Florida Senate - 2013                               CS for SB 84
       By the Committee on Community Affairs; and Senator Diaz de la
       578-01022-13                                            201384c1
    1                        A bill to be entitled                      
    2         An act relating to public-private partnerships;
    3         creating s. 287.05712, F.S.; providing definitions;
    4         providing legislative findings and intent relating to
    5         the construction or improvement by private entities of
    6         facilities used predominantly for a public purpose;
    7         providing procurement procedures; providing
    8         requirements for project approval; providing project
    9         qualifications and process; providing for notice to
   10         affected local jurisdictions; providing for
   11         comprehensive agreements between a public and a
   12         private entity; providing for use fees; providing for
   13         financing sources for certain projects by a private
   14         entity; providing powers and duties for private
   15         entities; providing for expiration or termination of
   16         agreements; providing for the applicability of
   17         sovereign immunity for public entities with respect to
   18         qualified projects; providing for construction of the
   19         act; providing an effective date.
   21  Be It Enacted by the Legislature of the State of Florida:
   23         Section 1. Section 287.05712, Florida Statutes, is created
   24  to read:
   25         287.05712Public-private partnerships.—
   26         (1) DEFINITIONS.—As used in this section, the term:
   27         (a) “Affected local jurisdiction” means a county,
   28  municipality, or special district in which all or a portion of a
   29  qualifying project is located.
   30         (b) “Develop” means to plan, design, finance, lease,
   31  acquire, install, construct, or expand.
   32         (c) “Fees” means charges imposed by the private entity of a
   33  qualifying project for use of all or a portion of such
   34  qualifying project pursuant to a comprehensive agreement.
   35         (d) “Lease payment” means any form of payment, including a
   36  land lease, by a public entity to the private entity of a
   37  qualifying project for the use of the project.
   38         (e) “Material default” means a nonperformance of its duties
   39  by the private entity of a qualifying project which jeopardizes
   40  adequate service to the public from the project.
   41         (f) “Operate” means to finance, maintain, improve, equip,
   42  modify, or repair.
   43         (g) “Private entity” means any natural person, corporation,
   44  general partnership, limited liability company, limited
   45  partnership, joint venture, business trust, public-benefit
   46  corporation, nonprofit entity, or other private business entity.
   47         (h) “Proposal” means a plan for a qualifying project with
   48  detail beyond a conceptual level for which terms such as fixing
   49  costs, payment schedules, financing, deliverables, and project
   50  schedule are defined.
   51         (i) “Qualifying project” means:
   52         1. A facility or project that serves a public purpose,
   53  including, but not limited to, any ferry or mass transit
   54  facility, vehicle parking facility, airport or seaport facility,
   55  power-generating facility, rail facility or project, fuel supply
   56  facility, oil or gas pipeline, medical or nursing care facility,
   57  recreational facility, sporting or cultural facility, or
   58  educational facility or other building or facility that is used
   59  or will be used by a public educational institution, or any
   60  other public facility or infrastructure that is used or will be
   61  used by the public at large or in support of an accepted public
   62  purpose or activity;
   63         2. An improvement, including equipment, of a building that
   64  will be principally used by a public entity or the public at
   65  large or that supports a service delivery system in the public
   66  sector; or
   67         3. A water, wastewater, or surface water management
   68  facility or other related infrastructure.
   69         (j) “Responsible public entity” means a county,
   70  municipality, school board, or university, or any other
   71  political subdivision of the state; a public body politic and
   72  corporate; or a regional entity that serves a public purpose and
   73  is authorized to develop or operate a qualifying project.
   74         (k) “Revenues” means the income, earnings, user fees, lease
   75  payments, or other service payments relating to the development
   76  or operation of a qualifying project, including, but not limited
   77  to, money received as grants or otherwise from the Federal
   78  Government, a public entity, or an agency or instrumentality
   79  thereof in aid of the qualifying project.
   80         (l) “Service contract” means a contract between a public
   81  entity and the private entity which defines the terms of the
   82  services to be provided with respect to a qualifying project.
   83         (2) LEGISLATIVE FINDINGS AND INTENT.—The Legislature finds
   84  that there is a public need for the construction or upgrade of
   85  facilities that are used predominantly for public purposes and
   86  that it is in the public’s interest to provide for the
   87  construction or upgrade of the facilities.
   88         (a) The Legislature also finds that:
   89         1. There is a public need for timely and cost-effective
   90  acquisition, design, construction, improvement, renovation,
   91  expansion, equipping, maintenance, operation, implementation, or
   92  installation of public projects, including educational
   93  facilities, transportation facilities, water or wastewater
   94  management facilities and infrastructure, technology
   95  infrastructure, roads, highways, bridges, and other public
   96  infrastructure and government facilities within the state which
   97  serve a public need and purpose, and that such public need may
   98  not be wholly satisfied by existing procurement methods.
   99         2. There are inadequate resources to develop new
  100  educational facilities, transportation facilities, water or
  101  wastewater management facilities and infrastructure, technology
  102  infrastructure, roads, highways, bridges, and other public
  103  infrastructure and government facilities for the benefit of
  104  residents of this state, and that a public-private partnership
  105  has demonstrated that it can meet the needs by improving the
  106  schedule for delivery, lowering the cost, and providing other
  107  benefits to the public.
  108         3. There are state and federal tax incentives that promote
  109  partnerships between public and private entities to develop and
  110  operate qualifying projects.
  111         4. A procurement under this section serves the public
  112  purpose of this section if such action facilitates the timely
  113  development or operation of a qualifying project.
  114         (b) It is the intent of the Legislature to encourage
  115  investment in the state by private entities; to facilitate
  116  various bond financing mechanisms, private capital, and other
  117  funding sources for the development and operation of qualifying
  118  projects, including expansion and acceleration of such financing
  119  to meet the public need; and to provide the greatest possible
  120  flexibility to public and private entities contracting for the
  121  provision of public services.
  122         (3) PROCUREMENT PROCEDURES.—A responsible public entity may
  123  receive unsolicited proposals or may solicit proposals for
  124  qualifying projects and may thereafter enter into an agreement
  125  with a private entity, or a consortium of private entities, for
  126  the building, upgrade, operation, ownership, or financing of
  127  facilities.
  128         (a) The responsible public entity may establish a
  129  reasonable application fee for the submission of an unsolicited
  130  proposal under this section. The fee must be sufficient to pay
  131  the costs of evaluating the proposal. The responsible public
  132  entity may engage the services of a private consultant to assist
  133  in the evaluation.
  134         (b) The responsible public entity may request a proposal
  135  from private entities for a public-private project or, if the
  136  public entity receives an unsolicited proposal, the public
  137  entity shall publish notice in the Florida Administrative
  138  Register and a newspaper of general circulation at least once a
  139  week for 2 weeks stating that the public entity has received a
  140  proposal and will accept for 21 days after the initial date of
  141  publication other proposals for the same project. A copy of the
  142  notice must be mailed to each local government in the affected
  143  area. The scope of the proposal may be publicized for the
  144  purpose of soliciting competing proposals; however, the
  145  financial terms of the proposal may not be disclosed until the
  146  terms of all competing bids are simultaneously disclosed in
  147  accordance with the applicable law governing procurement
  148  procedures for the qualifying project.
  149         (c) A responsible public entity that is a school board may
  150  enter into a comprehensive agreement only with the approval of
  151  the local governing body.
  152         (d) Before approval, the responsible public entity must
  153  determine that the proposed project:
  154         1. Is in the public’s best interest;
  155         2. Is for a facility that is owned by the responsible
  156  public entity or for a facility for which ownership will be
  157  conveyed to the responsible public entity;
  158         3. Has adequate safeguards in place to ensure that
  159  additional costs or service disruptions are not imposed on the
  160  public in the event of material default or cancellation of the
  161  agreement by the responsible public entity;
  162         4. Has adequate safeguards in place to ensure that the
  163  responsible public entity or the private entity has the
  164  opportunity to add capacity to the proposed project or other
  165  facilities serving similar predominantly public purposes; and
  166         5. Will be owned by the responsible public entity upon
  167  completion or termination of the agreement and upon payment of
  168  the amounts financed.
  169         (e) Before signing any comprehensive agreement, the
  170  responsible public entity must consider a reasonable finance
  171  plan that is consistent with subsection (9), the project cost,
  172  revenues by source, available financing, major assumptions,
  173  internal rate of return on private investments, if any
  174  governmental funds are assumed in order to deliver a cost
  175  feasible project, and a total cash-flow analysis beginning with
  176  the implementation of the project and extending for the term of
  177  the agreement.
  178         (f) In considering an unsolicited proposal, the responsible
  179  public entity may require from the private entity an investment
  180  grade technical study prepared by a nationally recognized expert
  181  who is accepted by national bond rating agencies. In evaluating
  182  the technical study, the responsible public entity may rely upon
  183  internal staff reports prepared by personnel familiar with the
  184  operation of similar facilities or the advice of external
  185  advisors or consultants having relevant experience.
  186         (4) PROJECT APPROVAL REQUIREMENTS.—An unsolicited proposal
  187  from a private entity for approval of a qualifying project must
  188  be accompanied by the following material and information, unless
  189  waived by the responsible public entity:
  190         (a) A description of the qualifying project, including the
  191  conceptual design of the facilities or a conceptual plan for the
  192  provision of services, and a schedule for the initiation and
  193  completion of the qualifying project.
  194         (b) A description of the method by which the private entity
  195  proposes to secure any necessary property interests that are
  196  required for the qualifying project.
  197         (c) A description of the private entity’s general plans for
  198  financing the qualifying project, including the sources of the
  199  private entity’s funds and identification of any dedicated
  200  revenue source or proposed debt or equity investment on behalf
  201  of the private entity.
  202         (d) The name and address of a person who may be contacted
  203  for further information concerning the proposal.
  204         (e) The proposed user fees, lease payments, or other
  205  service payments over the term of a comprehensive agreement, and
  206  the methodology and circumstances for changes to the user fees,
  207  lease payments, and other service payments over time.
  208         (f) Any additional material or information that the
  209  responsible public entity reasonably requests.
  211         (a) The private entity must meet the minimum standards
  212  contained in the responsible public entity’s guidelines for
  213  qualifying professional services and contracts for traditional
  214  procurement projects.
  215         (b) The responsible public entity must:
  216         1. Ensure that provisions are made for the private entity’s
  217  performance and payment of subcontractors, including, but not
  218  limited to, surety bonds, letters of credit, parent company
  219  guarantees, and lender and equity partner guarantees. For the
  220  components of the qualifying project which involve construction
  221  performance and payment, bonds are required and are subject to
  222  the recordation, notice, suit limitation, and other requirements
  223  of s. 255.05.
  224         2. Ensure the most efficient pricing of the security
  225  package that provides for the performance and payment of
  226  subcontractors.
  227         3. Ensure that provisions are made for the transfer of the
  228  private entity’s obligations if the comprehensive agreement is
  229  terminated or a material default occurs.
  230         (c) After the public notification period has expired in the
  231  case of an unsolicited proposal, the responsible public entity
  232  shall rank the proposals received in order of preference. In
  233  ranking the proposals, the responsible public entity may
  234  consider factors that include, but are not limited to,
  235  professional qualifications, general business terms, innovative
  236  design techniques or cost-reduction terms, and finance plans. If
  237  the responsible public entity is not satisfied with the results
  238  of the negotiations, the responsible public entity may terminate
  239  negotiations with the proposer and negotiate with the second
  240  ranked or subsequent-ranked firms, in the order consistent with
  241  this procedure. If only one proposal is received, the
  242  responsible public entity may negotiate in good faith, and if
  243  the public entity is not satisfied with the results of the
  244  negotiations, the public entity may terminate negotiations with
  245  the proposer. Notwithstanding this paragraph, the responsible
  246  public entity may reject all proposals at any point in the
  247  process until a contract with the proposer is executed.
  248         (d) The responsible public entity shall perform an
  249  independent analysis of the proposed public-private partnership
  250  which demonstrates the cost-effectiveness and overall public
  251  benefit before the procurement process is initiated or before
  252  the contract is awarded.
  253         (e) The responsible public entity may approve the
  254  development or operation of an educational facility, a
  255  transportation facility, a water or wastewater management
  256  facility or related infrastructure, a technology infrastructure
  257  or other public infrastructure, or a governmental facility
  258  needed by the responsible public entity as a qualifying project,
  259  or the design or equipping of a qualifying project that is
  260  developed or operated, if:
  261         1. There is a public need for or benefit derived from a
  262  project of the type that the private entity proposes as the
  263  qualifying project.
  264         2. The estimated cost of the qualifying project is
  265  reasonable in relation to similar facilities.
  266         3. The private entity’s plans will result in the timely
  267  acquisition, design, construction, improvement, renovation,
  268  expansion, equipping, maintenance, or operation of the
  269  qualifying project.
  270         (f) The responsible public entity may charge a reasonable
  271  fee to cover the costs of processing, reviewing, and evaluating
  272  the request, including, but not limited to, reasonable attorney
  273  fees and fees for financial and technical advisors or
  274  consultants and for other necessary advisors or consultants.
  275         (g) Upon approval of a qualifying project, the responsible
  276  public entity shall establish a date for the commencement of
  277  activities related to the qualifying project. The responsible
  278  public entity may extend the commencement date.
  279         (h) Approval of a qualifying project by the responsible
  280  public entity is subject to entering into a comprehensive
  281  agreement with the private entity.
  283         (a) The responsible public entity must notify each affected
  284  local jurisdiction by furnishing a copy of the proposal to each
  285  affected local jurisdiction when considering a proposal for a
  286  qualifying project.
  287         (b) Each affected local jurisdiction that is not a
  288  responsible public entity for the respective qualifying project
  289  may, within 60 days after receiving the notice, submit in
  290  writing any comments to the responsible public entity and
  291  indicate whether the facility is incompatible with the local
  292  comprehensive plan, the local infrastructure development plan,
  293  the capital improvements budget, or other governmental spending
  294  plan. The responsible public entity shall consider the comments
  295  of the affected local jurisdiction before entering into a
  296  comprehensive agreement with a private entity. If an affected
  297  local jurisdiction fails to respond to the responsible public
  298  entity within the time provided in this paragraph, the
  299  nonresponse is deemed an acknowledgement by the affected local
  300  jurisdiction that the qualifying project is compatible with the
  301  local comprehensive plan, the local infrastructure development
  302  plan, the capital improvements budget, or other governmental
  303  spending plan.
  305         (a) Before developing or operating the qualifying project,
  306  the private entity must enter into a comprehensive agreement
  307  with the responsible public entity. The comprehensive agreement
  308  must provide for:
  309         1. The delivery of performance and payment bonds, letters
  310  of credit, or other security acceptable to the responsible
  311  public entity in connection with the development or operation of
  312  the qualifying project in the form and amount satisfactory to
  313  the responsible public entity. For the components of the
  314  qualifying project which involve construction, the form and
  315  amount of the bonds must comply with s. 255.05.
  316         2. The review of the plans and specifications for the
  317  qualifying project by the responsible public entity and, if the
  318  plans and specifications conform to standards acceptable to the
  319  responsible public entity, the approval by the responsible
  320  public entity. This subparagraph does not require the private
  321  entity to complete the design of the qualifying project before
  322  the execution of the comprehensive agreement.
  323         3. The inspection of the qualifying project by the
  324  responsible public entity to ensure that the private entity’s
  325  activities are acceptable to the public entity in accordance
  326  with the comprehensive agreement.
  327         4. The maintenance of a policy of public liability
  328  insurance, a copy of which must be filed with the responsible
  329  public entity and accompanied by proofs of coverage, or self
  330  insurance, each in the form and amount satisfactory to the
  331  responsible public entity and reasonably sufficient to ensure
  332  coverage of tort liability to the public and employees and to
  333  enable the continued operation of the qualifying project.
  334         5. The monitoring by the responsible public entity of the
  335  maintenance practices to be performed by the private entity to
  336  ensure that the qualifying project is properly maintained.
  337         6. The periodic filing by the private entity of the
  338  appropriate financial statements that pertain to the qualifying
  339  project.
  340         7. The procedures that govern the rights and
  341  responsibilities of the responsible public entity and the
  342  private entity in the course of the construction and operation
  343  of the qualifying project and in the event of the termination of
  344  the comprehensive agreement or a material default by the private
  345  entity. The procedures must include conditions that govern the
  346  assumption of the duties and responsibilities of the private
  347  entity by an entity that funded, in whole or part, the
  348  qualifying project or by the responsible public entity, and must
  349  provide for the transfer or purchase of property or other
  350  interests of the private entity by the responsible public
  351  entity.
  352         8. The fees, lease payments, or service payments. In
  353  negotiating user fees, the fees must be the same for persons
  354  using the facility under like conditions and must not materially
  355  discourage use of the qualifying project. The execution of the
  356  comprehensive agreement or a subsequent amendment is conclusive
  357  evidence that the fees, lease payments, or service payments
  358  provided for in the comprehensive agreement comply with this
  359  section. Fees or lease payments established in the comprehensive
  360  agreement as a source of revenue may be in addition to, or in
  361  lieu of, service payments.
  362         9. The duties of the private entity, including the terms
  363  and conditions that the responsible public entity determine
  364  serve the public purpose of this section.
  365         (b) The comprehensive agreement may include:
  366         1. An agreement by the responsible public entity to make
  367  grants or loans to the private entity from amounts received from
  368  the federal, state, or local government or any agency or
  369  instrumentality thereof.
  370         2. A provision under which each entity agrees to provide
  371  notice of default and cure rights for the benefit of the other
  372  entity, including, but not limited to, a provision regarding
  373  unavoidable delays.
  374         3. A provision that terminates the authority and duties of
  375  the private entity under this section and dedicates the
  376  qualifying project to the responsible public entity or, if the
  377  qualifying project was initially dedicated by an affected local
  378  jurisdiction, to the affected local jurisdiction for public use.
  379         (8) FEES.—An agreement entered into pursuant to this
  380  section may authorize the private entity to impose fees for the
  381  use of the facility. The following provisions apply to the
  382  agreement:
  383         (a) The responsible public entity may develop new
  384  facilities or increase capacity in existing facilities through
  385  agreements with public-private partnerships.
  386         (b) The public-private partnership agreement must ensure
  387  that the facility is properly operated, maintained, or improved
  388  in accordance with standards set forth in the comprehensive
  389  agreement.
  390         (c) The responsible public entity may lease existing fee
  391  for-use facilities through a public-private partnership
  392  agreement.
  393         (d) Any revenues must be regulated by the responsible
  394  public entity pursuant to the comprehensive agreement.
  395         (e) A negotiated portion of revenues from fee-generating
  396  uses must be returned to the public entity over the life of the
  397  agreement.
  398         (9)FINANCING.—
  399         (a) A private entity may enter into a private-source
  400  financing agreement between financing sources and the private
  401  entity. A financing agreement and any liens on the property or
  402  facility must be paid in full at the applicable closing that
  403  transfers ownership or operation of the facility to the
  404  responsible public entity at the conclusion of the term of the
  405  comprehensive agreement.
  406         (b) The responsible public entity may lend funds to private
  407  entities that construct projects containing facilities that are
  408  approved under this section.
  409         (c) The responsible public entity may use innovative
  410  finance techniques associated with a public-private partnership
  411  under this section, including, but not limited to, federal loans
  412  as provided in Titles 23 and 49 C.F.R., commercial bank loans,
  413  and hedges against inflation from commercial banks or other
  414  private sources. In addition, the responsible public entity may
  415  provide its own capital or operating budget to support a
  416  qualifying project. The budget may be from any legally
  417  permissible funding sources of the responsible public entity,
  418  including the proceeds of debt issuances. A responsible public
  419  entity may use the model financing agreement provided in s.
  420  489.145(6) for its financing of a facility owned by a
  421  responsible public entity. A financing agreement may not require
  422  the responsible public entity to indemnify the financing source,
  423  subject the responsible public entity’s facility to liens in
  424  violation of s. 11.066(5), or secure financing by the
  425  responsible public entity with a pledge of security interest,
  426  and any such provisions are void.
  427         (d) A responsible public entity shall appropriate on a
  428  priority basis as required by the comprehensive agreement a
  429  contractual payment obligation, annual or otherwise, and the
  430  required payment obligation must be appropriated before other
  431  noncontractual obligations of the responsible public entity.
  433         (a) The private entity shall:
  434         1. Develop or operate the qualifying project in a manner
  435  that is acceptable to the responsible public entity in
  436  accordance with the provisions of the comprehensive agreement.
  437         2. Maintain, or provide by contract for the maintenance or
  438  improvement of, the qualifying project if required by the
  439  comprehensive agreement.
  440         3. Cooperate with the responsible public entity in making
  441  best efforts to establish interconnection between the qualifying
  442  project and any other facility or infrastructure as requested by
  443  the responsible public entity.
  444         4. Comply with the comprehensive agreement and any lease or
  445  service contract.
  446         (b) Each private facility that is constructed pursuant to
  447  this section must comply with the requirements of federal,
  448  state, and local laws; state, regional, and local comprehensive
  449  plans; the responsible public entity’s rules, procedures, and
  450  standards for facilities; and any other conditions that the
  451  responsible public entity determines to be in the public’s best
  452  interest and that are included in the comprehensive agreement.
  453         (c) The responsible public entity may provide services to
  454  the private entity. An agreement for maintenance and other
  455  services entered into pursuant to this section must provide for
  456  full reimbursement for services rendered for qualifying
  457  projects.
  458         (d) A private entity of a qualifying project may provide
  459  additional services for the qualifying project to the public or
  460  to other private entities if the provision of additional
  461  services does not impair the private entity’s ability to meet
  462  its commitments to the responsible public entity pursuant to the
  463  comprehensive agreement.
  465  expiration or termination of a comprehensive agreement, the
  466  responsible public entity may use revenues from the qualifying
  467  project to pay current operation and maintenance costs of the
  468  qualifying project. If the private entity materially defaults
  469  under the comprehensive agreement, the compensation that is
  470  otherwise due to the private entity is payable to satisfy all
  471  financial obligations to investors and lenders on the qualifying
  472  project in the same way that is provided in the comprehensive
  473  agreement or any other agreement involving the qualifying
  474  project, if the costs of operating and maintaining the
  475  qualifying project are paid in the normal course. Revenues in
  476  excess of the costs for operation and maintenance costs may be
  477  paid to the investors and lenders to satisfy payment obligations
  478  under their respective agreements. A responsible public entity
  479  may terminate with cause and without prejudice a comprehensive
  480  agreement and may exercise any other rights or remedies that may
  481  be available to it. The full faith and credit of the responsible
  482  public entity may not be pledged to secure the financing of the
  483  private entity. The assumption of the development or operation
  484  of the qualifying project does not obligate the responsible
  485  public entity to pay any obligation of the private entity from
  486  sources other than revenues from the qualifying project unless
  487  stated otherwise in the comprehensive agreement.
  488         (12) SOVEREIGN IMMUNITY.—This section does not waive the
  489  sovereign immunity of the state, any responsible public entity,
  490  any affected local jurisdiction, or any officer or employee
  491  thereof with respect to participation in, or approval of, any
  492  part of a qualifying project or its operation, including, but
  493  not limited to, interconnection of the qualifying project with
  494  any other infrastructure or project. A county or municipality in
  495  which a qualifying project is located possesses sovereign
  496  immunity with respect to the project, including, but not limited
  497  to, its design, construction, and operation.
  498         (13) CONSTRUCTION.—This section shall be liberally
  499  construed to effectuate the purposes of this section.
  500         (a) This section does not limit any state agency or
  501  political subdivision of the state in the acquisition, design,
  502  or construction of a public project pursuant to other statutory
  503  authority.
  504         (b) Except as otherwise provided in this section, this
  505  section does not amend existing laws by granting additional
  506  powers to, or further restricting, a local governmental entity
  507  from regulating and entering into cooperative arrangements with
  508  the private sector for the planning, construction, or operation
  509  of a facility.
  510         (c) This section does not waive any requirement of s.
  511  287.055.
  512         Section 2. This act shall take effect July 1, 2013.