SB0273

SENATE BILL 273

51st legislature - STATE OF NEW MEXICO - first session, 2013

INTRODUCED BY

Timothy M. Keller and Zachary J. Cook

AN ACT

RELATING TO TRANSPORTATION; ENACTING THE TRANSPORTATION PUBLIC-PRIVATE PARTNERSHIPS ACT; ALLOWING THE STATE AND CERTAIN LOCAL GOVERNMENTS TO ENTER INTO LONG-TERM PARTNERSHIPS WITH PRIVATE SECTOR PARTNERS TO PROVIDE REVENUE-PRODUCING TRANSPORTATION FACILITIES; PROVIDING POWERS AND DUTIES; ALLOWING FOR THE ISSUANCE OF REVENUE BONDS; EXEMPTING PUBLIC-PRIVATE PARTNERSHIPS FROM THE PROCUREMENT CODE; PRESCRIBING PENALTIES; MAKING APPROPRIATIONS.

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

SECTION 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 26 of this act may be cited as the "Transportation Public-Private Partnerships Act".

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

A. "department" means the department of transportation;

B. "force majeure" means an uncontrollable force or natural disaster not within the power of the operator or the public partner;

C. "local government" means an incorporated city, town or village; a county; or a regional transit authority;

D. "maintenance" means ordinary maintenance, repair, rehabilitation, capital maintenance, replacement and any other categories of maintenance that may be designated by the public partner;

E. "material default" mean a failure of an operator to perform any duties under a public-private partnership, which failure jeopardizes delivery of adequate service to the public and remains unsatisfied after a reasonable time and after the operator has received written notice from the public partner of the failure;

F. "operate" means any action to maintain, rehabilitate, improve, equip or modify a transportation facility;

G. "operator" means a private partner who administers, manages or controls a transportation facility pursuant to a public-private partnership;

H. "private partner" means one or more persons who have entered into a public-private partnership with a public partner and who are not the federal government or any agency or instrumentality of the federal government; another state or territory of the United States; a sovereign or foreign government; or the state or an agency, branch, institution or instrumentality or a political subdivision of the state;

I. "public partner" means the department or a local government;

J. "public-private partnership" means the agreement between one or more public partners and one or more private partners for the development, financing, maintenance or operation of a transportation facility, including a lease, ground lease, franchise, easement, permit or other agreement that transfers rights for the use or control, in whole or in part, of a transportation facility by the public partner to the private partner;

K. "transportation facility" means a facility, whether real or personal property, developed or operated in accordance with the Transportation Public-Private Partnerships Act, including an existing, enhanced, upgraded or new facility that is:

(1) used or useful to transport people or goods via one or more modes of transport, whether involving roads, highways, bridges, tunnels, overpasses, conduits, railways, monorails, transit, bus systems, guided rapid transit, airports, intermodal or multimodal systems or any other mode of transport; or

(2) related, used or useful to provide, operate, maintain or generate revenue for a transportation facility, including administrative buildings and other buildings, structures, parking, rest areas, maintenance yards, rail yards, ports of entry or storage facilities, vehicles, rolling stock, energy systems or other related equipment, items or property;

L. "user fee" means the rate, toll, fee or other charge imposed by an operator for use of all or part of a transportation facility; and

M. "utility" means a privately, publicly or cooperatively owned line, facility or system for producing, transmitting or distributing communications, cable television, power, electricity, light, heat, gas, oil, crude products, water, steam, waste, storm water not connected with highway drainage or any other similar commodity, including a fire or police signal system or street lighting system, which directly or indirectly serves the public.

SECTION 3. [NEW MATERIAL] RULES--APPROVAL OF PUBLIC-PRIVATE PARTNERSHIPS.--

A. The department shall adopt rules to carry out the provisions of the Transportation Public-Private Partnerships Act. Provisions in the department's rules shall serve as a model for any public-private partnerships entered into by a local government.

B. The attorney general and the state board of finance shall review and approve or disapprove a public-private partnership agreement proposed to be entered into by a public partner. A public-private partnership agreement shall not be effective unless approved by the attorney general and the state board of finance.

SECTION 4. [NEW MATERIAL] PROJECT DELIVERY METHODS--PROPOSALS.--A public partner may provide for the development or operation of a transportation facility using a variety of project delivery methods and forms of agreements. The methods may include:

A. predevelopment agreements leading to other implementing agreements;

B. design-build agreements;

C. design-build-maintain agreements;

D. design-build-finance-operate agreements;

E. design-build-operate-maintain agreements;

F. design-build-finance-operate-maintain agreements;

G. concession agreements that provide for the private partner to design, build, operate, maintain, manage or lease a transportation facility; or

H. other project delivery methods or agreements or combination of methods or agreements that the public partner determines will serve the public interest.

SECTION 5. [NEW MATERIAL] PROCUREMENT.--

A. A public partner:

(1) may procure a transportation facility using any of the following:

(a) requests for proposals in which the public partner describes a class of transportation facility or a geographic area in which a person is invited to submit proposals to develop transportation facilities;

(b) solicitations using requests for qualifications, short-listing of qualified proposers, requests for proposals, negotiations, best and final offers or other procurement procedures;

(d) best-value selection procurements based on price or financial proposals, or both, or other factors; and

(e) other procedures that the public partner determines may further the implementation of the Transportation Public-Private Partnerships Act; and

(2) may consider an unsolicited proposal if the public partner determines that there is sufficient merit to pursue the unsolicited proposal and a reasonable opportunity for other persons to submit competing proposals for consideration as appropriate.

B. For a procurement in which the public partner issues a request for qualifications or similar solicitation document, the request shall generally set forth the factors that will be evaluated and the manner in which responses will be evaluated.

C. In evaluating proposals, the public partner may accord relative weight to factors such as cost; financial commitment; innovative financing; technical, scientific, technological or socioeconomic merit; and other factors as the public partner deems appropriate to obtain the best value for the state or local government.

D. The public partner may charge and retain a reasonable administrative fee for the evaluation of an unsolicited project proposal; provided that the administrative fee shall not exceed the reasonable cost of evaluating the proposal.

E. In the procurement of a transportation facility, the public partner shall follow substantially the procedures of the Procurement Code in so far as practicable.

F. The public partner may retain financial, legal and other experts to assist in the evaluation, negotiation and development of public-private partnership agreements for a transportation facility; provided that such experts shall have a minimum of five years' experience in working with public-private partnerships in their field of expertise.

G. If contractor insurance is required for services procured pursuant to this section, the insurance shall be placed with an insurer authorized to transact insurance in New Mexico or a surplus lines insurer approved by the insurance division of the public regulation commission or its successor agency.

H. Before the public partner begins the process for procuring a transportation facility, the public partner shall hold at least one public hearing.

SECTION 6. [NEW MATERIAL] CONFIDENTIALITY AND PUBLIC DISCLOSURE.--

A. A solicited or unsolicited proposer shall identify those portions of a proposal or other submission that the proposer considers to be a trade secret or confidential commercial, financial or proprietary information. For trade secrets and confidential and proprietary information to be exempt from disclosure, the proposer must do all of the following:

(1) invoke exclusion on submission of the information or other materials for which protection is sought;

(2) identify with conspicuous labeling the data or other materials for which protection is sought;

(3) state the reasons why protection is necessary; and

(4) fully comply with any applicable state law with respect to information that the proposer contends should be exempt from disclosure.

B. Each request for proposals issued pursuant to the Transportation Public-Private Partnerships Act shall require the proposer to include with its proposal an executive summary covering the major elements of its proposal that do not address the proposer's price, financing plan or other confidential or proprietary information or trade secrets that the proposer intends to be exempt from disclosure. The executive summary shall be subject to release and disclosure to the public at any time. Notwithstanding other provisions of law, in order to maximize competition pursuant to that act, no part of a proposal other than the executive summary shall be subject to release or disclosure by the public partner before an award of the public-private partnership contract and the conclusion of any protest or other challenge to the award, absent an administrative or judicial order requiring release or disclosure. After the award of the contract and the conclusion of any protest or other challenge to the award, the Inspection of Public Records Act applies to any release of any part of the proposal. An unsolicited proposal shall contain a similar executive summary and be afforded the same protections as a requested proposal.

SECTION 7. [NEW MATERIAL] EVALUATION CRITERIA.--Before entering into a public-private partnership, the public partner shall consider:

A. the ability of the transportation facility to improve transportation safety, reduce highway congestion, increase transportation capacity, promote economic growth or streamline services to the public;

B. the proposed cost and financial plan for the transportation facility;

C. the general reputation, qualifications, industry experience and financial capacity of the proposer;

D. the feasibility and proposed design and operation of the transportation facility;

E. comments from potential users, local citizens, affected jurisdictions and other interested persons;

F. benefits to the public;

G. the safety record of the proposer; and

H. other criteria that the public partner deems appropriate.

SECTION 8. [NEW MATERIAL] PUBLIC-PRIVATE PARTNERSHIP AGREEMENTS--PENALTIES.--

A. In a public-private partnership, the public partner may require the agreement to include provisions that:

(1) authorize the public partner or the private partner to establish and collect user fees, rents, advertising and sponsorship charges, service charges or other charges allowed in the agreement, including provisions that:

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

(b) establish circumstances under which the public partner may receive all or a share of revenue from such charges; and

(c) govern enforcement of user fees, including provisions for the use of cameras or other mechanisms to ensure that users are identified and notified of fees owed and provisions that allow the private partner access to relevant public databases for enforcement purposes. Misuse of the data contained in the databases, including negligence in securing the data properly, shall result in a civil penalty of ten thousand dollars ($10,000) for each violation;

(2) if user fees and other charges are allowed, the agreement shall provide for a reasonable rate of return on the private partner's investment, including provisions such as the following:

(a) the fees and charges may be collected directly by the private partner or a third party engaged by the private partner for that purpose;

(b) a formula for the adjustment of user fees and other charges during the term of the public-private partnership;

(c) for an agreement that does not include a formula described in Subparagraph (b) of this paragraph, provisions regulating the private partner's return on investment;

(d) a maximum multiplier that may be applied to the difference between passenger and commercial vehicle user fees;

(e) a variety of traffic management strategies, including general purpose toll lanes; high-occupancy vehicle lanes where single- or low-occupancy vehicles may use high-occupancy vehicle lanes by paying a toll; or lanes or facilities in which the tolls may vary during the course of the day or week or according to levels of congestion anticipated or experienced; or

(f) other strategies that the public partner determines are appropriate;

(3) allow for payments to be made by the public partner to the private partner, including availability payments or performance-based payments;

(4) allow the public partner to accept payments and share revenue with the private partner;

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

(6) specify how the public and private partners will share the costs of development of the transportation facility project;

(7) allocate financial responsibility for cost overruns;

(8) establish the damages to be assessed for nonperformance;

(9) establish performance criteria or incentives, or both;

(10) address the acquisition of rights of way and other property interests that may be required, including provisions that address the exercise of eminent domain; provided, however, that the state shall not relinquish its power of eminent domain to any private partner;

(11) establish recordkeeping, accounting and auditing standards to be used for the project;

(12) for a transportation facility that reverts to public ownership, address responsibility for reconstruction or renovations that are required so that the transportation facility meets all applicable government standards on reversion of the transportation facility to the state;

(13) provide for responsibilities for patrolling and law enforcement on transportation facilities;

(14) identify public partner specifications that must be satisfied, including provisions allowing the private partner to request and receive authorization to deviate from the specifications on a showing satisfactory to the public partner that the deviation is necessary;

(15) require a private partner to provide performance and payment bonds, parent company guarantees, letters of credit or other acceptable forms of security or a combination of any of these, the penal sum or amount of which may be less than one hundred percent of the value of the contract involved based on the public partner's determination of what is required to adequately protect the public partner, made on a facility-by-facility basis;

(16) specify remedies available to the parties and dispute resolution procedures to be followed; and

(17) allow the public or private partner to acquire real property that is needed for and related to transportation facilities, including acquisition by exchange of other real property that is owned by the state, a local government or the federal government.

B. The public-private partnership agreement shall include a clear statement concerning which partner will own real property pertaining to the transportation facility and if or when ownership will revert to the public partner.

C. The term of agreements entered into pursuant to the Transportation Public-Private Partnerships Act may be for a term not to exceed twenty-five years, and such agreements may be extended for additional terms.

D. The public-private partnership agreement shall contain a provision by which the private partner expressly agrees that it is prohibited from seeking injunctive or other equitable relief to delay, prevent or otherwise hinder the public partner or any jurisdiction from developing, constructing or maintaining a facility that was planned and that would or might affect the revenue that the private partner would or might derive from the transportation facility developed under an agreement pursuant to the Transportation Public-Private Partnerships Act, except that the agreement may provide for reasonable compensation to the private partner for the adverse effect on toll revenues or other user fee revenues resulting from development, construction and maintenance of an unplanned facility that affects the transportation facility's revenue.

E. The public-private partnership agreement shall provide that the state board of finance must approve the assignment, transfer or sale of assets or other investment in a transportation facility.

SECTION 9. [NEW MATERIAL] USER FEES AT END OF AGREEMENT PERIOD.--The public partner may continue or cease collection of user fees after the end of the term of the agreement.

SECTION 10. [NEW MATERIAL] FUNDING AND FINANCING.--

A. Any lawful source of funding may be used for the development or operation of a transportation facility pursuant to the Transportation Public-Private Partnerships Act, including:

(1) proceeds of grant anticipation revenue bonds, private activity bonds, revenue bonds or other bonds allowed by federal or state law;

(2) grants, loans, loan guarantees, lines of credit, revolving lines of credit or other arrangements as allowed by federal or state law;

(3) other federal, state or local revenues;

(4) user fees, lease payments, availability payments, gross or net receipts from sales, proceeds from the sale of development rights, franchise charges, permit charges, advertising and sponsorship charges, service charges or any other lawful form of consideration; and

(5) other forms of public and private capital that are available.

B. As security for the payment of financing described in this section, the revenues from the transportation facility may be pledged, but no pledge of revenues constitutes in any manner or to any extent a general obligation of the state or local government. Financing may be structured on a senior, parity or subordinate basis to any other financing.

C. The public partner may issue toll revenue bonds or other revenue bonds or notes to provide money for a transportation facility pursuant to the Transportation Public-Private Partnerships Act.

D. The public partner may accept money from the United States or any of its agencies to carry out the provisions of the Transportation Public-Private Partnerships Act, whether the money is made available by grant, loan or other financing arrangement. The public partner assents to any federal requirements, conditions or terms of any federal funding accepted by the public partner pursuant to this subsection. The public partner may enter into agreements or other arrangements with the United States or any of its agencies as may be necessary to carry out the provisions of that act.

E. The public partner may accept from any source any grant, donation, gift, conveyance of land, other real or personal property or other thing of value made to the public partner.

F. A transportation facility may be funded in whole or in part by contributions of money or property made by a private person or the state or any agency, institution, instrumentality or political subdivision of the state.

G. Federal, state and local money may be combined with private sector money for transportation facility purposes as allowed by law or by grant, gift or donation provisions.

H. Revenue bonds issued pursuant to Section 12 of the Transportation Public-Private Partnerships Act are not general obligations of this state and are not secured by or payable from any money or assets of the state other than the money and revenues specifically pledged to the repayment of the revenue bonds.

SECTION 11. [NEW MATERIAL] EMINENT DOMAIN.--The state may exercise the power of eminent domain to acquire property, rights of way or other rights in property that are necessary to develop, operate or hold a transportation facility pursuant to the Transportation Public-Private Partnerships Act, even if the property will be leased to the private partner to use, lease or operate for its business purposes in connection with the public-private partnership.

SECTION 12. [NEW MATERIAL] REVENUE BONDS--AUTHORITY TO ISSUE.--

A. A public partner may issue revenue bonds on its own behalf or on behalf of a private partner for transportation facilities. Revenue bonds so issued by the department may be considered appropriate investments for the severance tax permanent fund or collateral for the deposit of public funds if the bonds are rated not less than "A" by a national rating service and both the principal and interest of the bonds are fully and unconditionally guaranteed by a lease agreement executed by an agency of the United States government or by a corporation organized and operating within the United States, that corporation or the long-term debt of that corporation being rated not less than "A" by a national rating service. All bonds issued by a public partner are legal and authorized investments for banks, trust companies, savings and loan associations and insurance companies.

B. The public partner may pay from the bond proceeds all expenses, premiums and commissions that the public partner deems necessary or advantageous in connection with the authorization, sale and issuance of the bonds.

C. Revenue bonds:

(1) may have interest or appreciated principal value or any part of interest or appreciated principal value payable at intervals determined by the public partner;

(2) may be subject to prior redemption or mandatory redemption at the public partner's option at the time and upon such terms and conditions with or without the payment of a premium as may be provided by resolution of the public partner;

(3) may mature at any time not exceeding twenty-five years after the date of issuance;

(4) may be serial in form and maturity; may consist of one or more bonds payable at one time or in installments; or may be in such other form as determined by the public partner;

(5) may be in registered or bearer form or in book-entry form through facilities of a securities depository either as to principal or interest or both;

(6) shall be sold for cash at, above or below par and at a price that results in a net effective interest rate that conforms to the Public Securities Act; and

(7) may be sold at a public or negotiated sale.

D. Subject to the approval of the state board of finance, the public partner may enter into other financial arrangements if it determines that the arrangements will assist the public partner to carry out its duties pursuant to the Transportation Public-Private Partnerships Act.

SECTION 13. [NEW MATERIAL] BONDS SECURED BY TRUST INDENTURE.--The bonds issued by the public partner may be secured by a trust indenture between the public partner and a corporate trustee that may be either a bank having trust powers or a trust company. The trust indenture may contain reasonable provisions for protecting and enforcing the rights and remedies of bondholders, including covenants setting forth the duties of the public partner in relation to the exercise of its powers and the custody, use and investment of the project revenues or other funds. The public partner may provide in a trust indenture for the payment of the proceeds of the bonds and the project revenue to the trustee under the trust indenture or other depository for disbursement with any safeguards the public partner determines are necessary.

SECTION 14. [NEW MATERIAL] REVENUE BONDS--LIMITATIONS--AUTHORIZATION--AUTHENTICATION.--

A. Revenue bonds or refunding bonds issued pursuant to the Transportation Public-Private Partnerships Act are:

(1) not general obligations of the state or any local government; and

(2) payable only from properly pledged revenues, and each bond shall state that it is payable solely from the properly pledged revenues and that the bondholders may not look to any other fund for the payment of the interest and principal of the bond.

B. Revenue or refunding bonds may be authorized by resolution of the public partner, which resolution shall be approved by the state board of finance.

C. The bonds shall be executed by the public partner and may be authenticated by any public or private transfer agent or registrar, or its successor, named or otherwise designated by the public partner. Bonds may be executed as provided under the Uniform Facsimile Signature of Public Officials Act, and the coupons, if any, shall bear the facsimile signature of the appropriate official of the public partner.

SECTION 15. [NEW MATERIAL] SECURITY FOR BONDS.--The principal of and interest on any bonds issued pursuant to the provisions of the Transportation Public-Private Partnerships Act shall be secured by a pledge of the revenues out of which the bonds shall be made payable; may be secured by a mortgage, deed of trust note or other certificate of indebtedness covering all or part of the transportation facility from which the revenues so pledged may be derived; and may be secured by a pledge of any lease or installment sale agreement or other fees or revenues with respect to the transportation facility. The resolution of the public partner under which bonds are authorized to be issued may contain any agreement and provisions customarily contained in instruments securing bonds, notes or certificates of indebtedness, including:

A. provisions respecting the fixing and collection of all revenues from any transportation facility covered by the proceedings or mortgage;

B. the terms to be incorporated in any lease or installment sale agreement with respect to the transportation facility;

C. the maintenance and insurance of the transportation facility; and

D. the creation and maintenance of special funds from the revenues with respect to the transportation facility and the rights and remedies available in the event of default to the bondholders, all as the public partner deems advisable and not in conflict with the provisions of the Transportation Public-Private Partnerships Act. In making the agreements or provisions, the public partner shall not have the power to obligate itself, except with respect to the transportation facility and the application of the revenues from the transportation facility, and shall not have the power to incur a pecuniary liability or charge upon the state, municipal, county or regional transit authority's general credit or against its taxing powers. The resolution authorizing any bonds and any mortgage securing such bonds shall set forth the procedure and remedies in the event of default in payment of the principal of or the interest on the bond, note or certificate of indebtedness or in the performance of any agreement. A breach of any agreement shall not impose any pecuniary liability upon the state, municipality, county or regional transit authority or any charge upon its general credit or against its taxing powers.

SECTION 16. [NEW MATERIAL] RESOLUTION FOR ISSUANCE-- REQUIREMENTS--REVENUE--SALE OR LEASE OF PROPERTY.--

A. A resolution for the issuance of bonds shall set forth the determinations and findings of the public partner required by this section.

B. Prior to approving a resolution for the issuance of bonds for a transportation facility, the state board of finance shall determine and find that:

(1) the resolution is for the issuance of bonds and the principal and interest of the bonds to be issued shall be fully secured by:

(a) revenue received from the transportation facility pursuant to a contract entered into by and between the public and private partners;

(b) a lease agreement or installment sale agreement;

(d) an irrevocable letter of credit issued by a chartered financial institution approved for this purpose by the state board of finance; or

(e) a bond insurance policy issued by an insurance company rated not less than "AA" by a national rating service;

(2) revenues are available in an amount necessary in each year to pay the principal of and interest on the bonds proposed to be issued to finance the project; and

(3) revenues are available in an amount necessary to be paid each year into any reserve funds that the public partner may deem advisable to establish in connection with the retirement of the proposed bonds or the maintenance of the transportation facility.

C. Unless the terms under which the transportation facility is to be leased or sold provide that the lessee or purchaser shall maintain the transportation facility and carry all proper insurance with respect to the transportation facility, the resolution shall set forth the estimated cost of maintaining the transportation facility in good repair and keeping it properly insured.

D. Prior to the issuance of the bonds, the public partner may lease or sell the transportation facility to a lessee or purchaser under an agreement conditioned upon completion of the transportation facility and providing for payment to the public partner of such rentals or payments as, upon the basis of such determinations and findings pursuant to provisions of this section, will be sufficient to:

(1) pay the principal of and interest on the bonds issued to finance the transportation facility;

(2) build up and maintain any reserve deemed by the public partner to be advisable in connection with the financing of the project; and

(3) pay the costs of maintaining the transportation facility in good repair and keep it properly insured, unless the agreement of lease obligates the lessee to pay for the maintenance and insurance of the transportation facility.

E. With prior approval of the state board of finance, and subject to constitutional limitations on public debt, the public partner may borrow money to purchase, lease, acquire or develop water rights, a water system, a wastewater collection and treatment system, a natural gas distribution system, an electrical distribution system or other infrastructure needed to support the transportation facility; provided that the public partner shall not obligate itself or the state, municipality or county to any debt or obligation that cannot be paid from funds derived from the transportation facility.

F. Upon prior approval of the state board of finance, and subject to constitutional limitations on public debt, the public partner may obtain commitment from a financial institution to borrow money; provided that closing of the loan and disbursement of the proceeds is conditioned upon compliance with the requirements of the Transportation Public-Private Partnerships Act. Nothing in this section shall be deemed to authorize the public partner to incur any debt obligation in connection with a loan commitment prior to the closing of the loan.

SECTION 17. [NEW MATERIAL] USE OF PROCEEDS FROM SALE OF BONDS.--

A. The proceeds from the sale of any bonds issued pursuant to the Transportation Public-Private Partnerships Act shall be applied only for the purpose for which the bonds were issued; provided that:

(1) any accrued interest and premiums received in any sale shall be applied to the payment of the principal of or the interest on the bonds sold;

(2) if for any reason any portion of such proceeds are not needed for the purpose for which the bonds were issued, the balance of the proceeds shall be applied to the payment of the principal of or the interest on the bonds; and

(3) any portion of the proceeds from the sale of the bonds or any accrued interest and premium received in any such sale may, in the event that the money will not be needed or cannot be used effectively to the advantage of the public partner for the purposes provided pursuant to the Transportation Public-Private Partnerships Act, be invested in short-term interest-bearing securities if such investment will not interfere with the use of the funds for the primary purpose of the project.

B. The cost of acquiring a transportation facility shall be deemed to include the following:

(1) the actual cost of planning, design and construction of any part of a project, including architect, attorney and engineer fees;

(2) the purchase price of any part of a transportation facility that may be acquired by purchase;

(3) the actual cost of the extension of any utility to the transportation facility site and all expenses in connection with the authorization, sale and issuance of the bonds to finance such acquisition; and

(4) the interest on those bonds for a reasonable time prior to construction, during construction and not exceeding six months after completion of construction.

SECTION 18. [NEW MATERIAL] REFUNDING BONDS--AUTHORIZATION.--

A. The public partner may issue refunding revenue bonds for the purpose of refinancing, paying and discharging all or any part of outstanding transportation facility revenue bonds for:

(1) the acceleration, deceleration or other modification of payment of such obligations, including, without limitation, any capitalization of any interest in arrears or about to become due for any period not exceeding one year from the date of the refunding bonds;

(2) reducing interest costs or effecting other economies; or

(3) modifying or eliminating restrictive contractual limitations pertaining to the issuance of additional bonds, otherwise concerning the outstanding bonds or to any transportation facilities relating to the bonds.

B. The public partner may pledge irrevocably for the payment of interest and principal on refunding bonds the appropriate pledged revenues that may be pledged to an original issue of bonds.

C. Bonds for refunding and bonds for any purpose allowed by the Transportation Public-Private Partnerships Act may be issued separately or issued in a combination of one series or more.

SECTION 19. [NEW MATERIAL] REFUNDING BONDS--ESCROW.--

A. Refunding bonds issued pursuant to the Transportation Public-Private Partnerships Act shall be authorized by resolution of the public partner. Any bonds that are refunded under the provisions of this section shall be paid at maturity or on any permitted prior redemption date in the amounts, at the time and places and, if called prior to maturity, in accordance with any applicable notice provisions, all as provided in the proceedings authorizing the issuance of the refunded bonds or otherwise pertaining thereto, except for any such bond that is voluntarily surrendered for exchange or payment by the holder or owner.

B. Provision shall be made for paying the bonds refunded at the time provided in this section. The principal amount of the refunding bonds may exceed the principal amount of the refunded bonds and may also be less than or the same as the principal amount of the bonds being refunded; provided that provision is duly and sufficiently made for payment of the refunded bonds.

C. The proceeds of refunding bonds, including any accrued interest and premium pertaining to the sale of refunding bonds, shall either be immediately applied to the retirement of the bonds being refunded or be placed in escrow in a commercial bank or trust company that possesses and is exercising trust powers and that is a member of the federal deposit insurance corporation, to be applied to the payment of the principal of, interest on and any prior redemption premium due in connection with the bonds being refunded; provided that such refunding bond proceeds, including any accrued interest and any premium pertaining to a sale of refunding bonds, may be applied to the establishment and maintenance of a reserve fund and to the payment of expenses incidental to the refunding and the issuance of the refunding bonds, the interest thereon, the principal thereof or both interest and principal as the public partner may determine. Nothing in this section requires the establishment of an escrow if the refunded bonds become due and payable within one year from the date of the refunding bonds and if the amounts necessary to retire the refunded bonds within that time are deposited with the paying agent for the refunded bonds. Any such escrow shall not necessarily be limited to proceeds of refunding bonds but may include other money available for its purpose. Any proceeds in escrow pending such use may be invested or reinvested in bills, certificates of indebtedness, notes or bonds that are direct obligations of or the principal and interest of which obligations are unconditionally guaranteed by the United States or in certificates of deposit of banks that are members of the federal deposit insurance corporation. Such proceeds and investments in escrow, together with any interest or other income to be derived from any such investment, shall be in an amount at all times sufficient as to principal, interest, any prior redemption premium due and any charges of the escrow agent payable to pay the bonds being refunded as they become due at their respective maturities or due at any designated prior redemption date in connection with which the public partner shall exercise a prior redemption option. Any purchaser of any refunding bond issued pursuant to Transportation Public-Private Partnerships Act is in no manner responsible for the application of the proceeds by the public partner or any of its officers, employees or agents.

D. Refunding bonds may bear such additional terms and provisions as may be determined by the public partner subject to the limitations in this section.

SECTION 20. [NEW MATERIAL] REFUNDING REVENUE BONDS--TERMS.--Refunding revenue bonds:

A. may have interest or appreciated principal value payable at intervals or at maturity;

B. may be subject to prior redemption at the public partner's option at such time or times and upon such terms and conditions with or without the payment of premiums;

C. may be serial in form and maturity;

D. may consist of a single bond payable in one or more installments; and

E. shall be exchanged for the bonds and any mature unpaid interest being refunded at not less than par or sold at public or negotiated sale at, above or below par and at a price that results in a net effective interest rate that does not exceed the maximum permitted by the Public Securities Act.

SECTION 21. [NEW MATERIAL] EXEMPTION FROM TAXATION.--Bonds authorized pursuant to the Transportation Public-Private Partnerships Act and the income from those bonds, all mortgages or other security instruments executed as security for those bonds, all lease and installment purchase agreements made pursuant to the provisions of that act and revenue derived from any lease or sale by the public partner shall be exempt from all taxation by the state or any political subdivision of the state.

SECTION 22. [NEW MATERIAL] REVERSION OF TRANSPORTATION FACILITY TO PUBLIC PARTNER.--If the public-private partnership is terminated, the authority and duties of the operator cease, except for any duties and obligations that extend beyond the termination as provided in the public-private agreement, and the transportation facility reverts to the public partner and shall be dedicated for public use.

SECTION 23. [NEW MATERIAL] MATERIAL DEFAULT--REMEDIES.--

A. Upon the occurrence and during the continuation of material default by an operator, not related to an event of force majeure, the public partner may:

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

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

B. If the public partner elects to take over a transportation facility pursuant to Subsection A of this section, the public partner:

(1) shall collect and pay any revenue that is subject to lien to satisfy an obligation;

(2) may develop and operate the transportation facility, impose user fees for the use of the transportation facility and comply with any service contracts; and

(3) may solicit proposals for the maintenance and operation of the transportation facility as provided in the Transportation Public-Private Partnerships Act for original proposals.

SECTION 24. [NEW MATERIAL] POLICE POWERS--VIOLATIONS OF LAW.--

A. All law enforcement officers of the state or local government have the same powers and jurisdiction within the limits of the transportation facility as they have in their respective areas of jurisdiction and access to the transportation facility at any time to exercise such powers and jurisdictions.

B. The traffic and motor vehicle laws and other laws of the state or, if applicable, ordinances of a local government, shall be the same on the transportation facility as those laws applied to conduct on similar transportation facilities in the state or local government.

C. Punishment for violations of traffic and motor vehicle laws or other laws of the state, or, if applicable, ordinances of the local government, on the transportation facility shall be as prescribed by law for conduct occurring on similar transportation facilities in the state or local government.

SECTION 25. [NEW MATERIAL] UTILITY CROSSINGS.--An operator and any utility whose facility is to be crossed or relocated shall cooperate fully in planning and arranging the manner of the crossing or relocation of the utility facility.

SECTION 26. [NEW MATERIAL] PENALTIES.--A person who fails to pay a user fee required for the privilege of traveling on or using property included in a transportation facility is guilty of a petty misdemeanor and shall be sentenced as provided in Section 31-19-1 NMSA 1978.

SECTION 27. Section 13-1-98 NMSA 1978 (being Laws 1984, Chapter 65, Section 71, as amended) 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 rules adopted by the corrections industries 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;

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 or 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, lease or operation of a county hospital pursuant to the Hospital Funding Act or operation and maintenance of a hospital pursuant to the Special Hospital District Act;

V. purchases of advertising in all media, including radio, television, print and electronic;

W. purchases of promotional goods intended for resale by the tourism department;

X. procurement of printing services for materials produced and intended for resale by the cultural affairs department;

Y. procurement by or through the public education department from the federal department of education relating to parent training and information centers designed to increase parent participation, projects and initiatives designed to improve outcomes for students with disabilities and other projects and initiatives relating to the administration of improvement strategy programs pursuant to the federal Individuals with Disabilities Education Act; provided that the exemption applies only to procurement of services not to exceed two hundred thousand dollars ($200,000);

Z. procurement of services from community rehabilitation programs or qualified individuals pursuant to

the State Use Act;

AA. purchases of products or services for eligible persons with disabilities pursuant to the federal Rehabilitation Act of 1973;

BB. procurement, by either the department of health or Grant county or both, of tangible personal property, services or construction that are exempt from the Procurement Code pursuant to Section 9-7-6.5 NMSA 1978;

CC. contracts for investment advisory services, investment management services or other investment-related services entered into by the educational retirement board, the state investment officer or the retirement board created pursuant to the Public Employees Retirement Act;

DD. the purchase for resale by the state fair commission of feed and other items necessary for the upkeep of livestock; [and]

EE. contracts entered into by the crime victims reparation commission to distribute federal grants to assist victims of crime, including grants from the federal Victims of Crime Act of 1984 and the federal Violence Against Women Act; and

FF. procurements pursuant to the Transportation Public-Private Partnerships Act."

SECTION 28. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2013.

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