A. In order to provide funds to finance state transportation projects, the New Mexico finance authority, when directed by the state transportation commission, is authorized, subject to the limitations of this section and Section 26 [Section 67-3-59.4 NMSA 1978] of this 2003 act, to issue bonds from time to time, payable from:

(1) federal funds not otherwise obligated that are paid into the state road fund;

(2) proceeds of the collection of taxes and fees that are required to be paid into the state road fund and not otherwise pledged exclusively to the payment of outstanding bonds and debentures; and

(3) taxes and fees required by law to be paid into the highway infrastructure fund.

B. The New Mexico finance authority, when directed by the state transportation commission, may issue bonds to refund other bonds issued by or at the direction of the state transportation commission pursuant to this section or Section 67-3-59.1 NMSA 1978 by exchange or current or advance refunding.

C. In consultation with the state transportation commission, the New Mexico finance authority shall determine all terms, covenants and conditions of the bonds; provided that the project design life of a project meets or exceeds the life of the bond issued for that project, and each series of bonds shall be sold, executed and delivered in accordance with the provisions of the New Mexico Finance Authority Act [Chapter 6, Article 21 NMSA 1978]. The New Mexico finance authority may enter into interest rate exchange agreements, interest rate swap contracts, insurance agreements, remarketing agreements and any other agreements deemed necessary in connection with the issuance of the bonds.

D. Proceeds of the bonds and amounts on deposit in the state road fund and the highway infrastructure fund may be used to pay expenses incurred in the preparation, administration, issuance and sale of the bonds and, together with the earnings on the proceeds of the bonds, may be used to pay rebate, penalty, interest and other obligations relating to the bonds and the proceeds of the bonds under the Internal Revenue Code of 1986, as amended.

E. This section is full authority for the issuance and sale of the bonds, and the bonds shall not be invalid for any irregularity or defect in the proceedings for their issuance and sale and shall be incontestable in the hands of bona fide purchasers or holders of the bond for value.

F. The bonds shall be legal investments for a person or board charged with the investment of public funds and may be accepted as security for a deposit of public money and, with the interest thereon, are exempt from taxation by the state and a political subdivision or agency of the state.

G. Any law authorizing the imposition or distribution of taxes or fees paid into the state road fund or the highway infrastructure fund or that affects those taxes and fees shall not be amended or repealed or otherwise directly or indirectly modified so as to impair outstanding bonds secured by a pledge of revenues from those taxes and fees paid into the state road fund or the highway infrastructure fund, unless the bonds have been discharged in full or provisions have been made for a full discharge. In addition, while any bonds issued by the New Mexico finance authority pursuant to the provisions of this section remain outstanding, the powers or duties of the state transportation commission or the authority shall not be diminished or impaired in any manner that will affect adversely the interests and rights of the holder of such bonds.

H. In contracting for state transportation projects to be paid in whole or in part with proceeds of bonds authorized by this section, the department shall require that any sand, gravel, caliche or similar material needed for the project shall, if practicable, be mined from state lands. Each contract shall provide that the contractor notify the commissioner of public lands of the need for the material and that, through lease or purchase, the material shall be mined from state lands if:

(1) the material needed is available from state lands in the vicinity of the project;

(2) the commissioner determines that the lease or purchase is in the best interest of the state land trust beneficiaries; and

(3) the cost to the contractor for the material, including the costs of transportation, is competitive with other available material from nonstate lands.

I. Bonds issued pursuant to this section shall be paid solely from federal funds not otherwise obligated and taxes and fees deposited into the state road fund and the highway infrastructure fund and shall not constitute a general obligation of the state.

J. For purposes of this section, "state transportation project bonds" includes only those bonds issued pursuant to this section and excludes transportation bonds as defined in Section 67-3-72 NMSA 1978.

History: Laws 2003 (1st S.S.), ch. 3, § 24.

Effective dates. — Laws 2003 (1st S.S.), ch. 3, § 24 has no effective date provision, but, pursuant to N.M. Const., art. IV, § 23, is effective on February 3, 2004, 90 days after adjournment of the legislature.

Cross references. — For New Mexico Finance Authority Act, see Chapter 6, Article 21 NMSA 1978.

Temporary provisions. — Laws 2003 (1st S.S.), ch. 3, § 29 provides that nothing in the act shall be deemed to impair state highway revenue bonds previously issued by the Transportation Commission, and authorizes the inclusion in subsequently issued bonds of such terms as may be required to avoid impairment of previously issued bonds.

Internal Revenue Code of 1986. — The Internal Revenue Code of 1986, referred to in Subsection D, is codified throughout Title 26 of the United States Code.

Compiler's notes. — Laws 2003 (1st S.S.), ch. 3, § 24, as enacted by the legislature, included the provision "without obtaining the approval of such agreements by any agency or board of the state, notwithstanding the provisions of any other law of the state" at the end of Subsection C; however, such provision was vetoed by the governor.

Laws 2003 (1st S.S.), ch. 3, §§ 27 and 28 list the authorized transportation projects for which the Department of Transportation may use the net proceeds of state transportation project bonds issued by the New Mexico Finance Authority pursuant to this section and 67-3-59.4 NMSA 1978.