N.M. Const. art. IX, § 8
B. For the purposes of this section and Article 4, Section 29 of the constitution of New Mexico, a financing agreement entered into by the state 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 state pursuant to the financing agreement is not a debt if:
The 2006 amendment, which was proposed by H.J.R. 9 (Laws 2005) and adopted at the general election 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.
Cross references. — For state indebtedness, see 6-12-1, 6-12-2 and 6-12-6 to 6-12-14 NMSA 1978.
"Debt" is used in this section in the same sense as in Section 12 of this article, as comprehending a debt pledging for its repayment the general faith and credit of the state or municipality, and contemplating the levy of a general property tax as the source of funds with which to retire the debt. 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.
Bonds for capitol additions not included. — Debentures authorized under Laws 1934 (S.S.), ch. 14 (repealed), to provide funds for the capitol addition building, which funds were to be supplied by a fee of $2.50 upon each civil action filed in the state courts, did not constitute a general obligation on the part of the state and were not within the interdiction of this section. 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.
Single propositions required. — This section requires that the legislature submit single bond propositions to the voters. Ryan v. Gonzales, 1992-NMSC-052, 114 N.M. 346, 838 P.2d 963.
"The betterment of the welfare of the people" is not a specified object that necessarily relates capital outlay projects to each other; and therefore proposition which lumped together objects with no commonality but welfare and which did not interrelate did not satisfy tests for commonality sufficient to satisfy the constitutional purpose of avoiding logrolling. Ryan v. Gonzales, 1992-NMSC-052, 114 N.M. 346, 838 P.2d 963.
Unconstitutional debt created for erection and operation of state office building. — Laws 1941, ch. 62 (repealed), providing for erection and operation of state office building by the state office building commission, which was authorized to issue debentures payable from rentals received from state agencies leasing space, was unconstitutional as creating a debt of the state in the constitutional sense, not specified in N.M. Const., art. IX, § 7, which was not submitted for approval of electorate. Bryant v. State Office Bldg. Comm'n, 1941-NMSC-052, 46 N.M. 58, 120 P.2d 452; State Office Bldg. Comm'n v. Trujillo, 1941-NMSC-051, 46 N.M. 29, 120 P.2d 434.
Bonds of university not deemed obligations of state. — Bonds issued by the university of New Mexico under 21-7-15 to 21-7-25 NMSA 1978 are not obligations of the state; no provision for taxation to provide interest and sinking fund need be made and approval of voters is not necessary. The bonds are obligations of university. State v. Regents of Univ. of N.M., 1927-NMSC-047, 32 N.M. 428, 258 P. 571. For statutory provisions relating to bonds and state educational institutions, see Chapter 6, Article 13 and Chapter 21 NMSA 1978.
Issuance of debentures in anticipation of proceeds of gasoline tax, as authorized by Laws 1927, ch. 20 (repealed), did not constitute state borrowing or debt requiring a popular referendum. State v. Graham, 1927-NMSC-066, 32 N.M. 485, 259 P. 623.
Issuance in anticipation for construction and improvement of public highways. — Laws 1921, ch. 153 (temporary), authorizing levy of taxes and issuance and sale of state debentures in anticipation of taxes, for construction and improvement of public highways, and to meet, dollar for dollar, allotments to the state of federal funds under Federal Aid Road Act (23 U.S.C. §§ 101 to 158) was validated by adoption of amendment to state constitution adding Section 16 to Article IX. Lopez v. State Hwy. Comm'n, 1921-NMSC-074, 27 N.M. 300, 201 P. 1050.
This section was not violated by State Highway Bond Act (Laws 1912, ch. 58, now executed). Catron v. Marron, 1914-NMSC-048, 19 N.M. 200, 142 P. 380.
Laws 1949, ch. 42 (repealed), was excepted from popular referendum, as highway debentures were evidences of public debts in sense words "public debt" are used in N.M. Const., art. IV, § 1, relating to referendum on legislation. State ex rel. Linn v. Romero, 1949-NMSC-049, 53 N.M. 402, 209 P.2d 179.
An indemnification obligation in a state agency contract not funded by legislative appropriation is void. — Article IX, Section 8 of the New Mexico Constitution prohibits the state from agreeing to a contingent liability of unlimited amounts for an indefinite term, and therefore, an indemnification obligation in a state agency contract not funded by legislative appropriation is void. 2025 Op. Att'y Gen. No. 25-05.
Naming the United States as an additional insured on a commercial general liability insurance policy does not violate the New Mexico constitution. — Where the United States department of agriculture and the New Mexico general services department proposed an agreement where the state of New Mexico, in exchange for the state's use of federal land under special use permits issued by the United States forest service, agreed to indemnify the United States for tort liability associated with the state's use of the federal lands up to the liability limits in the Tort Claims Act by acquiring commercial general liability insurance, with the United States named as an additional insured, for communications use leases and provide for self-insurance, with the United States named as an additional insured, for all special use authorizations issued for non-communications uses of federal lands, the naming of the United States as an additional insured on a commercial general liability insurance policy did not implicate the debt restriction in N.M. Const., Art. IX, § 8, because an insurance policy payable by a commercial insurance company is not a debt of the state. 2025 Op. Att'y Gen. No. 25-05.
See also notes to N.M. Const., art. IX, § 7.
Bond issues. — This section does not apply to severance tax bonds. 1991 Op. Att'y Gen. No. 91-01.
When contraction of debt prohibited. — Where the purpose for which an agency proposes to contract a debt is not included in N.M. Const., art. IX, § 7, this section specifically prohibits the contraction of the debt. 1958 Op. Att'y Gen. No. 58-228.
Bonds for capitol additions. — Proposed debentures in Laws 1921, ch. 81 (now obsolete), relating to construction of an addition to the capitol building at Santa Fe, were not an indebtedness of the state under this section. 1921 Op. Att'y Gen. 21-2980.
Lease-purchase contract and installment purchase agreement with right of termination constitutional. — 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.
The mere fact that the state enters into a lease agreement with an option to purchase property in the future is not violative of this section. An option to purchase does not obligate the state to purchase the property; therefore there is no debt. 1975 Op. Att'y Gen. No. 75-15.
Long-term lease of disposal site for radioactive waste no violation. — There would be no violation of this section if the environmental improvement agency entered into a license agreement with a regulated business which would obligate the state for the long-term lease of a disposal site or tailings pile. The fact that the problems inherent in the licensing of radioactive waste disposal sites may necessitate payments to the state to absorb the cost of maintaining the sites and that that cost may someday be borne by the state does not create a contract of debt out of what is essentially an exercise of police power. 1976 Op. Att'y Gen. No. 76-36.
State highway debenture bonds, authorized by Laws 1955, ch. 269 (64-26-59 to 64-26-65 1953 Comp.), are such general obligations of the state as to place them within the constitutional provisions pertaining to restrictions upon state indebtedness. 1960 Op. Att'y Gen. No. 60-56.
Am. Jur. 2d, A.L.R. and C.J.S. references. — 72 Am. Jur. 2d States, Territories and Dependencies §§ 78, 80, 86.
Employees, submission to voters of bond issue for the purpose of paying, as essential to its validity, 96 A.L.R. 1204.
Funding or refunding obligations as subject to conditions respecting approval by voters, 97 A.L.R. 442.
Power of legislature to add to or make more onerous the conditions or limitations prescribed by constitution upon incurring public debts, 106 A.L.R. 231.
Retroactive effect of laws, constitutional or statutory provision limiting state or municipal indebtedness or taxation or regulating issuance of bonds as affecting bonds or other obligations authorized but not delivered prior to adoption or effective date of the provision, 109 A.L.R. 961.
Revenue or other bonds not creating indebtedness as within constitutional or statutory requirement of prior approval by electors of issuance of bonds or incurring indebtedness by municipality, 146 A.L.R. 604.
Bond issue in excess of amount authorized by law, validity of, within authorized debt, tax or voted limit, 175 A.L.R. 823.
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.
81A C.J.S. States §§ 213 to 222.