AGO 08-01.

• Case Date: February 15, 2008
• Court: New Mexico

New Mexico Attorney Gen eral Opinions 2008. AGO 08-01. OPINION OF GARY K. KING Attorney General February 15, 2008Opinion No. 08-01BY: Elizabeth A. Glenn Assistant Attorney General TO: William C. Sisneros, Chief Executive Officer New Mexico Finance Authority 207 Shelby Street Santa Fe, NM 87501 QUESTION:

Does the Education Technology Equipment Act, NMSA 1978, §§ 6-15A-1 to -16 (1997, as amended through 2001) ("ETE Act"), properly define a "lease-purchase arrangement" that a school district can enter into without voter approval under Article IX, Section 11(C) of the New Mexico Constitution?

CONCLUSION:

The ETE Act's definition of "lease-purchase arrangement" is invalid to the extent it includes debt incurred for the acquisition of educational technology equipment that is not a lease-purchase arrangement contemplated under Article IX, Section 11(C).

ANALYSIS:

Article IX, Section 11(A) of the state constitution generally restricts the purposes for which a school district may borrow money and requires the prior approval of the district's voters on "the proposition to create the debt." Subsection (C) provides an exception from those restrictions:

A school district may create a debt by entering into a lease-purchase arrangement to acquire education technology equipment without submitting the proposition to a vote of the qualified electors of the district....(fn1)

The ETE Act is intended to implement Article IX, Section 11(C). See NMSA 1978, § 6-15A-2 (1997). As used in the Act, the term "lease-purchase arrangement" means:

a financing arrangement constituting debt of a school district pursuant to which periodic lease payments composed of principal and interest components are to be paid to the holder of the lease-purchase arrangement and pursuant to which the owner of the education technology equipment may retain title to or a security interest in the equipment and may agree to release the security interest or transfer title to the equipment to the school district for nominal consideration after payment of the final periodic lease payment. "Lease-purchase arrangement" also means any debt of the school district incurred for the purpose of acquiring education technology equipment pursuant to the Education Technology [Equipment] Act whether designated as a lease, bond, note, warrant, debenture, obligation or other

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