Florida Senate - 2014                              CS for SB 900
       
       
        
       By the Committee on Education; and Senator Latvala
       
       
       
       
       
       581-02471-14                                           2014900c1
    1                        A bill to be entitled                      
    2         An act relating to public-private partnerships;
    3         creating s. 1013.505, F.S.; providing definitions;
    4         providing legislative findings and intent relating to
    5         the construction or improvement by private entities of
    6         facilities or projects used predominantly for a public
    7         purpose; providing for partnerships between state
    8         universities and private entities; providing
    9         procurement procedures for a state university board of
   10         trustees, including proposals for a qualifying project
   11         and a comprehensive agreement for partnership
   12         transactions; providing requirements for project
   13         approval; providing project qualifications and
   14         process; providing requirements for interim and
   15         comprehensive agreements between a board of trustees
   16         and a private entity; providing for use fees;
   17         providing for various financing sources for projects;
   18         providing powers and duties of private entities;
   19         providing for expiration or termination of a
   20         comprehensive agreement; providing for the
   21         applicability of sovereign immunity for boards of
   22         trustees with respect to qualified projects; providing
   23         for construction of the act; providing an effective
   24         date.
   25          
   26  Be It Enacted by the Legislature of the State of Florida:
   27  
   28         Section 1. Section 1013.505, Florida Statutes, is created
   29  to read:
   30         1013.505 Public-private partnerships; state universities
   31  and private entities.—
   32         (1) DEFINITIONS.—As used in this section, the term:
   33         (a) “Board” means a state university board of trustees.
   34         (b) “Develop” means to plan, design, finance, lease,
   35  acquire, install, construct, or expand.
   36         (c) “Fees” means charges imposed by the private entity of a
   37  qualifying project for use of all or a portion of such
   38  qualifying project pursuant to a comprehensive agreement.
   39         (d) “Lease payment” means any form of payment, including a
   40  land lease, by a board to the private entity of a qualifying
   41  project for the use of the project.
   42         (e) “Material default” means a nonperformance of its duties
   43  by the private entity of a qualifying project which jeopardizes
   44  adequate service to the public from the project.
   45         (f) “Operate” means to finance, maintain, improve, equip,
   46  modify, or repair.
   47         (g) “Private entity” means a natural person, corporation,
   48  general partnership, limited liability company, limited
   49  partnership, joint venture, business trust, public-benefit
   50  corporation, nonprofit entity, or other private business entity.
   51         (h) “Proposal” means a plan for a qualifying project with
   52  detail beyond a conceptual level for which terms such as fixed
   53  costs, payment schedules, financing, deliverables, and project
   54  schedule are defined.
   55         (i) “Qualifying project” means a facility or project that
   56  serves a public educational, research, housing, parking,
   57  infrastructure, recreational, or cultural purpose and that is
   58  used or will be used by a state university or an improvement,
   59  including equipment, of a facility that will be principally used
   60  by a state university in serving the university’s core mission.
   61         (j) “Revenues” means the income, earnings, user fees, lease
   62  payments, or other service payments relating to the development
   63  or operation of a qualifying project, including, but not limited
   64  to, money received as grants or otherwise from the Federal
   65  Government, a public entity, or an agency or instrumentality
   66  thereof to fund the qualifying project, and gifts from private
   67  donors.
   68         (k) “Service contract” means a contract between a board and
   69  a private entity which defines the terms of the services to be
   70  provided with respect to a qualifying project.
   71         (2) LEGISLATIVE FINDINGS AND INTENT.—
   72         (a)1. The Legislature finds that there is a public need for
   73  the construction or improvement of facilities that are used
   74  predominantly for public purposes and that it is in the public’s
   75  interest to provide for the construction or improvement of such
   76  facilities.
   77         2. The Legislature also finds that:
   78         a. There is a public need for timely and cost-effective
   79  acquisition, design, construction, improvement, renovation,
   80  expansion, equipping, maintenance, operation, implementation,
   81  and installation of projects serving a public purpose, including
   82  educational and auxiliary facilities and projects within the
   83  state which serve a public need and purpose, and that such
   84  public need may not be wholly satisfied by existing procurement
   85  methods.
   86         b. There are inadequate resources to develop new
   87  educational and auxiliary facilities and projects for the
   88  benefit of residents of this state, and that a public-private
   89  partnership has demonstrated that it can meet the needs by
   90  improving the schedule for delivery, lowering the cost, and
   91  providing other benefits to the public.
   92         c. There may be state and federal tax incentives that
   93  promote partnerships between public and private entities to
   94  develop and operate qualifying projects.
   95         d. A procurement under this section serves the public
   96  purpose of this section if such procurement facilitates the
   97  timely development or operation of a qualifying project.
   98         (b) It is the intent of the Legislature to encourage
   99  investment in the state by private entities; to facilitate
  100  various bond financing mechanisms, private capital, and other
  101  funding sources for the development and operation of qualifying
  102  projects, including expansion and acceleration of such financing
  103  to meet the public need; and to provide the greatest possible
  104  flexibility to public and private entities contracting for the
  105  provision of public services.
  106         (3) PROCUREMENT PROCEDURES.—A board may receive unsolicited
  107  proposals or may solicit proposals for qualifying projects and
  108  may thereafter enter into an agreement with a private entity, or
  109  a consortium of private entities, to develop, improve, operate,
  110  own, or finance facilities. A copy of all proposals received by
  111  a board shall be submitted to the Board of Governors.
  112         (a) A board may establish a reasonable application fee for
  113  the submission of an unsolicited proposal under this section.
  114  The fee must be sufficient to pay the costs of evaluating the
  115  proposal. A board may engage the services of a private
  116  consultant to assist in the evaluation.
  117         (b) A board may request a proposal from private entities
  118  for a qualified project. If the board receives an unsolicited
  119  proposal for a qualified project and the board intends to enter
  120  into a comprehensive agreement for the project described in such
  121  unsolicited proposal, the board shall publish notice in a
  122  newspaper of general circulation at least once a week for 2
  123  weeks stating that the board has received a proposal and will
  124  accept other proposals for the same project. The timeframe
  125  within which the board may accept other proposals shall be
  126  determined on a project-by-project basis based upon the
  127  complexity of the project and the public benefit to be gained by
  128  allowing a longer or shorter period of time within which other
  129  proposals may be received; however, the timeframe for allowing
  130  other proposals must be at least 21 days, but no more than 120
  131  days, after the initial date of publication.
  132         (c) A board may enter into a comprehensive agreement
  133  subject to approval by the Board of Governors and pursuant to
  134  guidelines adopted by the Board of Governors for public-private
  135  partnership transactions.
  136         (d) In considering proposals for a public-private
  137  partnership, the board shall determine whether the proposed
  138  project:
  139         1. Is in the public’s best interest.
  140         2. Is for a facility that is owned by the board or for a
  141  facility for which ownership will be conveyed to the board.
  142         3. Has adequate safeguards in place to ensure that
  143  additional costs or service disruptions are not imposed on the
  144  public in the event of material default or cancellation of the
  145  agreement by the board.
  146         4. Has adequate safeguards in place to ensure that the
  147  board or private entity has the opportunity to add capacity to
  148  the proposed project or other facilities serving similar
  149  predominantly public purposes.
  150         5. Will be owned by the board upon completion or
  151  termination of the agreement and upon payment of the amounts
  152  financed.
  153         6. Is supported by a reasonable finance plan that is
  154  consistent with subsection (9); the project cost; revenues by
  155  source; available financing; major assumptions; if governmental
  156  funds are assumed in order to deliver a cost-feasible project,
  157  internal rate of return on private investments; and a total
  158  cash-flow analysis beginning with the implementation of the
  159  project and extending for the term of the agreement.
  160         (e) In considering an unsolicited proposal, the board may
  161  require from the private entity a technical study prepared by a
  162  nationally recognized expert with experience in preparing
  163  analyses for bond rating agencies. In evaluating the technical
  164  study, the board may rely upon internal staff reports prepared
  165  by personnel familiar with the operation of similar facilities
  166  or the advice of external advisors or consultants who have
  167  relevant experience.
  168         (4) PROJECT APPROVAL REQUIREMENTS.—An unsolicited proposal
  169  from a private entity for approval of a qualifying project must
  170  be accompanied by the following material and information, unless
  171  waived by the board:
  172         (a) A description of the qualifying project, including the
  173  conceptual design of the facilities or a conceptual plan for the
  174  provision of services, and a schedule for the initiation and
  175  completion of the qualifying project.
  176         (b) If applicable, a description of the method by which the
  177  private entity proposes to secure the necessary property
  178  interests that are required for the qualifying project.
  179         (c) A description of the private entity’s general plans for
  180  financing the qualifying project, including the sources of the
  181  private entity’s funds and the identity of a dedicated revenue
  182  source or proposed debt or equity investment on behalf of the
  183  private entity.
  184         (d) The name and address of a person who may be contacted
  185  for additional information concerning the proposal.
  186         (e) The proposed user fees, lease payments, or other
  187  service payments over the term of a comprehensive agreement and
  188  the methodology for and circumstances that would allow changes
  189  to the user fees, lease payments, or other service payments over
  190  time.
  191         (f) Additional material or information that the board
  192  reasonably requests.
  193         (5) PROJECT QUALIFICATION AND PROCESS.—
  194         (a) The private entity must meet the minimum standards
  195  contained in the board’s regulations or guidelines for
  196  qualifying professional services and contracts for traditional
  197  procurement projects.
  198         (b) The board must:
  199         1. Ensure that provision is made for the private entity’s
  200  performance and payment of subcontractors, including, but not
  201  limited to, surety bonds, letters of credit, parent company
  202  guarantees, and lender and equity partner guarantees. For the
  203  components of the qualifying project which involve construction
  204  performance and payment, bonds are required and are subject to
  205  the recordation, notice, suit limitation, and other requirements
  206  of s. 255.05.
  207         2. Ensure the most efficient pricing of the security
  208  package that provides for the performance and payment of
  209  subcontractors.
  210         3. Ensure that provision is made for the transfer of the
  211  private entity’s obligations if the comprehensive agreement is
  212  terminated or a material default occurs.
  213         (c) After the public notification period has expired in the
  214  case of an unsolicited proposal, the board shall rank the
  215  proposals received in order of preference. In ranking the
  216  proposals, the board may consider factors including, but not
  217  limited to, professional qualifications, general business terms,
  218  innovative design techniques or cost-reduction terms, and
  219  finance plans. The board may then begin negotiations for a
  220  comprehensive agreement with the highest-ranked private entity.
  221  If the board is not satisfied with the results of the
  222  negotiations, the board may terminate negotiations with the
  223  private entity and negotiate with the second-ranked or
  224  subsequent-ranked private entities, in the order consistent with
  225  this procedure. If only one proposal is received, the board may
  226  negotiate in good faith, and if the board is not satisfied with
  227  the results of the negotiations, the board may terminate
  228  negotiations with the private entity. Notwithstanding this
  229  paragraph, the board may reject all proposals at any point in
  230  the process until a contract with the private entity is
  231  executed.
  232         (d) The board shall perform an independent analysis of the
  233  proposed public-private partnership which must demonstrate the
  234  cost-effectiveness and overall public benefit before the
  235  procurement process is initiated or before the contract is
  236  awarded.
  237         (e) The board may approve the development or operation of a
  238  qualifying project, or the design or equipping of a qualifying
  239  project that is developed or operated, if:
  240         1. There is a public need for or benefit derived from the
  241  type of qualifying project that the private entity proposes and
  242  the project is included in the university’s master plan.
  243         2. The estimated cost of the qualifying project is
  244  reasonable in relation to similar facilities.
  245         3. The private entity’s plans will result in the timely
  246  acquisition, design, construction, improvement, renovation,
  247  expansion, equipping, maintenance, or operation of the
  248  qualifying project.
  249         (f) The board may charge a reasonable fee to cover the
  250  costs of processing, reviewing, and evaluating the proposal,
  251  including, but not limited to, reasonable attorney fees and fees
  252  for financial and technical advisors or consultants and for
  253  other necessary advisors or consultants.
  254         (g) Upon approval of a qualifying project, the board shall
  255  establish a date for the commencement of activities related to
  256  the qualifying project. The board may extend the commencement
  257  date.
  258         (h) Approval of a qualifying project by the board is
  259  subject to entering into a comprehensive agreement with the
  260  private entity.
  261         (6) INTERIM AGREEMENT.—Before or in connection with the
  262  negotiation of a comprehensive agreement, the board may enter
  263  into an interim agreement with the private entity proposing the
  264  development or operation of the qualifying project. An interim
  265  agreement does not obligate the board to enter into a
  266  comprehensive agreement. The interim agreement is discretionary
  267  with the parties and is not required for a qualifying project
  268  for which the parties proceed directly to a comprehensive
  269  agreement. An interim agreement must be limited to provisions
  270  that:
  271         (a) Authorize the private entity to commence activities for
  272  which it may be compensated related to the proposed qualifying
  273  project, including, but not limited to, project planning and
  274  development, design, environmental analysis and mitigation,
  275  survey, other activities concerning any part of the proposed
  276  qualifying project, and ascertaining the availability of
  277  financing for the proposed facility or facilities.
  278         (b) Establish the process and timing of the negotiation of
  279  the comprehensive agreement.
  280         (c) Contain such other provisions related to an aspect of
  281  the development or operation of a qualifying project which the
  282  board and the private entity deem appropriate.
  283         (7) COMPREHENSIVE AGREEMENT.—
  284         (a) Before developing or operating the qualifying project,
  285  the private entity must enter into a comprehensive agreement
  286  with the board. The comprehensive agreement must provide for:
  287         1. Delivery of performance and payment bonds, letters of
  288  credit, or other security acceptable to the board in connection
  289  with the development or operation of the qualifying project in
  290  the form and amount satisfactory to the board. For the
  291  components of the qualifying project which involve construction,
  292  the form and amount of the bonds must comply with s. 255.05.
  293         2. Review of the design for the qualifying project by the
  294  board and, if the design conforms to standards acceptable to the
  295  board, the approval of the board. This subparagraph does not
  296  require the private entity to complete the design of the
  297  qualifying project before the execution of the comprehensive
  298  agreement.
  299         3. Inspection of the qualifying project by the board to
  300  ensure that the private entity’s activities are acceptable to
  301  the board in accordance with the comprehensive agreement.
  302         4. Maintenance of a policy of public liability insurance, a
  303  copy of which must be filed with the board and accompanied by
  304  proofs of coverage, or self-insurance, each in the form and
  305  amount satisfactory to the board and reasonably sufficient to
  306  ensure coverage of tort liability to the public and employees
  307  and to enable the continued operation of the qualifying project.
  308         5. Monitoring by the board of the maintenance practices to
  309  be performed by the private entity to ensure that the qualifying
  310  project is properly maintained.
  311         6. Periodic filing by the private entity of the appropriate
  312  financial statements that pertain to the qualifying project.
  313         7. Procedures that govern the rights and responsibilities
  314  of the board and the private entity in the course of the
  315  development, construction, and operation of the qualifying
  316  project and in the event of the termination of the comprehensive
  317  agreement or a material default by the private entity. The
  318  procedures must include conditions that govern the assumption of
  319  the duties and responsibilities of the private entity by an
  320  entity that funded, in whole or part, the qualifying project or
  321  by the board and must provide for the transfer or purchase of
  322  property or other interests of the private entity by the board.
  323         8. Agreement on negotiated user fees. Such fees must be the
  324  same for persons using the facility under like conditions and
  325  must not materially discourage use of the qualifying project.
  326  The execution of the comprehensive agreement or a subsequent
  327  amendment is conclusive evidence that the fees, lease payments,
  328  or service payments provided for in the comprehensive agreement
  329  comply with this section. Fees or lease payments established in
  330  the comprehensive agreement as a source of revenue may be in
  331  addition to, or in lieu of, service payments.
  332         9. Duties of the private entity, including the terms and
  333  conditions that the board determines serve the public purpose of
  334  this section.
  335         (b) The comprehensive agreement may include:
  336         1. An agreement by the board to make grants or loans to the
  337  private entity from amounts received from federal, state, or
  338  local government, or an agency or instrumentality thereof, or
  339  private donors.
  340         2. A provision under which each entity agrees to provide
  341  notice of default and cure rights for the benefit of the other
  342  entity, including, but not limited to, a provision regarding
  343  unavoidable delays.
  344         3. A provision that terminates the authority and duties of
  345  the private entity under this section and dedicates the
  346  qualifying project to the board.
  347         (8) FEES.—An agreement entered into pursuant to this
  348  section may authorize the private entity to impose fees on
  349  members of the public for the use of the facility. The following
  350  provisions apply to the agreement:
  351         (a) The board may develop new facilities or increase
  352  capacity in existing facilities through agreements with public
  353  private partnerships.
  354         (b) The public-private partnership agreement must ensure
  355  that the facility is properly operated, maintained, or improved
  356  in accordance with standards set forth in the comprehensive
  357  agreement.
  358         (c) The board may lease new facilities or existing fee-for
  359  use facilities through a public-private partnership agreement.
  360         (d) All revenues must be regulated by the board pursuant to
  361  the comprehensive agreement.
  362         (e) A negotiated portion of revenues from fee-generating
  363  uses must be returned to the board over the life of the
  364  agreement.
  365         (9) FINANCING.—
  366         (a) A private entity may enter into a private-source
  367  financing agreement between financing sources and the private
  368  entity. A financing agreement and any liens on the property or
  369  facility must be paid in full at the applicable closing that
  370  transfers ownership or operation of the facility to the board at
  371  the conclusion of the term of the comprehensive agreement.
  372         (b) The board may use innovative finance techniques
  373  associated with a public-private partnership under this section,
  374  including, but not limited to, federal loans as provided in
  375  Titles 23 and 49 C.F.R., commercial bank loans, and hedges
  376  against inflation from commercial banks or other private
  377  sources. In addition, the board may provide its own capital or
  378  operating budget to support a qualifying project. The budget may
  379  be from any legally permissible funding sources of the board,
  380  including the proceeds of debt issuances. A financing agreement
  381  may not subject the board’s facility to liens in violation of s.
  382  11.066(5).
  383         (10) POWERS AND DUTIES OF THE PRIVATE ENTITY.—
  384         (a) The private entity shall:
  385         1. Develop or operate the qualifying project in a manner
  386  that is acceptable to the board in accordance with the
  387  provisions of the comprehensive agreement.
  388         2. Maintain, or provide by contract for the maintenance or
  389  improvement of, the qualifying project if required by the
  390  comprehensive agreement.
  391         3. Cooperate with the board in making best efforts to
  392  establish interconnection between the qualifying project and any
  393  other facility or infrastructure as requested by the board in
  394  accordance with the comprehensive agreement.
  395         4. Comply with the comprehensive agreement and a lease or
  396  service contract.
  397         (b) Each private facility that is constructed pursuant to
  398  this section must comply with the requirements of federal,
  399  state, and local laws; state, regional, and local comprehensive
  400  plans; board rules, regulations, procedures, and facility
  401  standards; and such other conditions that the board determines
  402  to be in the public’s best interest and that are included in the
  403  comprehensive agreement.
  404         (c) The board may provide services to the private entity.
  405  An agreement for maintenance and other services entered into
  406  pursuant to this section must provide for full reimbursement for
  407  services rendered for qualifying projects.
  408         (d) A private entity of a qualifying project may provide
  409  additional services for the qualifying project to the public or
  410  to other private entities if the provision of additional
  411  services does not impair the private entity’s ability to meet
  412  its commitments to the board pursuant to the comprehensive
  413  agreement.
  414         (11) EXPIRATION OR TERMINATION OF AGREEMENTS.—Upon the
  415  expiration or termination of a comprehensive agreement, the
  416  board may use revenues from the qualifying project to pay
  417  current operation and maintenance costs of the qualifying
  418  project. If the private entity materially defaults under the
  419  comprehensive agreement, the compensation that is otherwise due
  420  to the private entity is payable to satisfy all financial
  421  obligations to investors and lenders on the qualifying project
  422  in the same way that is provided in the comprehensive agreement
  423  or any other agreement involving the qualifying project, if the
  424  costs of operating, maintaining, and improving the qualifying
  425  project are paid in the normal course. Revenues in excess of the
  426  costs for operation and maintenance costs may be paid to the
  427  investors and lenders to satisfy payment obligations under their
  428  respective agreements. A board may terminate with cause and
  429  without prejudice a comprehensive agreement and may exercise
  430  other rights or remedies that may be available to it in
  431  accordance with the provisions of the comprehensive agreement.
  432  The full faith and credit of the board may not be pledged to
  433  secure the financing of the private entity. The assumption of
  434  the development or operation of the qualifying project does not
  435  obligate the board to pay an obligation of the private entity
  436  from sources other than revenues from the qualifying project
  437  unless stated otherwise in the comprehensive agreement.
  438         (12) SOVEREIGN IMMUNITY.—This section does not waive the
  439  sovereign immunity of a board, or an officer or employee
  440  thereof, with respect to participation in, or approval of, any
  441  part of a qualifying project or its operation, including, but
  442  not limited to, interconnection of the qualifying project with
  443  any other infrastructure or project.
  444         (13) CONSTRUCTION.—This section shall be liberally
  445  construed to effectuate the purposes of this section, which
  446  shall be construed as cumulative and supplemental to any other
  447  authority or power vested in or exercised by a board. This
  448  section does not affect an agreement or existing relationship
  449  with a supporting organization involving a board in effect as of
  450  January 1, 2014.
  451         (a) Except as otherwise provided in this section, this
  452  section does not amend existing laws by granting additional
  453  powers to, or further restricting, a board from regulating and
  454  entering into cooperative arrangements with the private sector
  455  for the development, construction, or operation of a facility.
  456         (b) This section does not waive any requirement in s.
  457  255.103, s. 287.055, or s. 1013.45, if applicable.
  458         Section 2. This act shall take effect July 1, 2014.