A. The power of a public utility to issue, assume or guarantee securities and to create liens on its property situated within this state is a special privilege subject to the supervision and control of the commission as set forth in the Public Utility Act [Chapter 62, Articles 1 to 6 and 8 to 13 NMSA 1978].

B. Except as provided in Subsection E of this section, a public utility, when authorized by order of the commission and not otherwise, may issue stocks and stock certificates and may issue, assume or guarantee other securities payable at periods of more than eighteen months after the date thereof for the following purposes only:

(1) making loans or grants from the proceeds of federal loans for economic development projects benefiting its service area;

(2) the acquisition of property;

(3) the construction, completion, extension or improvement of its facilities;

(4) the improvement or maintenance of its service;

(5) the discharge or lawful refunding of its obligations; or

(6) the reimbursement of money actually expended for purposes set forth in this subsection from income or from any other money in the treasury not secured by or obtained from the issue, assumption or guarantee of securities, within five years next prior to the filing of an application with the commission for the required authorization.

C. Notwithstanding the provisions of Subsection B of this section, the commission may authorize issuance by a public utility of shares of stock of any class as a dividend on outstanding shares of stock of the public utility of any class and may authorize the issuance of the same or a different number of shares of stock of any class in exchange for outstanding shares of stock of any class of the public utility, and the public utility may issue the stock so authorized.

D. The commission shall not authorize a borrowing under the provisions of Paragraph (1) of Subsection B of this section unless the governing board has approved the borrowing by a two-thirds' majority vote of the members present at a special meeting called for that purpose. The commission shall review the terms of the economic development loan or grant to ascertain the adequacy of any collateral, to have the right to inspect books and review the level of co-participation by the borrower or grantee.

E. Commission approval is not required for the issuance, assumption or guarantee of any security of a public utility whose securities are subject to oversight and approval by the federal government pursuant to the Rural Electrification Act of 1936, as amended, or any successor law to that act.

History: Laws 1941, ch. 84, § 18; 1941 Comp., § 72-506; Laws 1947, ch. 5, § 1; 1953 Comp., § 68-5-6; 1991, ch. 110, § 1; 2003, ch. 416, § 2.

Compiler's notes. — Sections 62-6-4 to 62-6-26.1 of the Public Utility Act are still effective as the repeal of Chapter 62, Article 6 by Laws 1998, Chapter 108, Section 82, effective July 1, 2003 Chapter 108, Section 82 was repealed prior to taking effect by Chapter 23, Section 1, Laws 2003. Although Laws 2003, Chapter 336, Section 8, amended Laws 1998, Chapter 82, as amended, an amendment of a repealed section is ineffective. See Quintana v. N.M. Dep't of Corrs., 100 N.M. 224, 668 P.2d 1101 (1983). Laws 2003, Chapter 416, Section 5 also repealed Laws 1998, Chapter 108, Section 82, as amended, a second time, however, that repeal is of no effect as the section had previously been repealed by Chapter 23, Section 1, Laws 2003.

The 2003 amendment, effective July 1, 2003, added "Except as provided in Subsection E of this section" at the beginning of Subsection B and added Subsection E.

The 1991 amendment, effective June 14, 1991, designated the formerly undesignated provisions as Subsections A to C; substituted "subject to the supervision and control of the commission as set forth in the Public Utility Act" for "hereby subjected to the supervision and control of the commission as hereinafter in this act set forth" at the end of Subsection A; in Subsection B, inserted Paragraph (1), inserted the paragraph designations "(2)" to "(6)," and inserted "set forth in this subsection" near the beginning of Paragraph (6); added "Notwithstanding the provisions of Subsection B of this section" at the beginning of Subsection C; added Subsection D; and made related changes and minor stylistic changes in Subsections B and C.

Unauthorized notes and mortgages are void. — Notes and mortgages issued without authority of the commission are void. Hogue v. Superior Utils., Inc., 1949-NMSC-056, 53 N.M. 452, 210 P.2d 938.

Utility not liable for payment to protect unauthorized mortgage. — Where plaintiff paid $600 to protect a second mortgage on property of utility company which proved void because it was not authorized by the commission, he could not recover the sum from the utility. Hogue v. Superior Utils., Inc., 1949-NMSC-056, 53 N.M. 452, 210 P.2d 938.

Utility may recover meter deposits applied on unauthorized note and mortgage. — Utility company was properly granted judgment for meter deposits where they were applied by sellers of the capital stock on a note and mortgage of the company which were invalid because not authorized by the commission. Hogue v. Superior Utils., Inc., 1949-NMSC-056, 53 N.M. 452, 210 P.2d 938.

Law reviews. — For article, "Cost of Service Indexing: An Analysis of New Mexico's Experiment in Public Utility Regulation," see 9 N.M.L. Rev. 287 (1979).

Am. Jur. 2d, A.L.R. and C.J.S. references. — 64 Am. Jur. 2d Public Utilities §§ 255 to 263.

Regulating issuance of securities by public utilities through public service commissions, 41 A.L.R. 889.

Conclusiveness of commission's decision or order as to issuance of securities, 41 A.L.R. 922.

Control over issue of securities to capitalize or fund bond discount, 72 A.L.R. 1232.