A bipartisan committee will seek testimony from survivors of alleged sexual abuse at the ranch, located about 50km south of Santa Fe, the state capital. Legislators are also urging local residents to testify.
Epstein died in what was ruled a suicide in a New York jail in 2019 while facing federal sex trafficking charges.
The so-called truth commission, comprising four lawmakers, seeks to identify ranch guests and state officials who may have known what was going on at the sprawling property, or taken part in alleged sexual abuse in its hacienda-style mansion and guest houses.
The Democratic-led investigation adds to political pressure to uncover Epstein's crimes that has become a major challenge for President Donald Trump, weeks after the Justice Department released millions of Epstein-related files that shed new light on activities at the ranch.
The files reveal ties between Epstein and two former Democratic governors and an attorney general of New Mexico.
The legislation, which passed New Mexico's House of Representatives by a unanimous vote, could pose risks to any additional politicians linked to Epstein in the Democratic-run state, as well as scientists, investors and other high-profile individuals who visited the ranch.
The investigation, which has subpoena power, aims to close gaps in New Mexico law that may have allowed Epstein to operate in the state. The committee starts work on Tuesday, and will deliver interim findings in July and a final report by year-end.
"He was basically doing anything he wanted in this state without any accountability whatsoever," said New Mexico state Representative Andrea Romero, a Democrat, who co-sponsored the initiative.
Testimony to the committee could be used for future prosecutions, she said.
Victim advocates applauded the move, saying Zorro Ranch had been overlooked by federal investigations that focused on Epstein's Caribbean island and New York townhouse.
"Many of the survivors had experiences in New Mexico, and as we've learned, you know, there were local politicians and other people that were aware of what was happening in New Mexico," said lawyer Sigrid McCawley, whose law firm has represented hundreds of Epstein survivors.
They include the late Virginia Giuffre, who was abused many times at the ranch, she said.
Several civil suits accuse Epstein of sexually assaulting girls at Zorro Ranch. He was never charged for the alleged offences.
Romero said there was no record of federal law enforcement searching what was known locally as "the playboy ranch" where Epstein is accused of sexually abusing a 16-year-old girl as early as 1996.
Former New Mexico Attorney General Hector Balderas launched a probe in 2019 that was put on hold at the request of federal prosecutors to avoid "parallel investigation".
New Mexico Attorney General Raul Torrez has assigned a special agent to probe allegations that may come through the truth commission, spokesperson Lauren Rodriguez said.
Democratic State Representative Marianna Anaya, an advocate for sexual assault survivors who co-sponsored the legislation, is working on accompanying legislation to extend New Mexico's statute of limitations for childhood sexual assault that would allow civil actions by survivors of Epstein's alleged abuse.
Epstein flew in guests and "masseuses," and hired local massage therapists to work there, ranch manager Brice Gordon told the FBI in 2007, according to a report in the Epstein files.
In an unsealed 2016 court deposition, Giuffre testified Epstein's partner Ghislaine Maxwell told her to give the late former New Mexico Governor Bill Richardson a "massage" at the ranch.
In Giuffre's memoir, she said an instruction from Maxwell to provide a "massage" meant a victim should provide a sexual encounter to an abuser.
In the documentary Surviving Jeffrey Epstein, former Santa Fe massage therapist Rachel Benavidez accused Epstein of sexual abuse when she was hired to work at the ranch.
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