A. Any bonds issued by any municipality and payable from any revenues of any airport facility may be refunded in the name of the municipality issuing the bonds being refunded, by the issuance of bonds to refund, pay and discharge all or any part of the outstanding bonds, including any interest on the bonds in arrears or about to become due within three years from the date of the refunding bonds and for the purpose of avoiding or terminating any default in the payment of interest on and principal of the bonds, of reducing interest costs or effecting other economies, or of modifying or eliminating restrictive contractual limitations appertaining to the issuance of additional bonds or to any facilities or income appertaining thereto, or for any combination of the foregoing purposes. Refunding bonds shall be authorized by ordinance, shall be payable from a pledge of the net income derived from any or all designated airport facilities, whether or not financed from any bond proceeds, and additionally may be payable from a pledge of any or all of the additional sources permitted by Sections 3-39-6 and 3-39-12 NMSA 1978 and may be issued under the same terms and conditions allowable by the Municipal Airport Law for airport facilities bonds. Any bonds which are refunded under the provisions of this section shall be paid at maturity or on any permitted prior redemption date in the amounts, at the time and places and, if called prior to maturity, in accordance with any applicable notice provisions, all as provided in the proceedings authorizing the issuance of said refunded bonds or otherwise appertaining thereto, except for any such bond which is voluntarily surrendered for exchange or payment by the holder. Refunding bonds may be delivered in exchange for the outstanding bonds refunded or may be sold at either public or private sale.

B. No bonds may be refunded under the Municipal Airport Law unless the bonds either mature or are callable for prior redemption under their terms within fifteen years from the date of issuance of the refunding bonds, or unless the holders thereof voluntarily surrender them for exchange or payment. Provision shall be made for paying the bonds refunded within said period of time. Interest on any bond may be increased. The principal amount of the refunding bonds may exceed the principal amount of the refunded bonds, but only to the extent that any costs incidental to the refunding bonds or any interest on the bonds refunded in arrears or about to become due within three years from the date of the refunding bonds, or both said incidental costs and interest, are capitalized with the proceeds of refunding bonds. The principal amount of the refunding bonds may also exceed the principal amount of the refunded bonds if the aggregate principal and interest costs of the refunding bonds do not exceed such unaccrued costs of the bonds refunded. The principal amount of the refunding bonds may also be less than or the same as the principal amount of the bonds being refunded so long as provision is duly and sufficiently made for the payment of the refunded bonds.

C. The proceeds of refunding bonds shall either be immediately applied to the retirement of the bonds being refunded or be placed in escrow in a commercial bank or trust company, either a state or national banking institution, which possesses and is exercising trust powers, which is located within New Mexico and which is a member of the Federal Deposit Insurance Corporation, to be applied to the payment of the bonds being refunded upon their presentation therefor. To the extent any incidental expenses have been capitalized, such refunding bond proceeds may be used to defray such expenses, and any accrued interest and any premium appertaining to a sale of refunding bonds may be applied to the payment of the interest thereon and the principal thereof, or both interest and principal, or may be deposited in a reserve therefor, as the municipality may determine. Nothing in this section requires the establishment of an escrow if the refunded bonds become due and payable within one year from the date of the refunding bonds and if the amounts necessary to retire the refunded bonds within that time are deposited with the paying agent for said refunded bonds. Any such escrow shall not necessarily be limited to proceeds of refunding bonds but may include other moneys available for its purpose. Any proceeds in escrow, pending such use, may be invested or reinvested in bills, certificates of indebtedness, notes or bonds which are directed obligations of, or the principal and interest of which obligations are unconditionally guaranteed by, the United States of America. Such proceeds and investments in escrow, together with any interest to be derived from any such investment, shall be in an amount at all times sufficient as to principal, interest, any prior redemption premium due and any charges of the escrow agent payable therefrom, to pay the bonds being refunded as they become due at their respective maturities or due at any designated prior redemption date or dates in connection with which the municipality shall exercise a prior redemption option. Any purchaser of any refunding bond issued under the Municipal Airport Law, is in no manner responsible for the application of the proceeds thereof by the municipality or any of its officers, agents or employees.

D. Refunding bonds may bear such additional terms and provisions as may be determined by the municipality subject to the limitations in the Municipal Airport Law for original bond issues and are not subject to the provisions of any other statute except as may be incorporated by reference in the Municipal Airport Law.

E. Municipalities may pledge irrevocably for the payment of interest and principal of refunding bonds, any of such net income of airport facilities, and any such additional special funds and additional security which may be pledged to an original issue of bonds authorized pursuant to the Municipal Airport Law, even if any of such additional special fund and additional security was not pledged to the bonds being refunded.

History: 1953 Comp., § 14-40-6.1, enacted by Laws 1971, ch. 206, § 2; 1973, ch. 196, § 1.