SENATE BILL 998

47th legislature - STATE OF NEW MEXICO - first session, 2005

INTRODUCED BY

Phil A. Griego

AN ACT

RELATING TO INFRASTRUCTURE ASSETS OF THE STATE AND ITS POLITICAL SUBDIVISIONS; ENACTING THE INFRASTRUCTURE RENOVATION AND PERFORMANCE GUARANTEE ACT; AUTHORIZING GOVERNMENTAL ENTITIES TO ENTER INTO AGREEMENTS FOR THE RENOVATION OF CERTAIN INFRASTRUCTURE.

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

     Section 1. SHORT TITLE.--This act may be cited as the "Infrastructure Renovation and Performance Guarantee Act".

     Section 2. FINDINGS AND PURPOSE.--

          A. The legislature finds that:

                (1) adequate infrastructure, including, but not limited to, roads, pipelines, water and wastewater treatment, electrical generation and distribution, and telecommunications, is basic to the health, safety and welfare of all New Mexicans;

                (2) governmental efforts and resources have not been sufficient to create and maintain a consistent and adequate condition level of infrastructure statewide;

                (3) failure to maintain the infrastructure may create a drag on the local economy and can encourage population and corporate flight while discouraging new private investment or reinvestment; and

                (4) compliance with governmental accounting standards board statements numbers 34 and 35 with regard to the net value of infrastructure assets is of financial benefit to state and local governmental entities.

          B. The purpose of the Infrastructure Renovation and Performance Guarantee Act is to authorize governmental entities to enter into agreements:

                (1) for the restoration of depreciated or deteriorated civil infrastructure assets for which the renovation costs are less than the replacement value;

                (2) that provide for the financing of the restoration; and

                (3) that include performance guarantees.

     Section 3. DEFINITIONS.--As used in the Infrastructure Renovation and Performance Guarantee Act:

          A. "civil infrastructure assets" means any infrastructure-fixed assets of governmental entities, including, but not limited to, roads, pipelines, water and wastewater treatment systems, electrical generation and distribution systems, and telecommunications;

          B. "governmental entity" means the state or any of its agencies, political subdivisions, institutions or instrumentalities;

          C. "performance guarantee" means the guaranteed replacement value of the restored asset or guaranteed condition level over a given term that ensures that the renovation costs were effectively spent for extending asset lifecycles or ensures asset condition levels;

          D. "renovation cost" means the cost of civil infrastructure asset restoration, upgrading and repair, including costs of financing and the performance guarantee costs, with the performance guarantee provided by a third party or risk pooling provider; and

          E. "replacement value" means the estimated civil infrastructure asset replacement costs, including engineering and financing costs, for a governmental entity to completely replace depreciated or deteriorated civil infrastructure assets through the governmental entity's procurement process.

     Section 4. AGREEMENTS FOR RENOVATION OF CIVIL INFRASTRUCTURE ASSETS.--One or more governmental entities may enter into joint powers agreements or other appropriate contractual arrangements:

          A. for the purpose of renovating depreciated or deteriorated civil infrastructure assets for which the renovation costs plus other associated costs are less than the replacement value;

          B. that provide for the financing of the restoration; and

          C. that provide for performance guarantees provided by a third party or risk pooling provider.

     Section 5. CUMULATIVE AUTHORITY.--The Infrastructure Renovation and Performance Guarantee Act shall be deemed to provide an additional and alternative method for the renovation of civil infrastructure assets by governmental entities that may also provide governmental entities financial flexibility, deferral of rate increases and compliance with governmental accounting standards relative to asset management and determination of asset values. The Infrastructure Renovation and Performance Guarantee Act shall be interpreted as supplemental and additional to the powers conferred by other laws and shall not be regarded as in derogation of any powers now existing.

     Section 6. LIBERAL INTERPRETATION.--The Infrastructure Renovation and Performance Guarantee Act, being necessary for the welfare of the state and its inhabitants, shall be liberally construed to effect the purposes thereof.

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