, see 6-6-12 NMSA 1978.
For the Education Technology Equipment Act, see 6-15A-1 NMSA 1978 et seq.
For voter qualifications and procedures in school bond elections, see 22-18-2 NMSA 1978.
For requirement that voters be registered, see 22-18-4 NMSA 1978.
Comparable provisions. — Idaho Const., art. VIII, § 3.
Utah Const., art. XIV, §§ 3, 4.
The 1933 amendment, which was proposed by S.J.R. No. 7 (Laws 1933) and adopted at a special election held on September 19, 1933, with a vote of 44,862 for and 21,783 against, amended the first sentence of this section which formerly read: "No school district shall borrow money, except for the purpose of erecting and furnishing school buildings or purchasing school grounds, and in such cases only when the proposition to create the debt shall have been submitted to the qualified electors of the district, and approved by a majority of those voting thereon."
The 1965 amendment, which was proposed by S.J.R. No. 3 (Laws 1965) and adopted at a special election held on September 28, 1965, with a vote of 33,768 for and 17,287 against, amended this section which formerly read: "No school district shall borrow money, except for the purpose of erecting and furnishing school buildings or purchasing school grounds, and in such cases only when the proposition to create the debt shall have been submitted to a vote of such qualified electors of the district as are owners of real estate within such school district, and a majority of those voting on the question shall have voted in favor of creating such debt. No school district shall ever become indebted in an amount exceeding six per centum on the assessed valuation of the taxable property within such school district, as shown by the preceding general assessment."
The 1996 amendment, which was proposed by S.J.R. No. 1 (Laws 1996) and adopted at the general election held November 5, 1996, by a vote of 238,126 for and 230,850 against, divided the section into subsections, added "Except as provided in Subsection C of this section" and made a stylistic change in Subsection A, and added Subsection C.
The 2005 amendment, which was proposed by H.J.R. 9 (Laws 2005) was adopted at the general election held November 7, 2006, by a vote of 337,019 for and 142,568 against, added ", after "against" and before the period, and added Subsection B to permit lease purchase agreements.
"Debt" construed. — Framers of constitution considered a "debt," as used in this section and others in this article, as one repayable upon proceeds of property tax levy against general assessment rolls, so that a debt whose creation is thereby prohibited, or whose amount is limited, is one pledging general faith and credit of subdivision, with a consequent right in holders of such indebtedness to look to general taxing power for payment. State ex rel. Capitol Addition Bldg. Comm'n v. Connelly, 1935-NMSC-045, 39 N.M. 312, 46 P.2d 1097, 100 A.L.R. 878.
Debt limitations applicable only to specified governmental subdivisions. — When Sections 10, 11, 12 and 13 of Article IX of the constitution are considered together, it appears that its framers intended to apply debt limitations only to the specified governmental subdivisions and to leave to the sound discretion of the legislature whether to limit other government agencies created by the legislature. Albuquerque Metro. Arroyo Flood Control Auth. v. Swinburne, 1964-NMSC-206, 74 N.M. 487, 394 P.2d 998.
Securities irregularly issued. — Where certificates of indebtedness of a school district had been issued irregularly and not in compliance with this section or statute under which they were issued, and the proceeds had gone into the construction of school buildings, or had been partially unaccounted for and misappropriated, bona fide holders of certificates were entitled to have buildings applied to their benefit, since the issuance was not of itself illegal. Shaw v. Board of Educ., 1934-NMSC-031, 38 N.M. 298, 31 P.2d 993.
School Leasing Law held unconstitutional. — School Leasing Law (77-17-1 to 77-17-14, 1953 Comp., since repealed) was unconstitutional, since it was simply an effort by indirection to avoid the provisions of this section, relating to six percent debt limit placed on school districts. McKinley v. Alamogordo Mun. Sch. Dist. Auth., 1969-NMSC-086, 81 N.M. 196, 465 P.2d 79.
A. IN GENERAL.
"Qualified electors" construed. — When framers of constitution used term "qualified electors of the district" in this section, they referred to the class of persons theretofore made qualified electors of the school district at all school elections, and by N.M. Const., art. VII, § 1, women were so qualified. Klutts v. Jones, 1915-NMSC-035, 20 N.M. 230, 148 P. 494.
B. REAL ESTATE OWNERSHIP REQUIREMENT.
Real estate ownership requirement unconstitutional. — Notwithstanding our emphatic disagreement with the United States supreme court majority, City of Phoenix v. Kolodziejski, 399 U.S. 204, 90 S. Ct. 1990, 26 L. Ed. 2d 523 (1970), renders this section inoperable insofar as it requires that only real property owners be permitted to vote in school bond elections. Board of Educ. v. Maloney, 1970-NMSC-146, 82 N.M. 167, 477 P.2d 605.
Compelling state interest standard. — As long as election in question is not one of special interest, any classification restricting franchise on grounds other than residence, age and citizenship cannot stand unless district or state can demonstrate that the classification serves a compelling state interest. Hill v. Stone, 421 U.S. 289, 95 S. Ct. 1637, 44 L. Ed. 2d 172 (1975).
The state of New Mexico had no compelling interest in the exclusion of Navajo reservation residents from district bond election and properly included them since the parents of the children who live on the reservation have a distinct interest in district affairs. Prince v. Board of Educ., 1975-NMSC-068, 88 N.M. 548, 543 P.2d 1176.
Implementing statute unconstitutional. — Section 22-18-2 NMSA 1978, which implements this section, conflicts with equal protection clause of the United States constitution, insofar as it restricts franchise in school district bond elections to real estate owners or to those who have paid a property tax on property in the school district for the preceding year. Prince v. Board of Educ., 1975-NMSC-068, 88 N.M. 548, 543 P.2d 1176.
Generally. — There are two reasons for the real estate ownership provision: (1) to insure that the persons voting are relatively permanent members of the community whose schools would be affected; and (2) to allow those upon whom the tax burden would fall to make the decision which would raise taxes. Gomez v. Board of Educ., 1966-NMSC-095, 76 N.M. 305, 414 P.2d 522.
Bona fide ownership required. — In order to qualify to vote in a school bond referendum, a person must be a bona fide owner of real estate within such school district. Grantees of small tracts of land conveyed for no consideration four days before the election by means of quitclaim deeds given for the purpose of qualifying grantees to vote in school bond election are not bona fide owners of real estate within the meaning of this constitutional provision. Gomez v. Board of Educ., 1966-NMSC-095, 76 N.M. 305, 414 P.2d 522.
Essential procedures for obtaining bond issue. — In obtaining funds by issuing bonds for erecting public buildings, there must be notice to the interested electorate, of the purpose for which the funds are to be used, which purpose must be authorized by law, and not be within the inhibition of the constitution; and the electorate must be given an opportunity to approve or disapprove the issuance of the bonds, at an election held for that purpose. Board of Educ. v. Robinson, 1953-NMSC-055, 57 N.M. 445, 259 P.2d 1028.
Words to be used. — Under this section, the resolution, notice and ballot need not include the exact words as stated in the constitution, but certainly the words used cannot be so broad that, in effect, the electorate is not advised of the actual purpose of the attempt to secure funds. Board of Educ. v. Hartley, 1964-NMSC-204, 74 N.M. 469, 394 P.2d 985.
Language "for school purposes", with no other qualification, is too broad and therefore violates this section, because such language does not sufficiently apprise the voter of the exact purpose for which the election was held. Board of Educ. v. Hartley, 1964-NMSC-204, 74 N.M. 469, 394 P.2d 985.
Referendum improper where one of proposed uses unconstitutional. — Where electorate was asked to vote upon the question of money for: (1) erecting and furnishing a school building, which was within the constitution, and (2) improvement of school buildings and grounds which were without the constitution, the duality of the questions presented denied the voters the right of free expression in a referendum on the single valid question embraced in the submission. Board of Educ. v. Robinson, 1953-NMSC-055, 57 N.M. 445, 259 P.2d 1028.
Statements of school district officials regarding the use of bond proceeds. — A school district is required to use bond funds for the purposes specified in the resolution passed by the local school board for issuing the bonds, the notice of election on the bond issuance, and in the question posed on the ballot. The district is not bound by the statements and representations of district officials or employees regarding the use of bond proceeds that are not reflected in the resolution, notice and bond question. 2010 Op. Att’y Gen. No. 10-04.
Dormitories not school buildings. — While the balance of a building fund may be used for repairs for school buildings, dormitories for public schools are not school buildings, and such buildings are not authorized. 1919 Op. Att'y Gen. No. 19-2328.
Newly acquired territory should not be taxed for the bonded indebtedness of the original school district. 1922 Op. Att'y Gen. No. 22-3477.
Use of leases. — A school district cannot procure a loan from the federal government to erect school building, community house and gymnasium under Public Works Act by bond issue to be paid out of proceeds of taxation or revenue from such building, nor by a mortgage on it, but may do so by a lease of it to the governmental agency for term of years beyond term of the then members of the school board who must provide annual rentals for payments under the lease. 1933 Op. Att'y Gen. No. 33-685.
Lease-purchase agreements. — Despite the language of 6-6-12 NMSA 1978 certain lease-purchase agreements may constitute the creation of debt within N.M. Const., art. IX, §§ 10, 11 and 12. 1969 Op. Att'y Gen. No. 69-39.
A contract in the nature of a lease-purchase or installment purchase agreement, with a right of termination by the lessee, used as a method of financing the possible purchase of personal property by public entities of the state is constitutional and does not constitute the creation of a debt. 1976 Op. Att'y Gen. No. 76-20.
Refunding bonds in principal amount greater than principal amount of outstanding bonds being refunded. — Subject to the 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, as provided by law, 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.
"Qualified electors" construed. — Any person meeting the requirements of N.M. Const., art. VII, § 1 and this section is entitled to vote in a school bond election. 1964 Op. Att'y Gen. No. 64-27.
Reasonable proof of real property ownership. — Voting officials may demand from persons seeking to vote in school bond elections reasonable proof of their ownership of real property, such as recorded copies of real estate records or certified copies of real estate records, tax receipts, proof of death of former owner, affidavits of heirship, probate proceedings if initiated, and any other appropriate documents evidencing ownership of realty within the school district by such persons. 1964 Op. Att'y Gen. No. 64-34.
Interest may be fractional or undivided. — A person who owns an actual interest in real property within school district even though it be a fractional or an undivided interest, and otherwise is qualified to vote, may vote in a school district general obligation bond issue. 1965 Op. Att'y Gen. No. 65-95 (opinion rendered under prior law).
Community property. — A husband and wife may both vote in a school bond election if they are owners of realty in school district, which realty is held as community property. 1964 Op. Att'y Gen. No. 64-27 (opinion rendered under prior law).
Purchasers. — The term "owners of real estate within such school district" as used in this constitutional provision includes purchasers of real estate under a real estate contract which has created an escrow arrangement whereby a warranty deed to such realty will be delivered to the purchasers of the realty upon payment of the full contract price. 1964 Op. Att'y Gen. No. 64-87 (opinion rendered under prior law).
Heirs. — Upon the death of an owner of real property situate in a local school district, the heirs or persons named in the will to take such real property immediately become vested with title to such land and such persons become owners of realty entitling them to vote in school bond elections. 1964 Op. Att'y Gen. No. 64-34 (opinion rendered under prior law).
Taxpayers on personal property are qualified electors at school bond election. 1931 Op. Att'y Gen. No. 31-30 (opinion rendered prior to amendments).
Voters exempt from taxes because of military service are qualified electors at school bond election. 1931 Op. Att'y Gen. No. 31-30 (opinion rendered prior to amendments).
Resident property owner delinquent in paying his taxes may vote in a school bond election unless he is so delinquent that the county treasurer has conveyed a tax deed to the state for delinquent taxes. In such event, upon the conveyance the former property owner is divested of ownership of such property and is no longer entitled to vote in school bond elections. 1965 Op. Att'y Gen. No. 65-54 (opinion rendered under prior law).
Payment of taxes before voting. — This section does not require that the elector shall have paid his property taxes before he may vote, but 22-18-2 NMSA 1978 requires that the original petition calling for a school bond election must contain the signatures of "qualified electors of the district who shall have paid a property tax therein during the preceding year". 1952 Op. Att'y Gen. No. 52-5513 (opinion rendered under prior law).
District held to terms of notice. — Proceeds from the sale of district school bonds voted for building and equipping a school house may not be devoted to the purchase of land upon which a school house could be erected. 1916 Op. Att'y Gen. No. 16-1807.
Law reviews. — For comment, "The Last Bastion Crumbles: All Property Restrictions on Franchise Are Unconstitutional," see 1 N.M. L. Rev. 403 (1971).
Am. Jur. 2d, A.L.R. and C.J.S. references. — 64 Am. Jur. 2d Public Securities and Obligations §§ 50, 54, 65 to 67; 68 Am. Jur. 2d Schools §§ 92 to 100.
Debts incurred for school purposes as part of municipal indebtedness, for purposes of debt limitation, 111 A.L.R. 544.
Structures: inclusion of several structures or units as affecting validity of submission of proposition to voters at bond election, 4 A.L.R.2d 617.
Presumptions and burden of proof as to violation of or compliance with public debt limitation, 16 A.L.R.2d 515.
Inclusion of tax-exempt property in determining value of taxable property for debt limit purposes, 30 A.L.R.2d 903.
Rescission of vote authorizing school district expenditure, or tax, 68 A.L.R.2d 1041.
79 C.J.S. Schools and School Districts §§ 323 to 328.