| 1 | A bill to be entitled |
| 2 | An act relating to public-private partnership |
| 3 | infrastructure projects; creating s. 287.09475, F.S.; |
| 4 | providing legislative findings and intent; defining terms; |
| 5 | providing for the Department of Management Services and a |
| 6 | state agency or local government to receive or solicit |
| 7 | proposals to enter into a public works infrastructure |
| 8 | project agreement with a private entity, or a consortium |
| 9 | of private entities, to build, operate, or finance a |
| 10 | public works infrastructure project; providing criteria |
| 11 | for the selection of the project and the private entity |
| 12 | that will enter into a partnership agreement with the |
| 13 | participating governmental unit to build or operate the |
| 14 | project; requiring all reasonable costs to the state |
| 15 | related to infrastructure project and not part of the |
| 16 | governmental unit's work plan to be borne by the private |
| 17 | entity; authorizing the private entity to impose user fees |
| 18 | for the use of the infrastructure project by the public; |
| 19 | setting forth financing and revenue criteria for the |
| 20 | infrastructure project agreement; requiring that each |
| 21 | infrastructure facility be in compliance with all |
| 22 | applicable federal, state, and local laws, construction |
| 23 | standards, and performance standards; authorizing each |
| 24 | participating governmental unit to exercise any lawful |
| 25 | power possessed by it to aid in the development and |
| 26 | construction of the infrastructure project; providing |
| 27 | procedures for requesting and considering proposals; |
| 28 | authorizing the department and a participating |
| 29 | governmental unit to use innovative financing techniques |
| 30 | for the infrastructure project; requiring the department |
| 31 | to compile a summary of new projects each year; limiting |
| 32 | the term of the infrastructure project agreement to a |
| 33 | specified number of years; providing that the head of the |
| 34 | participating governmental unit may authorize an increase |
| 35 | in the term of a project by 25 years; providing an |
| 36 | effective date. |
| 37 |
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| 38 | Be It Enacted by the Legislature of the State of Florida: |
| 39 |
|
| 40 | Section 1. Section 287.09475, Florida Statutes, is created |
| 41 | to read: |
| 42 | 287.09475 Public-private partnership infrastructure |
| 43 | projects.-- |
| 44 | (1) The Legislature finds and declares that there is a |
| 45 | public need for the rapid construction of public works |
| 46 | infrastructure projects for the purpose of improving the |
| 47 | economic, environmental, social, and cultural infrastructure of |
| 48 | this state, and that it is in the public interest to provide for |
| 49 | the construction or expansion of public works infrastructure |
| 50 | projects. |
| 51 | (2) As used in this section, the term: |
| 52 | (a) "Department" means the Department of Management |
| 53 | Services. |
| 54 | (b) "Government" means the state or a political |
| 55 | subdivision of the state. |
| 56 | (c) "Infrastructure project" or "public works |
| 57 | infrastructure project" means a project to construct, operate, |
| 58 | or maintain the basic public works of this state, including |
| 59 | telecommunications, cable television, electricity, and broadband |
| 60 | technology infrastructure, infrastructure for the transportation |
| 61 | of gas, oil, or crude oil products; solid waste, waste water, |
| 62 | and storm water infrastructure not connected with highway |
| 63 | drainage; or other similar projects. The term does not include a |
| 64 | transportation facility governed by s. 334.30. |
| 65 | (d) "Maintain" includes ordinary repair, rehabilitation, |
| 66 | capital maintenance, maintenance replacement, and any other |
| 67 | categories of maintenance on an infrastructure project as |
| 68 | designated by the government. |
| 69 | (e) "Operate" or "operation" means an action to construct, |
| 70 | maintain, rehabilitate, improve, equip, or modify an |
| 71 | infrastructure project. |
| 72 | (f) "Private entity" means a person who enters into a |
| 73 | public-private infrastructure project agreement with a |
| 74 | participating governmental unit. |
| 75 | (g) "Participating governmental unit" means the |
| 76 | governmental unit that enters into a public-private |
| 77 | infrastructure project agreement with a private entity. |
| 78 | (h) "Public-private infrastructure project agreement" |
| 79 | means the document representing the agreement between a private |
| 80 | entity and a participating governmental unit. The agreement must |
| 81 | include: |
| 82 | 1. Acceptance by the participating governmental unit of a |
| 83 | private contribution, including a money payment, in exchange for |
| 84 | allowing the private entity to construct, operate, manage, or |
| 85 | maintain a public works infrastructure project or services |
| 86 | connected with an infrastructure project; |
| 87 | 2. The sharing of resources by the participating |
| 88 | governmental unit with a private entity and the means of |
| 89 | delivering a project or service to the public; and |
| 90 | 3. Cooperation in researching, developing, and |
| 91 | implementing projects or services for an infrastructure project. |
| 92 | (i) "User fee" means the rate, toll, fee, or other charges |
| 93 | imposed on the public by a private entity for use of all or part |
| 94 | of an infrastructure project. |
| 95 | (3)(a) In cooperation with the participating government, |
| 96 | the department and a participating governmental unit may receive |
| 97 | or solicit proposals and enter into a public-private |
| 98 | infrastructure project agreement with a private entity, or a |
| 99 | consortium of private entities, to build, operate, manage, |
| 100 | maintain, or finance a public works infrastructure project. The |
| 101 | participating governmental unit may advance a project programmed |
| 102 | in the governmental unit's adopted work program or its 10-year |
| 103 | plan. The project may use funds provided by the private entity, |
| 104 | which shall be reimbursed from user fees derived from the |
| 105 | project as programmed in the adopted work program. |
| 106 | (b) The department shall establish an application fee for |
| 107 | the submission of unsolicited proposals under this section. The |
| 108 | fee may not exceed the cost of evaluating the proposal. |
| 109 | (c) The department and a participating governmental unit |
| 110 | may engage the services of private consultants to assist in the |
| 111 | evaluation. |
| 112 | (d) Before approving a project, the department and the |
| 113 | participating governmental unit must determine whether the |
| 114 | proposed infrastructure project: |
| 115 | 1. Is in the public interest; |
| 116 | 2. Would have adequate safeguards in place to ensure that |
| 117 | no additional costs or service disruptions would affect the |
| 118 | public and residents of the state if the private entity defaults |
| 119 | or if the participating governmental unit cancels the project; |
| 120 | 3. Would have adequate safeguards in place to ensure that |
| 121 | the participating governmental unit or the private entity has |
| 122 | the opportunity to add capacity to the proposed project and |
| 123 | other infrastructure projects serving similar goals and |
| 124 | objectives; and |
| 125 | 4. Would be owned by the participating governmental unit |
| 126 | upon completion or termination of the public-private |
| 127 | infrastructure project agreement. |
| 128 | |
| 129 | The department and participating governmental unit shall ensure |
| 130 | that all reasonable costs to the state related to infrastructure |
| 131 | projects that are not part of a participating governmental |
| 132 | unit's work plan are borne by the private entity. The department |
| 133 | and the participating governmental unit shall also ensure that |
| 134 | all reasonable costs to the state and substantially affected |
| 135 | local governments and utilities related to the infrastructure |
| 136 | project are borne by the private entity for infrastructure |
| 137 | projects that are owned by private entities. |
| 138 | (4) If a public-private infrastructure project agreement |
| 139 | authorizes the private entity to impose user fees: |
| 140 | (a) The participating governmental unit may lease an |
| 141 | existing public works facility to a private entity through a |
| 142 | public-private partnership. The public-private partnership |
| 143 | infrastructure project agreement must ensure that the |
| 144 | infrastructure facility is properly operated, maintained, and |
| 145 | renewed in accordance with the participating governmental unit's |
| 146 | standards. |
| 147 | (b) The participating governmental unit may develop new |
| 148 | infrastructure projects or increase capacity of existing |
| 149 | projects through public-private partnerships. The public-private |
| 150 | partnership infrastructure project agreement must ensure that |
| 151 | the public works infrastructure project is properly operated and |
| 152 | maintained in accordance with applicable standards. |
| 153 | (c) Revenue from user fees must be regulated by the |
| 154 | participating governmental unit. The regulations governing |
| 155 | future increases in fees or rates must be included in the |
| 156 | public-private partnership infrastructure project agreement. |
| 157 | (d) The public-private partnership infrastructure project |
| 158 | agreement must include provisions that ensure that a portion of |
| 159 | revenue from projects that generate revenue is returned to the |
| 160 | participating governmental unit over the term of the agreement. |
| 161 | If an infrastructure project agreement includes the lease of an |
| 162 | existing public works facility, the participating governmental |
| 163 | unit must receive a portion of the funds upon closing the |
| 164 | agreement, with the remainder paid from excess revenue that |
| 165 | accrues during the term of the public-private infrastructure |
| 166 | project agreement. |
| 167 | (e) The private entity must provide to the department an |
| 168 | investment grade usage and revenue study prepared by an |
| 169 | internationally recognized public works revenue expert who is |
| 170 | recognized by the national bond rating agencies. The private |
| 171 | entity must also provide a financing plan that identifies the |
| 172 | project costs; lists the projected revenue by source, financing, |
| 173 | major assumptions, and internal rate of return on private |
| 174 | investments; specifies whether any government funds are |
| 175 | necessary in order to deliver a cost-feasible project; and |
| 176 | provides a total cash flow analysis beginning with |
| 177 | implementation of the project and extending for the term of the |
| 178 | public-private infrastructure project agreement. |
| 179 | (5) Each infrastructure project constructed pursuant to |
| 180 | this section shall be constructed in compliance with all |
| 181 | requirements of federal, state, and local laws; state, regional, |
| 182 | and local comprehensive plans; department rules, policies, |
| 183 | procedures, and standards for infrastructure public works |
| 184 | projects; and any other conditions that a participating |
| 185 | governmental unit determines to be in the public interest. |
| 186 | (6) The participating governmental unit may exercise its |
| 187 | powers with respect to the development and construction of state |
| 188 | and local public works infrastructure projects, including |
| 189 | eminent domain, to facilitate the development and construction |
| 190 | of infrastructure projects under this section. The department |
| 191 | and a participating governmental unit may provide services to |
| 192 | the private entity, but the public-private infrastructure |
| 193 | project agreement must provide for full reimbursement for these |
| 194 | services. |
| 195 | (7) Except as otherwise provided in this section, this |
| 196 | section does not grant additional powers to, or further |
| 197 | restrict, local governmental entities from regulating and |
| 198 | entering into cooperative arrangements with private entities for |
| 199 | the planning, construction, and operation of infrastructure |
| 200 | projects. |
| 201 | (8) Procurement conducted by the private entity, the |
| 202 | department, and participating governmental units shall adhere to |
| 203 | the requirements of this subsection. Generally accepted business |
| 204 | practices must be part of the procurement process or included in |
| 205 | the public-private partnership infrastructure project agreement. |
| 206 | (a) The department and participating governmental unit may |
| 207 | request proposals from private entities for infrastructure |
| 208 | projects or, if the department receives an unsolicited proposal, |
| 209 | the department shall publish a notice in the Florida |
| 210 | Administrative Weekly and a newspaper of general circulation at |
| 211 | least once a week for 2 weeks stating that the department has |
| 212 | received the proposal and will accept, for 120 days after the |
| 213 | initial date of publication, other proposals for the same |
| 214 | project purpose. A copy of the notice must be mailed to each |
| 215 | local government in the affected area. |
| 216 | (b) A private entity must be qualified by the department |
| 217 | as part of the procurement process, which must ensure that the |
| 218 | private entity meets at least the minimum qualifying standards |
| 219 | of the participating governmental unit for providing |
| 220 | professional services and constructing infrastructure projects. |
| 221 | (c) Procurement documents must include provisions for |
| 222 | performance by the private entity and payment of subcontractors, |
| 223 | including, but not limited to, surety bonds, letters of credit, |
| 224 | parent company guarantees, and lender and equity partner |
| 225 | guarantees. The department and the participating governmental |
| 226 | unit must balance the structure of the security requirements |
| 227 | with the cost of the security in order to ensure the most |
| 228 | efficient pricing. |
| 229 | (d) After the public notification period has expired, the |
| 230 | department and participating governmental unit shall rank the |
| 231 | proposals in order of preference. In ranking the proposals, the |
| 232 | department and participating governmental unit may consider |
| 233 | factors that include, but are not limited to, professional |
| 234 | qualifications, general business terms, innovative engineering |
| 235 | or cost-reduction terms, financing plans, and the need for state |
| 236 | funds to deliver the infrastructure project. If the department |
| 237 | and participating governmental unit are not satisfied with the |
| 238 | results of the negotiations, the department and participating |
| 239 | governmental unit may terminate negotiations with the highest- |
| 240 | ranked proposal and may consider the second-ranked and lower- |
| 241 | ranked proposals, in order, using the same procedure. If only |
| 242 | one proposal is received, the department and participating |
| 243 | governmental unit may negotiate in good faith and, if the |
| 244 | department and participating governmental unit are not satisfied |
| 245 | with the results of the negotiations, the department and |
| 246 | participating governmental unit may terminate negotiations with |
| 247 | the proposer. Notwithstanding this subsection, the department |
| 248 | and a participating governmental unit may reject all proposals |
| 249 | at any point in the process up to completion of a contract with |
| 250 | the proposer. |
| 251 | (e) The department and a participating governmental unit |
| 252 | must provide an independent analysis of the proposed public- |
| 253 | private infrastructure project agreement which demonstrates its |
| 254 | cost-effectiveness and overall public benefit before moving |
| 255 | forward with procurement and, if the procurement moves forward, |
| 256 | before awarding the contract. |
| 257 | (9) The department and a participating governmental unit |
| 258 | may use innovative finance techniques associated with a public- |
| 259 | private partnership under this section, including, but not |
| 260 | limited to, federal loans as provided in 23 and 49 C.F.R., |
| 261 | commercial bank loans, and hedges against inflation from |
| 262 | commercial banks or other private sources. |
| 263 | (10) The department and a participating governmental unit |
| 264 | may enter into a public-private infrastructure project agreement |
| 265 | that includes extended terms providing annual payments for |
| 266 | performance based on the availability of services or the opening |
| 267 | of a facility to the public. In addition to other provisions in |
| 268 | this section, the following apply: |
| 269 | (a) The annual payments under a public works |
| 270 | infrastructure project agreement must be included in the |
| 271 | department's and participating governmental unit's tentative |
| 272 | work program and the long-range infrastructure plan for the |
| 273 | applicable metropolitan planning organization. The department |
| 274 | and participating governmental unit shall ensure that annual |
| 275 | payments on multiyear public-private infrastructure project |
| 276 | agreements are prioritized ahead of new capacity projects in the |
| 277 | development and updating of the tentative work infrastructure |
| 278 | project. |
| 279 | (b) The annual payments must be subject to annual |
| 280 | appropriation by the Legislature as specified in the General |
| 281 | Appropriations Act which provides the initial funding support |
| 282 | for the program. |
| 283 | (11) The department shall compile a summary of new public |
| 284 | works infrastructure projects each year. This summary shall |
| 285 | include identification of planned funding beyond a 5-year |
| 286 | tentative work program and the public involvement process for |
| 287 | the project, including discussion of the use of future funds to |
| 288 | deliver the project. |
| 289 | (12) A public-private infrastructure project agreement |
| 290 | under this section is limited to a term not exceeding 50 years. |
| 291 | Upon making written findings that a public-private |
| 292 | infrastructure project agreement requires a term in excess of 50 |
| 293 | years, the head of the participating governmental unit may |
| 294 | authorize a term of up to 75 years. Infrastructure project |
| 295 | agreements under this section may not have a term in excess of |
| 296 | 75 years unless specifically approved by the Legislature. The |
| 297 | department and the participating governmental unit shall |
| 298 | identify new projects having a term exceeding 75 years in the |
| 299 | transmittal letter that accompanies the submission of the |
| 300 | tentative work program to the Governor and the Legislature. |
| 301 | Section 2. This act shall take effect July 1, 2009. |