New Mexico House passes PPP bill

The Public-Private Partnerships Act would make New Mexico the 35th US state to approve private investment in state-owned utilities and infrastructure projects.

House Bill 299, a new public-private partnership bill, passed the New Mexico House of Representatives with strong Republican backing earlier this month.

Introduced by Representative Larry A. Larranaga on February 3, the Public-Private Partnership Act would clear the way for the state to enter long-term partnerships with private companies to build schools, hospitals, parking lots and garages, water and sewage projects, waste facilities, roads, railways, subways and other transportation facilities, utilities including communications infrastructure, conservation projects, dams and reservoirs, government offices, and cultural and recreational facilities.

Project delivery methods approved include agreements that provide for private partners to design, build, manage, maintain, operate or lease and any other arrangements deemed publicly beneficial by public partners.

The day following its House passage, Larranga told local news outlet The New Mexican that the bill was “a way to do projects we need that otherwise wouldn't be built. It helps contractors, who do the work and collect rent. And it helps financial institutions. It's a partnership. Thirty-four other states use this process. It's time New Mexico does, too.”

Larranga cited $1.2 billion in water projects that the state has need for that are not currently being built.

House Democrats are less optimistic about the bill, which passed on a 38-27 margin (including once abstention and four excusals) with only two Democrats in support. This followed a narrow passage by minimum margins through the House Judiciary Committee and Transportation and Public Works Committee.

“This legislation could sell all of New Mexico's future state projects to out-of-state corporations,” said Democrat Representative Andres Romero in a news release. “Most public projects affect our natural resources, and it is unacceptable that House Republicans just voted to sell our land and water to the highest bidder.”

Romero's central criticism is that the bill is too broad and “leaves too much room for abuse,” unlike similar legislation in states such as Maryland, which cleared the way for public-private partnerships in 2013.

The State Attorney General's Office said that the parts of the bill that deal with the bidding process may be in conflict with the state procurement code.

Larranga introduced similar legislation along with Representative Timothy M. Keller in 2013, which passed through the House 50-19, but that bill died in the State Senate Corporations and Transportation Committee.

The effective date of the provisions in the Public-Private Partnership Act would be July 1, 2015, should the bill pass the Democrat-controlled Senate this time around and receive approval from Governor Susana Martinez.