A. Issuance.

(1) The board may, if in its judgment it seems best, issue conservancy bonds (Schedule Form IV) in coupon or registered form in an amount not to exceed ninety percent of the total amount of the construction fund assessments, exclusive of interest, levied under the provisions of this act to mature at annual intervals within fifty years, commencing not later than five years after date, as may be determined by the board, both principal and interest payable at a place or places determined by the board and designated in the bonds.

(2) The bonds shall show on their face the purpose for which they are issued and shall be payable out of money of the construction fund. The bonds may be payable to bearer or the registered owner and, except for bonds issued in book entry or similar form without the delivery of physical securities, shall be signed by the president, and the seal of the district shall be thereunto affixed and attested by the signature of the secretary. Installments of interest may be evidenced by coupons bearing a facsimile of the signature of the treasurer. In case any officer whose signature or certificate appears upon bonds or coupons issued pursuant to this act ceases to be an officer before the delivery of the bonds to the purchaser, such signature or certificate shall nevertheless be valid and sufficient for all purposes the same as if he had remained in office until the delivery of the bonds.

B. Disposal. All bonds, when executed, shall be delivered to the treasurer of the district, who shall sell the bonds in such quantities and at such times as the board of directors may order to meet the payments for the works and improvements of the district. The bonds may be sold at, above or below par, but they shall be sold at such a price that the net effective interest rate of the bonds shall not exceed the maximum net effective interest rate permitted by the Public Securities Act [6-14-1 to 6-14-3 NMSA 1978], as hereafter amended and supplemented. No bonds of the district shall be sold until after notice of the sale has been published in a newspaper of general circulation in the district and in recognized financial journals published in the cities of Chicago and New York once a week for four successive weeks preceding the sale, describing the issue and terms and fixing a time and place for receiving and opening sealed bids.

The board may reject all offers or bids received as a result of such notice and then sell the bonds at private sale; but the board shall not sell the bonds at private sale on terms less advantageous to the district than the best bid so received until after the public sale has been again advertised.

C. Payment.

(1) A sufficient amount of the assessments shall be appropriated by the board for the purpose of paying the principal and interest of bonds, and the same shall, when collected, be set apart in a separate fund for that purpose and no other. Any expenses incurred in the issuance and sale of the bonds and in paying bonds and interest thereon may be paid out of any funds in the hands of the treasurer.

(2) The board, in making assessment levies as herein provided, shall take into account maturing bonds and interest on all bonds and shall make ample provision for the payment thereof. In case the proceeds of the original assessments made under the provisions of this act are not sufficient punctually to pay the principal of and the interest upon all bonds issued hereunder, then the board shall make such additional levy as may be necessary for such purposes. Under no circumstances shall any assessment levies be made that will in any manner or to any extent impair the security of any bond issued hereunder or the fund available for the payment of the principal thereof and interest thereon. No bond issued hereunder or the assessment made to pay the same shall have a priority of lien over any other bond issued or assessments made hereunder.

D. District Treasurer.

(1) The treasurer shall, prior to receiving and accepting the bonds as provided aforesaid and in addition to the bond required, at the time of taking office as provided by Section 73-14-35 NMSA 1978, furnish a corporation surety company bond at the expense of the district, executed to the district, conditioned that he shall account for and pay over as required by law and as ordered by the board, any money received by him on the sale of the bonds or from any other source and that he will sell and deliver the bonds to the purchaser thereof, under and according to the terms herein prescribed and not otherwise, and that he will, when ordered by the board, return to the board, duly canceled any and all bonds not sold; which bond shall be filed in the office of the clerk, who shall produce the same for inspection or for use as evidence whenever or wherever legally required.

(2) The treasurer shall promptly report all sales of bonds to the board. The board shall issue warrants upon the treasurer at the proper time for the payment of the maturing bonds so sold and the interest payment coming due on all bonds sold, and the treasurer shall place sufficient funds at the place of payment to pay the same. In case warrants are not issued by the board as herein provided, then the treasurer shall of his own accord place funds at the place of payment, and the canceled bonds and coupons, if any, shall be accepted in lieu of such warrants.

(3) The successor in office of any such treasurer shall not be entitled to the bonds or the proceeds thereof until he has complied with all the foregoing provisions applicable to his predecessor in office; provided, however, that if it should be deemed more expedient to the board, as to money derived from the sale of bonds issued or from any other source, the board may, by resolution, select some suitable bank or banks or other depository, which depository shall give good and sufficient bond, as temporary or assistant treasurer or treasurers, to hold and disburse the money on orders of the board as the work progresses, until such fund is exhausted or transferred to the treasurer by the order of the board. For such deposit, the district shall receive not less than two percent interest a year. The funds derived from the sale of bonds shall be used for the purpose of paying the cost of the works and improvements and such costs, expenses, fees and salaries as may be authorized by law and shall be used for no other purpose.

E. Pledging.

(1) If at the time when the bonds are ready to be issued the board is of the opinion that the bonds cannot advantageously be issued and sold in whole or in part, the board may sell parts only of the entire issue or may pledge not to exceed ten percent of the issue as collateral to a loan, but no partial sale or pledge shall be made without the order of the board made and entered of record, and no pledge shall be made at a greater margin than at the rate of one hundred dollars ($100) of bond principal for ninety dollars ($90.00) of loan.

(2) The district may borrow money from the United States government and provide for the repayment thereof in the manner provided for the payment of bonds, and the board may make any necessary regulations to provide for such payment. The board may also pledge the bonds for the work done by the United States government in cooperation with the district.

F. Validity.

(1) This act shall, without reference to any other act of the legislature be full authority for the issuance and sale of the bonds in this act authorized, including refunding bonds; which bonds when executed and sealed in conformity with the provisions of this act and when sold or pledged in the manner prescribed herein and the consideration therefor received by the district, shall not be invalid for any irregularity or defect in the proceedings for the issue, sale or pledge thereof and shall be incontestable in the hands of the bona fide purchasers or holders thereof for value. No proceedings in respect to the issuance of any such bonds shall be necessary except such as are required by this act.

(2) A party who has not sought a remedy against any proceeding under this act until after bonds have been sold shall not for any cause have an injunction against the collection of taxes or assessment for the payment of the bonds.

G. Registration.

(1) A district may, by recital in its coupon bonds, agree to register its coupon bonds either as to principal only or as to both principal and interest at the option of the bondholder. Whenever the owner of any coupon bond issued pursuant to the provisions of this act presents the bond to the treasurer or to such bank or other depository as the board may, for such purpose, designate as registrar, with a request for the conversion of the coupon bond into a registered bond, the treasurer, bank or other depository shall stamp, print or write upon the coupon bond so presented, either upon the back or the face thereof, as may be convenient, a statement to the effect that the bond is registered in the name of the owner and that thereafter the principal or the interest and principal of the bond are payable to the registered owner. Thereafter and from time to time, the bond may be transferred by the registered owner in person or by attorney duly authorized upon presentation of the bond for registration as before, a similar statement being stamped, printed or written thereon. Such statements stamped, printed or written upon any such bond may be substantially in the following form:

"This bond is registered in the name of (here insert name of owner) pursuant to the provisions of the Conservancy Act of New Mexico, and the interest and principal (or principal only) thereof are hereafter payable to such owner.

........................................Treasurer (or registrar)

...........................................Conservancy District.

Date ........."

(2) When any bond is registered as aforesaid, the principal and interest of the bond shall be payable to the registered owner, except in the case of a coupon bond registered as to principal only, in which case the principal shall be payable to such person, unless the bond is discharged from registering by being registered as payable to bearer. Upon the registration of a coupon bond as to both principal and interest, the treasurer shall also cut off and cancel the coupons. The treasurer of the district shall enter in a register of bonds to be kept by him, or in a separate book, the fact of the registration of the bond and the name of the registered owner of the bond, so that the register or book shall at all times show what bonds are registered and the name of the registered owners.

History: Laws 1927, ch. 45, § 506; C.S. 1929, § 30-506; 1941 Comp., § 77-2906; 1953 Comp., § 75-30-6; Laws 1983, ch. 265, § 59.

Compiler's notes. — For the meaning of "this act", see compiler's notes to 73-16-2 NMSA 1978.

For the meaning of "Conservancy Act", see compiler's notes following 73-14-1 NMSA 1978.

Cross references. — For definitions of "board" and "clerk," see 73-14-3 NMSA 1978.

For issuance of additional bonds, see 73-16-33 NMSA 1978.

For Schedule Form IV, see 73-17-24 NMSA 1978.

The 1983 amendment, effective April 7, 1983, in Subsection A(1), inserted "in coupon or registered form" and deleted "in denominations of not less than one hundred ($100) dollars, bearing interest from date at a rate not to exceed six (6%) percent per annum, payable semiannually" preceding "to mature at annual intervals;" in Subsection A(2), substituted "The bonds may be payable to bearer or the registered owner and, except for bonds issued in book entry or similar form without the delivery of physical securities" for "Said bonds shall be payable to bearer" in the second sentence and substituted "Installments of interest may" for "The semiannual payments of interest shall" in the third sentence; in Subsection B, rewrote completely the second sentence and deleted the beginning of the third sentence; in Subsection C(1), deleted the former second sentence; in Subsection C(2), divided the former second sentence into the present second and third sentences, and deleted "or levies" following "additional levy" in the second sentence; in Subsection D(1), substituted the New Mexico citation for "Section 304" and deleted "or any of them" following "Sale of the bonds;" in Subsection D(2), inserted "if any" in the last sentence; in Subsection D(3), substituted "successor" for "successors" in the first sentence, substituted "a year" for "per annum" in the second sentence and deleted "or any of them" following "sale of bonds" in the last sentence; in Subsection E(2), inserted "money" following "district may borrow;" in Subsection F(1) deleted "of the state of New Mexico" following "legislature;" in Subsection G, inserted "coupon" preceding "bonds" in three places in Paragraph (1), inserted "principal or the" preceding "interest and principal" in the second sentence of Paragraph (1), deleted the designation of Paragraph (2) preceding the sample bond form and substituted the present designation of Paragraph (2) for the former designation of Paragraph (3), inserted "and principal" following "and the interest" in the sample bond form and substituted "When" for "If" at the beginning of Paragraph (2); and made other minor changes.

Where exceeding interest limit immaterial. — In suit to enjoin sale of 51/2% conservancy bonds at 90% of total amount of construction fund assessments, where it appeared that the total payment of principal and interest, including discount, would not exceed what would have been required if the bonds had borne 6% interest and had brought par and accrued interest, the fact that the interest yield would exceed 6% was immaterial. Jacobson v. Middle Rio Grande Conservancy Dist., 1932-NMSC-067, 36 N.M. 357, 15 P.2d 674 (decided prior to 1983 amendment, deleting language as to interest rate).

Where readvertising discretionary. — In suit to enjoin private sale of conservancy bonds, no sealed bids having been received in response to advertisement 18 months previously, and the complaint showing no change in bond market conditions, readvertising was discretionary with district board. Jacobson v. Middle Rio Grande Conservancy Dist., 1932-NMSC-067, 36 N.M. 357, 15 P.2d 674.

Am. Jur. 2d, A.L.R. and C.J.S. references. — 45 Am. Jur. 2d Irrigation §§ 67 to 69.

52A C.J.S. Levees and Flood Control § 40; 94 C.J.S. Waters §§ 322 to 331.