HOUSE JUDICIARY COMMITTEE SUBSTITUTE FOR

HOUSE BILL 55

55th legislature - STATE OF NEW MEXICO - second session, 2022

 

 

 

 

 

 

 

AN ACT

RELATING TO PUBLIC PROJECTS; ENACTING THE PUBLIC-PRIVATE PARTNERSHIP ACT; ALLOWING PUBLIC PARTNERS TO ENTER INTO PUBLIC-PRIVATE PARTNERSHIP AGREEMENTS TO FACILITATE PUBLIC PROJECTS; CREATING THE PUBLIC-PRIVATE PARTNERSHIP BOARD; CREATING THE PUBLIC-PRIVATE PARTNERSHIP PROJECT FUND; PROVIDING FOR AN EXEMPTION TO THE PROCUREMENT CODE; AUTHORIZING GRANTS, LOANS AND BONDS; PROVIDING POWERS AND DUTIES; PROVIDING A DELAYED REPEAL; REQUIRING REPORTS.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

         SECTION 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 13 of this act may be cited as the "Public-Private Partnership Act".

         SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Public-Private Partnership Act:

                   A. "authority" means the New Mexico finance

authority;

                   B. "board" means the public-private partnership board;

                   C. "broadband telecommunications network facilities" means the electronics, equipment, transmission facilities, fiber-optic cables and any other item directly related to a system capable of transmission of internet protocol or other formatted data at current federal communications commission minimum speed standard, all of which will be owned and used by a provider of internet access services;

                   D. "private partner" means an individual, a foreign or domestic corporation, a general partnership, a limited liability company, a limited partnership, a joint venture, a business trust, a public benefit corporation, a nonprofit entity or other private business entity or combination thereof;

                   E. "public partner" means the state and its branches, agencies, departments, boards, instrumentalities or institutions and all political subdivisions of the state and their agencies, instrumentalities and institutions, including a department, an agency, an institution of higher education, a board or a commission;

                   F. "public-private partnership" means an arrangement between one or more public partners and one or more private partners for the development of a public project pursuant to the Public-Private Partnership Act;

                   G. "public-private partnership agreement" means a contract between one or more public partners and one or more private partners in connection with the development of a public project;

                   H. "public project" means:

                               (1) the construction or improvement of a public transportation facility or public transportation infrastructure other than a toll road; or

                               (2) public construction or improvement of broadband telecommunications network facilities;

                   I. "revenue" means all revenue, income, earnings, user fees, lease payments or other service payments that support the development of a public project, including money received as a grant or otherwise from the federal government, a public partner or any agency or instrumentality of the federal government; and

                   J. "user fees" means rates, fees or other charges imposed by the public partner or the private partner for use of all or part of a public project.

         SECTION 3. [NEW MATERIAL] PUBLIC-PRIVATE PARTNERSHIP AGREEMENTS--APPROVAL REQUIREMENTS--RESTRICTIONS.--

                   A. In order to provide economic and administrative efficiencies in connection with the development of public projects, a public partner is authorized to enter into public- private partnership agreements.

                   B. Prior to entering into negotiations regarding the use of a public-private partnership agreement as a method of implementing a proposed public project, the public partner

shall publish a notice of its interest in considering such an agreement. The notice shall be published for three successive weeks in a newspaper of general circulation published in the county where the public partner is situated, and in the county where the proposed public project will occur if different, and if the public partner has a website, the notice shall be posted on that website. The notice shall include a description of the scope of the proposed public project.

                   C. Prior to entering into a public-private partnership agreement, a public partner shall:

                               (1) undertake a cost-benefit analysis of a public-private partnership project in comparison with the traditional public partner-managed project;

                               (2) determine whether the application of the Procurement Code or other procurement rules applicable to the public partner would delay or increase the cost of the proposed public project;

                               (3) conduct a public hearing relating to the proposed public-private partnership held in accordance with the Open Meetings Act;

                               (4) demonstrate that the proposed public project serves an important public purpose and fulfills an important public need; and

                               (5) demonstrate that the proposed public project will comply with applicable state and federal law.

                   D. A public-private partnership agreement shall:

                               (1) define the roles and responsibilities of the public partners and the private partners;

                               (2) provide clawback or recapture provisions that protect the public investment in the event of a default on the agreement;

                               (3) provide a finance plan detailing the financial contributions and obligations of the public and private partners;

                               (4) require a private partner to provide, or cause to be provided, performance and payment bonds as required pursuant to Section 13-4-18 NMSA 1978;

                               (5) require a private partner to provide guarantees, letters of credit or other acceptable forms of security, the amount of which may be less than one hundred percent of the value of the contract involved based on the determination of the public partner, or for public-private partnership agreements requiring board approval, based on the determination by the board;

                               (6) specify how revenue will be collected, accounted for and audited;

                               (7) specify how debts incurred on behalf of the public partner or private partner will be repaid;

                               (8) address how the public partners and the private partners will share management and the risks of the public project;

                               (9) provide that, in the event of an uncured default, the public partner may:

                                         (a) elect to take over the public project, including the succession of all right, title and interest in the public project, subject to any liens on revenue previously granted by the private partner; and

                                         (b) terminate the public-private partnership and exercise any other rights and remedies that may be available;

                               (10) specify the term of the public-private partnership agreement, which shall not exceed thirty years;

                               (11) limit a private partner from seeking injunctive or other equitable relief to in any way restrict a public partner from developing, constructing or maintaining a public project, except that the public-private partnership agreement may provide for reasonable compensation to the private partner for the adverse effect resulting from development, construction, operation and maintenance of another public project of the public partner;

                               (12) provide for the protection of proprietary information of the private partner, except as that information is needed for operations and maintenance by a public entity or for public health and safety;

                               (13) provide that operations and maintenance of a public project, except a public project that is broadband infrastructure, to be performed by the public partner;

                               (14) provide provisions for termination of the public-private partnership agreement, including the cessation of the powers and duties of the private partner; and

                               (15) provide that the public project shall revert to the public partner and be dedicated for public use.

                   E. A public-private partnership agreement for a public project for which the cost is in excess of ten million dollars ($10,000,000) shall not become effective until it is approved by the board pursuant to Subsection D of Section 5 of the Public-Private Partnership Act.

                   F. Within thirty days of execution by a public partner and a private partner, a copy of the fully executed public-private partnership agreement for a public project for which the cost is less than or equal to ten million dollars ($10,000,000) shall be delivered to the board for reporting pursuant to Subsection C of Section 5 of the Public-Private Partnership Act.

         SECTION 4. [NEW MATERIAL] PUBLIC-PRIVATE PARTNERSHIP BOARD--CREATED--MEMBERSHIP.--

                   A. The "public-private partnership board" is created. The authority shall provide necessary administrative services to the board.

                   B. The eleven members of the board shall be:

                               (1) the secretary of economic development or the secretary's designee;

                               (2) the secretary of finance and administration or the secretary's designee;

                               (3) the secretary of general services or the secretary's designee;

                               (4) the secretary of transportation or the secretary's designee;

                               (5) the chief executive officer of the authority or the chief executive officer's designee;

                               (6) the director of the office of broadband access and expansion or the director's designee; and

                               (7) five members of the public appointed by the New Mexico legislative council who shall have experience in architecture, broadband development, engineering, public projects, project finance, public finance or bond and finance law.

                   C. The members of the public appointed initially shall draw lots for staggered terms in such a way that two members shall serve for six years, two members shall serve for four years and one member shall serve for two years. Thereafter, the public members shall serve for six-year terms.

                   D. The members shall select a chair who shall be a public member and who shall serve a term of two years.

                   E. Members who are not public employees are entitled to per diem and mileage as provided in the Per Diem and Mileage Act but shall receive no other compensation, perquisite or allowance.

         SECTION 5. [NEW MATERIAL] BOARD--POWERS.--The board shall have the following powers:

                   A. meet quarterly and at such other times as deemed necessary by the chair;

                   B. develop forms of applications for approval of public-private partnerships;

                   C. receive for reporting purposes executed public-private partnership agreements for public projects for which the cost is less than or equal to ten million dollars ($10,000,000);

                   D. review and consider for approval proposed public-private partnership agreements for a public project for which the cost is in excess of ten million dollars ($10,000,000);

                   E. certify the need for the issuance of revenue bonds and refunding bonds by the authority;

                   F. determine the use of a public-private partnership agreement and ensure that the proposed funding mechanism is a prudent expenditure of public funds;

                   G. promulgate rules establ