Florida Senate - 2009 SB 2060 By Senator Baker 20-01438-09 20092060__ 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 5 terms; providing for the Department of Management 6 Services and a state agency or local government to 7 receive or solicit proposals to enter into a public 8 works infrastructure project agreement with a private 9 entity, or a consortium of private entities, to build, 10 operate, or finance a public works infrastructure 11 project; providing criteria for the selection of the 12 project and the private entity that will enter into a 13 partnership agreement with the participating 14 governmental unit to build or operate the project; 15 requiring all reasonable costs to the state related to 16 infrastructure project and not part of the 17 governmental unit's work plan to be borne by the 18 private entity; authorizing the private entity to 19 impose user fees for the use of the infrastructure 20 project by the public; setting forth financing and 21 revenue criteria for the infrastructure project 22 agreement; requiring that each infrastructure facility 23 be in compliance with all applicable federal, state, 24 and local laws, construction standards, and 25 performance standards; authorizing each participating 26 governmental unit to exercise any lawful power 27 possessed by it to aid in the development and 28 construction of the infrastructure project; providing 29 procedures for requesting and considering proposals; 30 authorizing the department and a participating 31 governmental unit to use innovative financing 32 techniques for the infrastructure project; requiring 33 the department to compile a summary of new projects 34 each year; limiting the term of the infrastructure 35 project agreement to a specified number of years; 36 providing that the head of the participating 37 governmental unit may authorize an increase in the 38 term of a project by 25 years; providing an effective 39 date. 40 41 Be It Enacted by the Legislature of the State of Florida: 42 43 Section 1. Section 287.09475, Florida Statutes, is created 44 to read: 45 287.09475 Public-private partnership infrastructure 46 projects.— 47 (1) The Legislature finds and declares that there is a 48 public need for the rapid construction of public works 49 infrastructure projects for the purpose of improving the 50 economic, environmental, social, and cultural infrastructure of 51 this state, and that it is in the public interest to provide for 52 the construction or expansion of public works infrastructure 53 projects. 54 (2) As used in this section, the term: 55 (a) “Department” means the Department of Management 56 Services. 57 (b) “Government” means the state or a political subdivision 58 of the state. 59 (c) “Infrastructure project” or “public works 60 infrastructure project” means a project to construct, operate, 61 or maintain the basic public works of this state, including 62 telecommunications, cable television, electricity, and broadband 63 technology infrastructure, infrastructure for the transportation 64 of gas, oil, or crude oil products; solid waste, waste water, 65 and storm water infrastructure not connected with highway 66 drainage; or other similar projects. The term does not include a 67 transportation facility governed by s. 334.30. 68 (d) “Maintain” includes ordinary repair, rehabilitation, 69 capital maintenance, maintenance replacement, and any other 70 categories of maintenance on an infrastructure project as 71 designated by the government. 72 (e) “Operate” or “operation” means an action to construct, 73 maintain, rehabilitate, improve, equip, or modify an 74 infrastructure project. 75 (f) “Private entity” means a person who enters into a 76 public-private infrastructure project agreement with a 77 participating governmental unit. 78 (g) “Participating governmental unit” means the 79 governmental unit that enters into a public-private 80 infrastructure project agreement with a private entity. 81 (h) “Public-private infrastructure project agreement” means 82 the document representing the agreement between a private entity 83 and a participating governmental unit. The agreement must 84 include: 85 1. Acceptance by the participating governmental unit of a 86 private contribution, including a money payment, in exchange for 87 allowing the private entity to construct, operate, manage, or 88 maintain a public works infrastructure project or services 89 connected with an infrastructure project; 90 2. The sharing of resources by the participating 91 governmental unit with a private entity and the means of 92 delivering a project or service to the public; and 93 3. Cooperation in researching, developing, and implementing 94 projects or services for an infrastructure project. 95 (i) “User fee” means the rate, toll, fee, or other charges 96 imposed on the public by a private entity for use of all or part 97 of an infrastructure project. 98 (3)(a) In cooperation with the participating government, 99 the department and a participating governmental unit may receive 100 or solicit proposals and enter into a public-private 101 infrastructure project agreement with a private entity, or a 102 consortium of private entities, to build, operate, manage, 103 maintain, or finance a public works infrastructure project. The 104 participating governmental unit may advance a project programmed 105 in the governmental unit's adopted work program or its 10-year 106 plan. The project may use funds provided by the private entity, 107 which shall be reimbursed from user fees derived from the 108 project as programmed in the adopted work program. 109 (b) The department shall establish an application fee for 110 the submission of unsolicited proposals under this section. The 111 fee may not exceed the cost of evaluating the proposal. 112 (c) The department and a participating governmental unit 113 may engage the services of private consultants to assist in the 114 evaluation. 115 (d) Before approving a project, the department and the 116 participating governmental unit must determine whether the 117 proposed infrastructure project: 118 1. Is in the public interest; 119 2. Would have adequate safeguards in place to ensure that 120 no additional costs or service disruptions would affect the 121 public and residents of the state if the private entity defaults 122 or if the participating governmental unit cancels the project; 123 3. Would have adequate safeguards in place to ensure that 124 the participating governmental unit or the private entity has 125 the opportunity to add capacity to the proposed project and 126 other infrastructure projects serving similar goals and 127 objectives; and 128 4. Would be owned by the participating governmental unit 129 upon completion or termination of the public-private 130 infrastructure project agreement. 131 132 The department and participating governmental unit shall ensure 133 that all reasonable costs to the state related to infrastructure 134 projects that are not part of a participating governmental 135 unit's work plan are borne by the private entity. The department 136 and the participating governmental unit shall also ensure that 137 all reasonable costs to the state and substantially affected 138 local governments and utilities related to the infrastructure 139 project are borne by the private entity for infrastructure 140 projects that are owned by private entities. 141 (4) If a public-private infrastructure project agreement 142 authorizes the private entity to impose user fees: 143 (a) The participating governmental unit may lease an 144 existing public works facility to a private entity through a 145 public-private partnership. The public-private partnership 146 infrastructure project agreement must ensure that the 147 infrastructure facility is properly operated, maintained, and 148 renewed in accordance with the participating governmental unit's 149 standards. 150 (b) The participating governmental unit may develop new 151 infrastructure projects or increase capacity of existing 152 projects through public-private partnerships. The public-private 153 partnership infrastructure project agreement must ensure that 154 the public works infrastructure project is properly operated and 155 maintained in accordance with applicable standards. 156 (c) Revenue from user fees must be regulated by the 157 participating governmental unit. The regulations governing 158 future increases in fees or rates must be included in the 159 public-private partnership infrastructure project agreement. 160 (d) The public-private partnership infrastructure project 161 agreement must include provisions that ensure that a portion of 162 revenue from projects that generate revenue is returned to the 163 participating governmental unit over the term of the agreement. 164 If an infrastructure project agreement includes the lease of an 165 existing public works facility, the participating governmental 166 unit must receive a portion of the funds upon closing the 167 agreement, with the remainder paid from excess revenue that 168 accrues during the term of the public-private infrastructure 169 project agreement. 170 (e) The private entity must provide to the department an 171 investment grade usage and revenue study prepared by an 172 internationally recognized public works revenue expert who is 173 recognized by the national bond rating agencies. The private 174 entity must also provide a financing plan that identifies the 175 project costs; lists the projected revenue by source, financing, 176 major assumptions, and internal rate of return on private 177 investments; specifies whether any government funds are 178 necessary in order to deliver a cost-feasible project; and 179 provides a total cash flow analysis beginning with 180 implementation of the project and extending for the term of the 181 public-private infrastructure project agreement. 182 (5) Each infrastructure project constructed pursuant to 183 this section shall be constructed in compliance with all 184 requirements of federal, state, and local laws; state, regional, 185 and local comprehensive plans; department rules, policies, 186 procedures, and standards for infrastructure public works 187 projects; and any other conditions that a participating 188 governmental unit determines to be in the public interest. 189 (6) The participating governmental unit may exercise its 190 powers with respect to the development and construction of state 191 and local public works infrastructure projects, including 192 eminent domain, to facilitate the development and construction 193 of infrastructure projects under this section. The department 194 and a participating governmental unit may provide services to 195 the private entity, but the public-private infrastructure 196 project agreement must provide for full reimbursement for these 197 services. 198 (7) Except as otherwise provided in this section, this 199 section does not grant additional powers to, or further 200 restrict, local governmental entities from regulating and 201 entering into cooperative arrangements with private entities for 202 the planning, construction, and operation of infrastructure 203 projects. 204 (8) Procurement conducted by the private entity, the 205 department, and participating governmental units shall adhere to 206 the requirements of this subsection. Generally accepted business 207 practices must be part of the procurement process or included in 208 the public-private partnership infrastructure project agreement. 209 (a) The department and participating governmental unit may 210 request proposals from private entities for infrastructure 211 projects or, if the department receives an unsolicited proposal, 212 the department shall publish a notice in the Florida 213 Administrative Weekly and a newspaper of general circulation at 214 least once a week for 2 weeks stating that the department has 215 received the proposal and will accept, for 120 days after the 216 initial date of publication, other proposals for the same 217 project purpose. A copy of the notice must be mailed to each 218 local government in the affected area. 219 (b) A private entity must be qualified by the department as 220 part of the procurement process, which must ensure that the 221 private entity meets at least the minimum qualifying standards 222 of the participating governmental unit for providing 223 professional services and constructing infrastructure projects. 224 (c) Procurement documents must include provisions for 225 performance by the private entity and payment of subcontractors, 226 including, but not limited to, surety bonds, letters of credit, 227 parent company guarantees, and lender and equity partner 228 guarantees. The department and the participating governmental 229 unit must balance the structure of the security requirements 230 with the cost of the security in order to ensure the most 231 efficient pricing. 232 (d) After the public notification period has expired, the 233 department and participating governmental unit shall rank the 234 proposals in order of preference. In ranking the proposals, the 235 department and participating governmental unit may consider 236 factors that include, but are not limited to, professional 237 qualifications, general business terms, innovative engineering 238 or cost-reduction terms, financing plans, and the need for state 239 funds to deliver the infrastructure project. If the department 240 and participating governmental unit are not satisfied with the 241 results of the negotiations, the department and participating 242 governmental unit may terminate negotiations with the highest 243 ranked proposal and may consider the second-ranked and lower 244 ranked proposals, in order, using the same procedure. If only 245 one proposal is received, the department and participating 246 governmental unit may negotiate in good faith and, if the 247 department and participating governmental unit are not satisfied 248 with the results of the negotiations, the department and 249 participating governmental unit may terminate negotiations with 250 the proposer. Notwithstanding this subsection, the department 251 and a participating governmental unit may reject all proposals 252 at any point in the process up to completion of a contract with 253 the proposer. 254 (e) The department and a participating governmental unit 255 must provide an independent analysis of the proposed public 256 private infrastructure project agreement which demonstrates its 257 cost-effectiveness and overall public benefit before moving 258 forward with procurement and, if the procurement moves forward, 259 before awarding the contract. 260 (9) The department and a participating governmental unit 261 may use innovative finance techniques associated with a public 262 private partnership under this section, including, but not 263 limited to, federal loans as provided in 23 and 49 C.F.R., 264 commercial bank loans, and hedges against inflation from 265 commercial banks or other private sources. 266 (10) The department and a participating governmental unit 267 may enter into a public-private infrastructure project agreement 268 that includes extended terms providing annual payments for 269 performance based on the availability of services or the opening 270 of a facility to the public. In addition to other provisions in 271 this section, the following apply: 272 (a) The annual payments under a public works infrastructure 273 project agreement must be included in the department's and 274 participating governmental unit's tentative work program and the 275 long-range infrastructure plan for the applicable metropolitan 276 planning organization. The department and participating 277 governmental unit shall ensure that annual payments on multiyear 278 public-private infrastructure project agreements are prioritized 279 ahead of new capacity projects in the development and updating 280 of the tentative work infrastructure project. 281 (b) The annual payments must be subject to annual 282 appropriation by the Legislature as specified in the General 283 Appropriations Act which provides the initial funding support 284 for the program. 285 (11) The department shall compile a summary of new public 286 works infrastructure projects each year. This summary shall 287 include identification of planned funding beyond a 5-year 288 tentative work program and the public involvement process for 289 the project, including discussion of the use of future funds to 290 deliver the project. 291 (12) A public-private infrastructure project agreement 292 under this section is limited to a term not exceeding 50 years. 293 Upon making written findings that a public-private 294 infrastructure project agreement requires a term in excess of 50 295 years, the head of the participating governmental unit may 296 authorize a term of up to 75 years. Infrastructure project 297 agreements under this section may not have a term in excess of 298 75 years unless specifically approved by the Legislature. The 299 department and the participating governmental unit shall 300 identify new projects having a term exceeding 75 years in the 301 transmittal letter that accompanies the submission of the 302 tentative work program to the Governor and the Legislature. 303 Section 2. This act shall take effect July 1, 2009.