Opinion No. 60-225
December 14, 1960
TO: Mr. Fred W. Phelps Director New Mexico Department of Development State Capitol Santa Fe, New Mexico
QUESTION
QUESTION
Can a municipality issue industrial revenue bonds to finance the construction of a project on municipally-owned land that is already under lease to the company that will eventually be lessee of the project?
CONCLUSION
No.
OPINION
{*649} ANALYSIS
The power to issue industrial revenue bonds for the purpose of constructing a project on land that is already owned by the municipality is expressly denied by § 14-41-39, N.M.S.A., 1953 Compilation, which reads, in part, as follows:
"No municipality shall have the power to pay out of its general funds or otherwise contribute any part of the costs of acquiring a project, and shall not have the power to use land already owned by the municipality, or in which the municipality has an equity, for construction thereon of a project or any part thereof."
In our opinion, the quoted section clearly requires the municipality to purchase new land as a part of any project for which industrial revenue bonds are issued, and municipalities have no power {*650} to construct a project on land already owned by the municipality, or in which the municipality has an equity. This, of course, includes lands owned by the municipality, but already under lease, for the lease does not divest the municipality of ownership.
By: Norman S. Thayer
Assistant Attorney General