N.M. Const. art. IX, § 9
Any money borrowed by the state, or any county, district or municipality thereof, shall be applied to the purpose for which it was obtained, or to repay such loan, and to no other purpose whatever.
Comparable provisions. — Montana Const., art. VIII, § 11.
Utah Const., art. XIV, § 5.
Section places limitation on use of funds borrowed by municipality whose utility system, together with the net revenues derived therefrom, is the sole security therefor. Scott v. City of Truth or Consequences, 1953-NMSC-100, 57 N.M. 688, 262 P.2d 780.
Revenues derived from municipally owned and operated revenue producing enterprises, for the purchases or improvement of which the municipality shall have issued its bonds, may not be used for other corporate purposes so long as rights of bondholders are outstanding. Scott v. City of Truth or Consequences, 1953-NMSC-100, 57 N.M. 688, 262 P.2d 780.
Interest from investments deemed part of proceeds. — This section restricts the use of proceeds from general obligation bonds to the purpose for which they were obtained or to repay the loan. Interest obtained from the investment of such proceeds is part of those proceeds. The constitution restricts the use of any accrued interest to the purpose for which the bonds were issued and to pay the principal and interest on the bonds. Any other purpose would be inconsistent with the constitution and contrary to general law and cannot be authorized by the home rule doctrine, N.M. Const., art. X, § 6D. State ex rel. Bd. of Cnty. Comm'rs v. Montoya, 1978-NMSC-013, 91 N.M. 421, 575 P.2d 605.
Interest from temporary investment not to be used for general operating expenses of city. — A city may not use the interest earned from the temporary investment of general obligation bond proceeds for general operating expenses of the city. Where there is no statute to the contrary, the interest earned becomes part of the fund by whose investment it was produced. Thus, the interest must be deposited in either the sinking fund (to repay the loan) or in the capital projects fund (to be used for purposes for which the proceeds were borrowed). 1976 Op. Att'y Gen. No. 76-16.
Limitation on expenditure of obligation bond. — In addition to actual construction-related costs, the proceeds of general obligation bond issues of a county may be expended only for the purchase of the construction site and for equipment which becomes an integral part of the building being constructed (i.e., fixtures) or which is of a permanent or nondepletable nature and reasonably necessary to the use of the building for its intended purpose (e.g., beds, mattresses and other permanent furnishings). 1980 Op. Att'y Gen. No. 80-02.
No authority to purchase building where bonds voted for new erection. — A town does not have authority to purchase, for municipal purposes, a building already erected from the proceeds of a bond issue voted for the purpose of erecting such a building. 1954 Op. Att'y Gen. No. 54-5957.
Building was altered or reconstructed to be new or different. — The power to become indebted to erect a public building does not include the power to become indebted to purchase such a building, unless, in connection with the purchase, the building is so altered or reconstructed as to amount to the erection of a new or different building. 1954 Op. Att'y Gen. No. 54-5957.
Proceeds from utility bond sale not usable for flood control. — Because this constitutional provision prohibits a municipality from applying proceeds from the sale of municipal bonds for any purpose other than that specified in the bond resolution, a municipality may not use moneys obtained from the sale of utility bonds for other purposes, such as flood control projects. 1963 Op. Att'y Gen. No. 63-98.
Bonds issued for airport other than the one specified. — Where the legislature clearly and unambiguously authorized issuance of severance tax bonds to enlarge the facilities of an existing airport in Questa, those bonds could not be used for a new airport at a site different from the existing airport. 1988 Op. Att'y Gen. No. 88-46.
Inapplicability of section to severance tax bonds. — This section does not apply to severance tax bonds. 1991 Op. Att'y Gen. No. 91-01.
Payment of salaries on authorized project not prohibited. — This section does not prohibit using proceeds of a bond issue to pay the salaries of payroll clerks, timekeepers or of all workers upon the proposed construction of a county hospital for the construction of which a bond issue was authorized. 1951 Op. Att'y Gen. No. 51-5426.
Disposition of surplus. — A surplus remaining in a trunk line sewer fund may not be expended for any other purpose, but may constitute a trust fund to repay bonds when due. 1926 Op. Att'y Gen. No. 26-3903.
Care of sick and indigent persons. — It was held not compulsory on the part of a county to pay for the care of sick and indigent persons at St. Mary's hospital which was already the recipient of a state appropriation. 1929 Op. Att'y Gen. No. 29-82.
Am. Jur. 2d, A.L.R. and C.J.S. references. — 63A Am. Jur. 2d Public Funds §§ 5, 36, 37, 39, 47.
81A C.J.S. States §§ 204 to 206.