SENATE BILL 543
46th legislature - STATE OF NEW MEXICO - second session, 2004
INTRODUCED BY
Manny M. Aragon
AN ACT
RELATING TO POLITICAL SUBDIVISIONS OF THE STATE; ENACTING THE INFRASTRUCTURE RENOVATION AND PERFORMANCE GUARANTEE ACT; AUTHORIZING THE RENOVATION OF CERTAIN INFRASTRUCTURE OF CERTAIN POLITICAL SUBDIVISIONS; AUTHORIZING FINANCING ARRANGEMENTS FOR THE RENOVATIONS; PROVIDING FOR CERTAIN PERFORMANCE GUARANTEES; RECONCILING CONFLICTING AMENDMENTS TO CERTAIN SECTIONS OF THE NMSA 1978.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 6 of this act may be cited as the "Infrastructure Renovation and Performance Guarantee Act".
Section 2. [NEW MATERIAL] FINDINGS AND PURPOSE.--
A. The legislature finds that:
(1) adequate infrastructure, including 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) local authority 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 local authorities to establish nonprofit corporations to purchase deteriorated eligible civil infrastructure assets from a local authority when they can be renovated and leased or sold back to the local authority for the sum of the purchase and renovation costs.
Section 3. [NEW MATERIAL] DEFINITIONS.--As used in the Infrastructure Renovation and Performance Guarantee Act:
A. "asset value" means the guaranteed replacement value of the restored or rehabilitated asset;
B. "civil infrastructure assets" means any infrastructure-fixed assets of local authorities, including roads, pipelines, water and wastewater treatment systems, electrical generation and distribution systems, and telecommunications;
C. "eligible infrastructure" means civil infrastructure assets for which renovation is less costly than the replacement of the assets;
D. "infrastructure development corporation" means a nonprofit corporation created by a local government for the purpose of purchasing civil infrastructure assets, renovating the assets and selling or leasing the assets to a local government;
E. "local authority" means a municipality, county or water and sanitation district;
F. "performance guarantee" means the guaranteed replacement value or guaranteed condition level of a renovated civil infrastructure asset;
G. "private financing" means a private source of financing used for the purchase of civil infrastructure assets by an infrastructure development corporation, with the civil infrastructure assets being security for debt-financed purchase and renovation of civil infrastructure assets;
H. "renovation cost" means the cost of asset restoration, upgrading and repair, including the guarantee costs;
I. "replacement value" means the estimated cost to a local authority, through the normal procurement process on the open market, to completely replace civil infrastructure assets rather than renovate the assets pursuant to the Infrastructure Renovation and Performance Guarantee Act;
J. "sales price" means the replacement value or lease payments sufficient to service the debt of the infrastructure development corporation and associated expenses; and
K. "salvage value" means the replacement value less the renovation cost.
Section 4. [NEW MATERIAL] LOCAL AUTHORITIES--ADDITIONAL POWERS--CREATION OF INFRASTRUCTURE DEVELOPMENT CORPORATION--POWERS OF CORPORATION.--
A. A local authority may create an "infrastructure development corporation" for the purposes of purchasing and renovating and selling civil infrastructure assets pursuant to the provisions of the Infrastructure Renovation and Performance Guarantee Act.
B. An infrastructure development corporation shall be governed by a board of directors with the number of members and the method of appointment determined by the local authority.
C. The board of directors shall adopt bylaws, in accordance with the provisions of the Nonprofit Corporation Act, governing the conduct of the corporation in the performance of its duties under the Infrastructure Renovation and Performance Guarantee Act.
D. The board of directors may hire a president who shall be the chief administrative officer of the corporation and who shall be responsible for its operations.
E. An infrastructure development corporation shall have the powers conferred upon domestic nonprofit corporations by the Nonprofit Corporation Act unless otherwise specified in the Infrastructure Renovation and Performance Guarantee Act and may:
(1) sue and be sued in its corporate name;
(2) purchase, take, receive or otherwise acquire, own, hold, renovate, sell, lease or use civil infrastructure assets pursuant to the provisions of the Infrastructure Renovation and Performance Guarantee Act;
(3) make and execute all contracts, agreements or instruments necessary or convenient in the exercise of the powers and functions granted the corporation by the Infrastructure Renovation and Performance Guarantee Act and the local authority;
(4) receive and administer grants, contracts and private gifts;
(5) invest and reinvest its funds;
(6) conduct its activities, carry on its operations, have offices and exercise the powers granted by the Infrastructure Renovation and Performance Guarantee Act and the local authority;
(7) employ officers and employees that it deems necessary, set their compensation and prescribe their duties;
(8) enter into contracts with private businesses or persons for the purpose of financing the purchase of an eligible civil infrastructure asset, evaluating the condition of the infrastructure asset and guaranteeing the performance of the restored asset;
(9) enter into debt agreements required to obtain asset-based private financing for the purchase and costs of renovating infrastructure and fixed assets;
(10) seek to purchase eligible civil infrastructure assets and cause to have civil infrastructure assets restored in such a manner and under such terms as may effectuate private financing at tax-exempt rates;
(11) establish procedures for making progress payments to contractors and vendors that carry out renovations to civil infrastructure assets;
(12) provide a first right of refusal to a local authority for the purchase of renovated assets pursuant to the Infrastructure Renovation and Performance Guarantee Act;
(13) agree to an annually renewable lease of renovated assets to a local authority in the event that the local authority does not exercise its first right of refusal; and
(14) enter into and deliver such other agreements and instruments as are necessary or convenient to the accomplishment of the purposes of the Infrastructure Renovation and Performance Guarantee Act.
Section 5. [NEW MATERIAL] RENOVATION OF CIVIL INFRASTRUCTURE ASSETS.--
A. Without a referendum, a local authority may sell civil infrastructure assets for the purpose of renovation, upgrading or repairing, when the asset renovation and other costs are less than the estimated replacement value and may purchase the civil infrastructure assets after renovation. The Infrastructure Renovation and Performance Guarantee Act constitutes complete authority for local authorities to sell such assets and to purchase such renovated assets, notwithstanding the provisions of any other law otherwise applicable to the sale or purchase of assets of a local authority.
B. A local authority may enter into agreements with an infrastructure development corporation that provide for the sale by a local authority to an infrastructure development corporation, at salvage value, deteriorated eligible civil infrastructure assets for the purpose of the infrastructure development corporation's restoration, upgrading and repair of civil infrastructure assets with asset-backed private financing when:
(1) the infrastructure development corporation has entered into an agreement with the local authority to renovate the assets and has granted a right of first refusal to the local authority to purchase the assets from the corporation at a price not to exceed the sum of the salvage value amount, renovation costs and guarantee and financing costs;
(2) the agreement provides for the assets to continue to be operated by the local authority as a public asset of the local authority during the period in which the assets are being renovated;
(3) the value and performance of the renovated civil infrastructure assets are guaranteed by private persons;
(4) the local authority determines that it is the most cost-effective manner in which to provide adequate local civil infrastructure assets; and
(5) the agreement provides that, if the local authority does not exercise its right of first refusal to purchase the renovated civil infrastructure assets, the local authority may enter into an annually renewable lease of the assets.
Section 6. [NEW MATERIAL] CUMULATIVE AUTHORITY.--The Infrastructure Renovation and Performance Guarantee Act shall be deemed to provide an additional and alternative business method for the financing of civil infrastructure assets renovation by local authorities that may also provide local authorities 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 7. Section 6-21-3 NMSA 1978 (being Laws 1992, Chapter 61, Section 3, as amended) is amended to read:
"6-21-3. DEFINITIONS.--As used in the New Mexico Finance Authority Act:
A. "authority" means the New Mexico finance authority;
B. "bond" means any bonds, notes, certificates of participation or other evidence of indebtedness;
C. "bondholder" or "holder" means a person who is the owner of a bond, whether registered or not;
D. "emergency public project" means a public project:
(1) made necessary by an unforeseen occurrence or circumstance threatening the public health, safety or welfare; and
(2) requiring the immediate expenditure of money that is not within the available financial resources of the qualified entity as determined by the authority;
E. "public project" means the acquisition, construction, improvement, alteration or reconstruction of assets of a long-term capital nature by a qualified entity, including land; buildings; water rights; water, sewerage and waste disposal systems; streets; airports; municipal utilities; parking facilities; and machinery, furniture and equipment. "Public project" includes all proposed expenditures related to the entire undertaking. "Public project" also includes the acquisition, construction or improvement of real property, buildings, facilities and other assets by the authority for the purpose of leasing the property;
F. "qualified entity" means the state or an agency or institution of the state or a county, municipality, school district, two-year public post-secondary educational institution, land grant corporation, acequia association, public improvement district, federally chartered college located in New Mexico, intercommunity water or natural gas supply association or corporation, infrastructure development corporation created pursuant to the Infrastructure Renovation and Performance Guarantee Act, special district or community water association or an Indian nation, tribe or pueblo located wholly or partially in New Mexico, including a political subdivision or a wholly owned enterprise of an Indian nation, tribe or pueblo or a consortium of those Indian entities; and
G. "security" or "securities", unless the context indicates otherwise, means bonds, notes or other evidence of indebtedness issued by a qualified entity or leases or certificates or other evidence of participation in the lessor's interest in and rights under a lease with a qualified entity and that are payable from taxes, revenues, rates, charges, assessments or user fees or from the proceeds of funding or refunding bonds, notes or other evidence of indebtedness of a qualified entity or from certificates or evidence of participation in a lease with a qualified entity."
Section 8. Section 13-1-98 NMSA 1978 (being Laws 1984, Chapter 65, Section 71, as amended by Laws 2001, Chapter 291, Section 8 and by Laws 2001, Chapter 292, Section 3 and by Laws 2001, Chapter 305, Section 28 and also by Laws 2001, Chapter 312, Section 13) is amended to read:
"13-1-98. EXEMPTIONS FROM THE PROCUREMENT CODE.--The provisions of the Procurement Code shall not apply to:
A. procurement of items of tangible personal property or services by a state agency or a local public body from a state agency, a local public body or external procurement unit except as otherwise provided in Sections 13-1-135 through 13-1-137 NMSA 1978;
B. procurement of tangible personal property or services for the governor's mansion and grounds;
C. printing and duplicating contracts involving materials that are required to be filed in connection with proceedings before administrative agencies or state or federal courts;
D. purchases of publicly provided or publicly regulated gas, electricity, water, sewer and refuse collection services;
E. purchases of books and periodicals from the publishers or copyright holders thereof;
F. travel or shipping by common carrier or by private conveyance or to meals and lodging;
G. purchase of livestock at auction rings or to the procurement of animals to be used for research and experimentation or exhibit;
H. contracts with businesses for public school transportation services;
I. procurement of tangible personal property or services, as defined by Sections 13-1-87 and 13-1-93 NMSA 1978, by the corrections industries division of the corrections department pursuant to regulations adopted by the corrections commission, which shall be reviewed by the purchasing division of the general services department prior to adoption;
J. minor purchases not exceeding five thousand dollars ($5,000) consisting of magazine subscriptions, conference registration fees and other similar purchases where prepayments are required;
K. municipalities having adopted home rule charters and having enacted their own purchasing ordinances;
L. the issuance, sale and delivery of public securities pursuant to the applicable authorizing statute, with the exception of bond attorneys and general financial consultants;
M. contracts entered into by a local public body with a private independent contractor for the operation, or provision and operation, of a jail pursuant to Sections 33-3-26 and 33-3-27 NMSA 1978;
N. contracts for maintenance of grounds and facilities at highway rest stops and other employment opportunities, excluding those intended for the direct care and support of persons with handicaps, entered into by state agencies with private, nonprofit, independent contractors who provide services to persons with handicaps;
O. contracts and expenditures for services or items of tangible personal property to be paid or compensated by money or other property transferred to New Mexico law enforcement agencies by the United States department of justice drug enforcement administration;
P. contracts for retirement and other benefits pursuant to Sections 22-11-47 through 22-11-52 NMSA 1978;
Q. contracts with professional entertainers;
R. contracts and expenditures for litigation expenses in connection with proceedings before administrative agencies or state or federal courts, including experts, mediators, court reporters, process servers and witness fees, but not including attorney contracts; [and]
S. contracts for service relating to the design, engineering, financing, construction and acquisition of public improvements undertaken in improvement districts pursuant to Subsection L of Section 3-33-14.1 NMSA 1978 and in county improvement districts pursuant to Subsection L of Section 4-55A-12.1 NMSA 1978;
T. works of art for museums or for display in public buildings or places;
U. contracts entered into by a local public body with a person, firm, organization, corporation, association or a state educational institution named in Article 12, Section 11 of the constitution of New Mexico for the operation and maintenance of a hospital pursuant to Chapter 3, Article 44 NMSA 1978, for the lease or operation of a county hospital pursuant to the Hospital Funding Act or for the operation and maintenance of a hospital pursuant to the Special Hospital District Act; and
V. the purchase of civil infrastructure assets by a local authority pursuant to the Infrastructure Renovation and Performance Guarantee Act."
Section 9. Section 13-6-2 NMSA 1978 (being Laws 1979, Chapter 195, Section 3, as amended by Laws 2003, Chapter 203, Section 1 and by Laws 2003, Chapter 349, Section 21) is amended to read:
"13-6-2. SALE OF PROPERTY BY STATE AGENCIES OR LOCAL PUBLIC BODIES--AUTHORITY TO SELL OR DISPOSE OF PROPERTY--APPROVAL OF APPROPRIATE APPROVAL AUTHORITY.--
A. Providing a written determination has been made, a state agency, local public body, school district or state educational institution may sell or otherwise dispose of real or tangible personal property belonging to the state agency, local public body, school district or state educational institution. Disposal of real or tangible personal property under this section shall be by negotiated sale or donation to an Indian nation, tribe or pueblo in New Mexico or by negotiated sale or donation to other state agencies, local public bodies, school districts or state educational institutions or through the central purchasing office of the governmental entity by means of competitive sealed bids or public auction or, if a state agency, through the federal property assistance bureau of the general services department.
B. A state agency, local public body, school district or state educational institution may sell or otherwise dispose of real property:
(1) by negotiated sale or donation to an Indian nation, tribe or pueblo located wholly or partially in New Mexico, or to a governmental unit of an Indian nation, tribe or pueblo in New Mexico, that is authorized to purchase land and control activities on its land by an act of congress or to purchase land on behalf of the Indian nation, tribe or pueblo;
(2) by negotiated sale or donation to other state agencies, local public bodies, school districts or state educational institutions; or
(3) through the central purchasing office of the state agency, local public body, school district or state educational institution by means of competitive sealed bid, public auction or negotiated sale to a private person.
C. Disposal of tangible personal property under this section shall be:
(1) by negotiated sale or donation to an Indian nation, tribe or pueblo in New Mexico;
(2) by negotiated sale or donation to other state agencies, local public bodies, school districts or state educational institutions;
(3) through the central purchasing office of the governmental entity by means of competitive sealed bids, negotiated sale or public auction; or
(4) if a state agency, through the federal property assistance bureau of the general services department.
[B.] D. A state agency shall give the federal property assistance bureau of the general services department the right of first refusal to dispose of tangible personal property of the state agency. A school district may give the department the right of first refusal to dispose of tangible personal property of the school district.
[C.] E. Except as provided in Section 13-6-2.1 NMSA 1978 requiring state board of finance approval for certain transactions, sale or disposition of real or tangible personal property having a current resale value of more than five thousand dollars ($5,000) may be made by a state agency, local public body, school district or state educational institution if the sale or disposition has been approved by the state budget division of the department of finance and administration for state agencies, the local government division of the department of finance and administration for local public bodies, the [state department of] public education department for school districts and the commission on higher education for state educational institutions.
[D.] F. Prior approval of the appropriate approval authority is not required if the property is to be used as a trade-in or exchange pursuant to the provisions of the Procurement Code.
[E.] G. The appropriate approval authority may condition the approval of the sale or other disposition of real or tangible personal property upon the property being offered for sale or donation to a state agency, local public body, school district or state educational institution.
[F.] H. The appropriate approval authority may credit a payment received from the sale of such real or tangible personal property to the governmental body making the sale. The state agency, local public body, school district or state educational institution may convey all or any interest in the real or tangible personal property without warranty.
[G.] I. This section shall not apply to:
(1) computer software of a state agency;
(2) those institutions specifically enumerated in Article 12, Section 11 of the constitution of New Mexico;
(3) the New Mexico state police division of the department of public safety;
(4) the state land office or the [state highway and] department of transportation [department];
(5) property acquired by a museum through abandonment procedures pursuant to the Abandoned Cultural Properties Act;
(6) leases of county hospitals with any person pursuant to the Hospital Funding Act; [and]
(7) property acquired by the economic development department pursuant to the Statewide Economic Development Finance Act; and
(8) civil infrastructure assets sold by a local authority pursuant to the Infrastructure Renovation and Performance Guarantee Act."
Section 10. Section 13-6-2.1 NMSA 1978 (being Laws 1989, Chapter 380, Section 1, as amended by Laws 2003, Chapter 142, Section 3 and by Laws 2003, Chapter 349, Section 22) is amended to read:
"13-6-2.1. SALES, TRADES OR LEASES--BOARD OF FINANCE APPROVAL.--
A. Except as provided in Section 13-6-3 NMSA 1978, for state agencies, any sale, trade or lease for a period of more than five years of real property belonging to a state agency, local public body or school district or any sale, trade or lease of such real property for a consideration of more than twenty-five thousand dollars ($25,000) shall not be valid unless it is approved prior to its effective date by the state board of finance.
B. The provisions of this section shall not be applicable as to:
(1) those institutions specifically enumerated in Article 12, Section 11 of the constitution of New Mexico;
(2) the state land office;
(3) the state transportation commission; [or] (4) the economic development department when disposing of property acquired pursuant to the Statewide Economic Development Finance Act; or
(5) a local authority selling civil infrastructure assets pursuant to the Infrastructure Renovation and Performance Guarantee Act."
Section 11. 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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