New Mexico Administrative Code
Title 6 - PRIMARY AND SECONDARY EDUCATION
Chapter 20 - PUBLIC SCHOOL FINANCE - BUDGETING AND ACCOUNTING
Part 2 - GOVERNING BUDGETING AND ACCOUNTING FOR NEW MEXICO PUBLIC SCHOOLS AND SCHOOL DISTRICTS
Section 6.20.2.21 - DEBT SERVICE AND BONDS
Current through Register Vol. 35, No. 18, September 24, 2024
A. A debt service fund shall be created to account for resources that will be used to service general long-term debt that is recorded in the general long-term debt account group. General long-term debt includes noncurrent bonds, as well as other noncurrent liabilities that might arise from compensated absences.
B. Debt service funds shall be established only if legally required or when resources are being accumulated to meet principal and interest payments that will be made in future periods. A single debt service fund shall be used to account for a restricted portion of a general property tax that is used to finance principal and interest payments on all general obligation bonds. Debt service funds shall be used only for the retirement of general long-term debt and for payment of county collection costs. Any funds remaining after all debts have been paid may be transferred after request for transfer has been approved by the department and DFA pursuant to Section 6-10-43, NMSA 1978.
C. All general obligation bonds, except refunding bonds, issued under lawful authority by any school district shall be issued in accordance with Sections 6-15-3 through 6-15-8, NMSA 1978. Refunding bonds are encompassed in Sections 6-15-11 through 6-15-13, NMSA 1978.
D. In accordance with Section 6-15-9, NMSA, 1978, no bonds shall be issued or sold by any school district after the expiration of three (3) years from the date of initiation of proceedings for the election authorizing the issue, except as provided in Sections 6-15-9 supra, and 6-15-10, NMSA, 1978.
E. Arbitrage: The school district shall not earn any income on invested bond proceeds which is in excess of the amount which would have been earned if the bond proceeds had been invested at a yield equal to the yield on bonds. The school district shall prevent the issuance of tax exempt bonds for the purpose of investing the proceeds to make a profit. A long-term investment can be made only at an interest rate equal to or less than the interest paid on the tax exempt bonds.