SB0636PAS

SENATE PUBLIC AFFAIRS COMMITTEE SUBSTITUTE FOR

SENATE BILL 636

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

AN ACT

RELATING TO THE PUBLIC PEACE, HEALTH, SAFETY AND WELFARE; ENACTING THE PUBLIC-PRIVATE PARTNERSHIPS ACT; ALLOWING THE STATE AND CERTAIN LOCAL GOVERNMENTS TO ENTER INTO PARTNERSHIPS WITH PRIVATE SECTOR PARTNERS TO FACILITATE PUBLIC PROJECTS; PROVIDING POWERS AND DUTIES; ALLOWING FOR THE ISSUANCE OF REVENUE BONDS; PRESCRIBING PENALTIES.

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

SECTION 1. SHORT TITLE.--This act may be cited as the "Public-Private Partnerships Act".

SECTION 2. DEFINITIONS.--As used in the Public-Private Partnerships Act:

A. "department" means the general services department;

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

C. "local government" means a municipality; a county; or a regional entity created by a joint powers agreement between one or more public agencies;

D. "material default" means a failure of a private partner 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 private partner has received written notice from the public partner of the failure;

E. "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, instrumentality or political subdivision of the state;

F. "public partner" means the department, a local government or an instrumentality of the state or local government;

G. "public-private partnership" means the agreement between one or more public partners and one or more private partners for the development or financing of a public project;

H. "public project" means:

(1) a building or other facility for a public school or a public post-secondary educational institution, including:

(a) a school building;

(b) a functionally related and subordinate facility;

(d) the acquisition of land for a building or facility; and

(e) any depreciable property provided for use in a school facility that is operated as part of the public school system or a public post-secondary educational institution;

(2) theaters, museums, convention centers, stadiums, athletic facilities or golf courses;

(3) parking lots or garages;

(4) an airport, subway or similar facility;

(5) improvements, together with equipment, necessary to enhance public safety and security of buildings to be principally used by a public entity;

(6) utility and telecommunications and other communications infrastructure;

(7) dams and reservoirs;

(8) a sewerage or water treatment facility, power generating plant, pump station, natural gas compressing station or similar facility;

(9) a sewerage, water, gas or other pipeline;

(10) a transmission line;

(11) a radio, television, cell or other tower;

(12) improvements necessary or desirable to any unimproved state-owned or locally owned real estate; or

(13) recycling facilities or solid waste management facilities that produce electric energy derived from solid waste;

I. "user fee" means a rate, fee or other charge imposed by a public partner for use of all or part of a public project; and

J. "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. RULES--APPROVAL OF PUBLIC-PRIVATE PARTNERSHIPS.--

A. The department shall adopt rules to carry out the provisions of the Public-Private Partnerships Act, which rules shall comply with the Procurement Code.

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

SECTION 4. PROJECT DELIVERY METHODS--PROPOSALS.--A public partner may provide for the development of a public project using a variety of project delivery methods and forms of agreements. A public partner may not develop any project pursuant to the Public-Private Partnerships Act that includes private operation, maintenance or management of a public facility. A public-private partnership shall not be used to create a tax increment development district. The project delivery methods and forms of agreements may include:

A. predevelopment agreements leading to other implementing agreements;

B. design-build agreements;

C. design-build-finance agreements;

D. construction manager at risk;

E. concession agreements that provide for the private partner to design or build a public project; or

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

SECTION 5. PROCUREMENT.--

A. Procurements pursuant to the Public-Private Partnerships Act are subject to the provisions of the Procurement Code. The resident preferences provided in Sections 13-1-21 and 13-1-22 NMSA 1978 apply to procurements pursuant to that act. The construction of a public project is a public works for the purposes of the Public Works Minimum Wage Act, the Subcontractors Fair Practice Act, other provisions of Chapter 13, Article 4 NMSA 1978 and the Public Works Apprentice and Training Act. The Public-Private Partnerships Act does not apply to projects developed pursuant to the Affordable Housing Act.

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

C. 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.

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

E. 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 with a surplus lines insurer approved by the insurance division of the public regulation commission or its successor agency.

F. Before the public partner begins the process for procuring a public project, the public partner shall hold at least three public hearings during which the request for proposal is presented and discussed and shall hold additional public hearings before an agreement is signed at regular intervals during the project and after the project is completed. All public hearings shall be preceded by at least fourteen days notice.

SECTION 6. EVALUATION CRITERIA.--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; full-cost assessment and comparison of development, including conventional bonding, other public financing mechanisms and triple bottom line accounting principles; and other factors as the public partner deems appropriate to obtain the best value for the state or local government. Before entering into a public-private partnership, the public partner shall consider:

A. the ability of the public project to meet the needs of the community in which it is to be located, including improving and streamlining services to the public; providing or enhancing educational, cultural and recreational opportunities; promoting economic growth; or otherwise serving a public purpose;

B. the proposed cost and financial plan for the public project;

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

D. the feasibility and proposed design and construction management of the public project;

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 7. PUBLIC-PRIVATE PARTNERSHIP AGREEMENTS--REQUIREMENTS--PENALTIES.--

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

(1) authorize the public partner to establish and collect user fees and rents and to authorize the public partner or private partner to establish and collect advertising and sponsorship charges or service charges, 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 properly securing the data, 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) limitations on the profits by the private partner of no more than a fifteen percent return on investment; or

(e) 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 public project;

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

(7) allocate financial responsibility for cost overruns to the partner or partners that were responsible for the cost overruns;

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

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

(10) address the acquisition of property interests that may be required, including provisions that allow the public or private partner to acquire real property, including acquisition by exchange of other real property that is owned by the state, a local government or the federal government; provided that the public partner may not exercise its power of eminent domain to benefit the private partner;

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

(12) for a public project, address responsibility for reconstruction or renovations that are required so that the public project meets all applicable government standards before the public project reverts to the public partner;

(13) provide for responsibilities for law enforcement on public projects;

(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 as required by Section 13-4-18 NMSA 1978 for those components of a public project that involve construction. For components that do not involve construction, require 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 project-by- project basis;

(16) provide clawback or recapture provisions that protect the public investment, and

(17) specify remedies available to the parties and dispute resolution procedures to be followed.

B. The public-private partnership agreement shall include a clear statement that the public partner will own any real property pertaining to the public project when the project reverts to the public partner.

C. The term of agreements entered into pursuant to the Public-Private Partnerships Act may be for a term not to exceed ten years, and such agreements may not 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 other jurisdiction from developing, constructing or maintaining a public project that was planned and that would or might affect the revenue that the private partner would or might derive from the public project developed under an agreement pursuant to the Public-Private Partnerships Act.

E. The public-private partnership agreement shall require that the state board of finance must approve the assignment, transfer or sale of assets or investment in a public project. Sale or lease for longer than ten years of state property requires legislative approval.

SECTION 8. FUNDING AND FINANCING.--

A. Gross receipts tax or property tax revenues shall not be pledged to any bonds issued pursuant to this act. Any other lawful source of funding may be used for the development or management of a public project pursuant to the 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 public project 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 accept money from the United States or any of its agencies to carry out the provisions of the 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.

D. 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 for the purposes of a public project.

E. A public project 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.

F. Federal, state and local money may be combined with private sector money for public project purposes as allowed by law or by the grant, gift or donation provisions.

G. Revenue bonds issued pursuant to Section 11 of the Public-Private Partnerships Act are not general obligations of this state or any local government and are not secured by or payable from any money or assets of the state or any local government other than the money and revenues specifically pledged to the repayment of the revenue bonds.

SECTION 9. REVENUE BONDS--AUTHORITY TO ISSUE.--

A. A public partner may issue revenue bonds for public projects. 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 state auditor and the attorney general, 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 Public-Private Partnerships Act.

SECTION 10. 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 11. REVENUE BONDS--LIMITATIONS--AUTHORIZATION--AUTHENTICATION.--

A. Revenue bonds or refunding bonds issued pursuant to the 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 12. SECURITY FOR BONDS.--The principal of and interest on any bonds issued pursuant to the provisions of the 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 public project 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 public project. 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 public project covered by the proceedings or mortgage;

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

C. the maintenance and insurance of the public project; and

D. the creation and maintenance of special funds from the revenues with respect to the public project 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 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 public project and the application of the revenues from the public project, and shall not have the power to incur a pecuniary liability or charge upon the state's, municipality's or county'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 or county or any charge upon its general credit or against its taxing powers.

SECTION 13. 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 public project, 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 public project 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 public project.

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

D. Prior to the issuance of the bonds, the public partner may lease the public project to a lessee under an agreement conditioned upon completion of the public project and providing for payment to the public partner of such rental 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 public project;

(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 public project 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 public project.

E. With prior approval of the state board of finance, 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 public project; 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 public project.

F. Upon prior approval of the state board of finance, 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 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 14. USE OF PROCEEDS FROM SALE OF BONDS.--

A. The proceeds from the sale of any bonds issued pursuant to the 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 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 public project 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 public project that may be acquired by purchase;

(3) the actual cost of the extension of any utility to the public project 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 15. 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 public project 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 public projects 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 Public-Private Partnerships Act may be issued separately or issued in a combination of one series or more.

SECTION 16. REFUNDING BONDS--ESCROW.--

A. Refunding bonds issued pursuant to the 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 the 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 17. 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 18. EXEMPTION FROM TAXATION.--Bonds authorized pursuant to the 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 19. REVERSION OF PUBLIC PROJECT TO PUBLIC PARTNER.--When the public-private partnership is terminated, the authority and duties of the private partner cease, except for any duties and obligations that extend beyond the termination as provided in the public-private agreement, and the public project reverts to the public partner and shall be dedicated for public use.

SECTION 20. MATERIAL DEFAULT--REMEDIES.--

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

(1) 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

(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 public project 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; and

(2) may develop and operate the public project, impose user fees for the use of the public project and comply with any service contracts.

SECTION 21. POLICE POWERS--VIOLATIONS OF LAW.--All law enforcement officers of the state or local government have the same powers and jurisdiction within the limits of the public project as they have in their respective areas of jurisdiction and access to the public project at any time to exercise such powers and jurisdictions.

SECTION 22. UTILITY CROSSINGS.--A public or private partner 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 23. PENALTIES.--A person who fails to pay a user fee required for the privilege of using property included in a public project is guilty of a petty misdemeanor and shall be sentenced as provided in Section 31-19-1 NMSA 1978.

SECTION 24. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2013.