SF 1629

as introduced - 89th Legislature (2015 - 2016) Posted on 03/12/2015 09:08am

A bill for an act
relating to state government; adopting public-private partnership agreements
concerning public buildings and public infrastructure; authorizing rulemaking;
proposing coding for new law in Minnesota Statutes, chapter 446.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1. new text begin PUBLIC PURPOSE.
new text end

new text begin The legislature makes the following findings:
new text end

new text begin (1) It is important for the economic, social, and environmental well-being of the
state that the people of the state have adequate access to quality public buildings and
public infrastructure. Providing for private sector entities to enter into traditional as
well as innovative agreements with the public sector to undertake the study, planning,
design, construction, reconstruction, renovation, improvement, financing, operation, and
maintenance of public buildings and infrastructure, including but not limited to facilities
and improvements related to transportation, water, wastewater, and appurtenances thereto,
will enhance the ability of the state to achieve these objectives.
new text end

new text begin (2) The authorization of public-private agreements will:
new text end

new text begin (i) provide the public sector with increased access to private sector efficiencies
and expertise;
new text end

new text begin (ii) facilitate collaboration and cooperation between the public and private sectors;
new text end

new text begin (iii) allow the sharing of costs and risks associated with public building and public
infrastructure projects currently authorized by law;
new text end

new text begin (iv) bring the innovative strengths of the private sector to bear on public building
and public infrastructure needs within the state;
new text end

new text begin (v) reduce the public costs of project design, delivery, operation, or maintenance
for eligible facilities;
new text end

new text begin (vi) accelerate the delivery of eligible facilities already authorized for the public
sector to design, build, operate, and maintain;
new text end

new text begin (vii) encourage life cycle efficiencies in public building and public infrastructure
projects;
new text end

new text begin (viii) foster flexibility in procurement methods to ensure the best value to the public;
new text end

new text begin (ix) create jobs; and
new text end

new text begin (x) allow for better use and leverage of public resources, thereby increasing private
investment in public buildings and public infrastructure and enhancing capital formation
for large projects, ultimately providing savings to taxpayers.
new text end

Sec. 2.

new text begin [446.11] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin The definitions in this section apply to sections 446.11
to 446.19.
new text end

new text begin Subd. 2. new text end

new text begin Develop or development. new text end

new text begin "Develop" or "development" means (1)
delivery, design, construction, reconstruction, improvement, acquisition, installation,
financing, operation, or maintenance, and may include any other services related to any of
the foregoing; or (2) studying or planning for any of the activities described in clause (1).
new text end

new text begin Subd. 3. new text end

new text begin Eligible facility. new text end

new text begin "Eligible facility" means a public building or public
infrastructure authorized elsewhere in state law for a public sponsor to deliver, design,
construct, reconstruct, improve, acquire, install, finance, operate, or maintain.
new text end

new text begin Subd. 4. new text end

new text begin Private partner. new text end

new text begin "Private partner" means a person, entity, or organization
that is not the state or federal government or any other public sponsor or any two or more
of the foregoing working together to develop one or more eligible facilities.
new text end

new text begin Subd. 5. new text end

new text begin Public building. new text end

new text begin "Public building" means any publicly owned existing,
enhanced, upgraded, or new structure or building, available for the general public or a
public sponsor, or a portion of such a structure or building, authorized elsewhere in law
for a public sponsor to deliver, design, construct, reconstruct, improve, acquire, install,
finance, operate, or maintain, and developed or to be developed in accordance with
sections 446.11 to 446.19, including but not limited to schools, hospitals, courthouses,
universities, research facilities, city halls, civic or convention centers, government service
facilities, police stations, correctional facilities, sports facilities, and housing facilities, and
buildings or structures relating to public infrastructure, together with all appurtenances
thereto. The appurtenances include but are not limited to associated equipment and
parking structures. Nothing in this definition shall extend a public sponsor's authority
to deliver, design, construct, reconstruct, improve, acquire, install, finance, operate, or
maintain a structure, building, or appurtenance not otherwise authorized by law.
new text end

new text begin Subd. 6. new text end

new text begin Public infrastructure. new text end

new text begin "Public infrastructure" means infrastructure that is
publicly owned and available for the general public or a public sponsor, including, but
not limited to, transportation infrastructure, energy infrastructure, water and wastewater
infrastructure, and appurtenances thereto. Nothing in this definition shall extend a public
sponsor's authority to deliver, design, construct, reconstruct, improve, acquire, install,
finance, operate, or maintain any infrastructure not otherwise authorized by law.
new text end

new text begin Subd. 7. new text end

new text begin Public-private agreement. new text end

new text begin "Public-private agreement" means an
agreement between a public sponsor and a private partner for the development of one or
more eligible facilities in accordance with sections 446.11 to 446.19.
new text end

new text begin Subd. 8. new text end

new text begin Public sponsor. new text end

new text begin "Public sponsor" means the state, any department or
agency of the state, counties, home rule charter or statutory cities, towns, school districts,
any authority established by a home rule charter or statutory city or county, any public
corporation established under state law, joint powers entity, any other political subdivision
of the state, or any two or more of the foregoing working together to develop one or
more eligible facilities.
new text end

Sec. 3.

new text begin [446.12] GENERAL AUTHORIZATIONS.
new text end

new text begin Pursuant to sections 446.11 to 446.19, a public sponsor is authorized to:
new text end

new text begin (1) consider and compare various methods to develop eligible facilities, including
methods that are alternatives to methods traditionally used by the public sponsor;
new text end

new text begin (2) enter into public-private agreements to develop one or more eligible facilities
with such durations or terms as determined in the public sponsor's discretion;
new text end

new text begin (3) enter into any agreements ancillary to public-private agreements, including:
new text end

new text begin (i) agreements with financial, legal, and other consultants and experts inside and
outside the public sector to (A) assist in the study, planning, design, procurement,
evaluation, and negotiation of public-private agreements, or (B) assist in the administration
of public-private agreements and the operation or maintenance of eligible facilities; and
new text end

new text begin (ii) agreements between the public sponsor and (A) the private partner, or (B) the
private partner's lenders;
new text end

new text begin (4) work together and contract with other public sponsors to develop eligible
facilities through public-private agreements;
new text end

new text begin (5) bundle two or more eligible facilities for delivery pursuant to one or more
public-private agreements;
new text end

new text begin (6) procure services, award agreements, administer revenues, appropriate funds, and
take such other action as may be required in connection with the development of eligible
facilities through public-private agreements; and
new text end

new text begin (7) adopt rules, regulations, or guidelines to implement and exercise the authority
granted to the public sponsor under sections 446.11 to 446.19.
new text end

Sec. 4.

new text begin [446.13] FUNDING AND FINANCING.
new text end

new text begin Subdivision 1. new text end

new text begin Authority. new text end

new text begin Any lawful source of existing public funding and
financing authority, or combination thereof, may be utilized for the development of an
eligible facility under sections 446.11 to 446.19.
new text end

new text begin Subd. 2. new text end

new text begin Financing. new text end

new text begin A public-private agreement may require the private partner
to arrange for all or a portion of the financing required for the eligible facility. Public
sponsors may elect in their discretion to participate with the private partner in any gains
realized through the refinancing of the eligible facility as determined by the public sponsor
in its discretion.
new text end

new text begin Subd. 3. new text end

new text begin Accepting funds. new text end

new text begin The public sponsor may accept from the United States,
any state, any of their respective agencies, or any regional or local governmental entity,
such funds or credit assistance as are available to it for carrying out the purposes of
sections 446.11 to 446.19, whether the funds are made available by grant, loan, guaranty,
line of credit, or other financing agreement. The public sponsor may enter into agreements
and other agreements with the United States, any state, any of their respective agencies, or
any regional or local governmental entity that may be necessary, proper, and convenient
for carrying out the purposes of sections 446.11 to 446.19.
new text end

new text begin Subd. 4. new text end

new text begin Accepting donations. new text end

new text begin The public sponsor may accept from any source any
grant, donation, gift, or other form of conveyance of land, money, other real or personal
property, services, or other things of value made to the public sponsor for carrying out
the purposes of sections 446.11 to 446.19.
new text end

new text begin Subd. 5. new text end

new text begin Imposing fees. new text end

new text begin Public sponsors may:
new text end

new text begin (1) impose, collect, increase, and enforce user fees, consumption charges, rents, or
similar charges from users of eligible facilities only as otherwise provided by law; and
new text end

new text begin (2) authorize a private partner or another public entity to impose, collect, increase,
and enforce fees, rents, and charges to the same extent available to the public sponsor. The
use, application, and sharing of collected fees, rents, and charges by the public sponsor or
the private partner shall be determined by the public sponsor.
new text end

Sec. 5.

new text begin [446.14] AD VALOREM AND PROPERTY TAXES.
new text end

new text begin Public buildings and public infrastructure developed, held by, or transferred to a
private partner under a public-private agreement shall be exempt from any and all state
and local ad valorem and property taxes that otherwise might be applicable. This section
does not apply to leases by the public sponsor to individuals or families for residential use.
new text end

Sec. 6.

new text begin [446.15] PROCUREMENT PROCESS.
new text end

new text begin Subdivision 1. new text end

new text begin Procurement methods. new text end

new text begin Notwithstanding sections 16B.31, 16B.33,
16C.06, 16C.08, 16C.087, 16C.16 to 16C.20, 16C.251 to 16C.35, and 471.345, the
public sponsor may use any procurement methods and processes that the public sponsor
determines are appropriate to solicit private parties and award public-private agreements
pursuant to sections 446.11 to 446.19, including, but not limited to, any of the following
or combination of the following:
new text end

new text begin (1) calls for project proposals, whereby the public sponsor describes the eligible
facilities that private parties are invited to submit proposals to develop; and
new text end

new text begin (2) competitive solicitations using requests for qualifications, short-listing of
qualified proposers, requests for proposals, preproposal meetings with individual
short-listed proposers, and revised proposals.
new text end

new text begin Subd. 2. new text end

new text begin Unsolicited proposals. new text end

new text begin The public sponsor may also receive unsolicited
proposals; however, if the public sponsor determines there is sufficient merit to pursue
any unsolicited proposal, reasonable opportunity for other entities to submit competing
proposals for consideration and possible contract award must be provided. The public
sponsor may negotiate with private proposers prior to award.
new text end

new text begin Subd. 3. new text end

new text begin Factors. new text end

new text begin For any procurement in which the public sponsor issues a request
for qualifications, request for proposals, or similar solicitation document, the request shall
set forth the factors that the public sponsor will evaluate when reviewing the submittals.
The public sponsor may determine which factors to consider and the relative weight of
such factors in the evaluation process to obtain the best value for the public sponsor.
new text end

new text begin Subd. 4. new text end

new text begin Payments. new text end

new text begin The public sponsor is authorized to pay stipends or payments
for work product on terms and conditions and in amounts determined by the public
sponsor in any circumstances that the public sponsor determines to be appropriate,
including, but not limited to, the following circumstances: (1) to one or more short-listed
proposers if the public sponsor cancels the procurement prior to the due date for proposals
in the request for proposals; (2) to one or more unsuccessful proposers that submit a
proposal provided that the public sponsor determines that the proposal is responsive to
the public sponsor's request for proposals and meets all requirements established by the
public sponsor for the project; or (3) to the selected proposer if the public sponsor cancels
the project after selection of the proposer.
new text end

new text begin Subd. 5. new text end

new text begin Work product in exchange for payment. new text end

new text begin (a) In exchange for a stipend
or payment for work product under subdivision 4, the public sponsor may require the
proposer to grant to the public sponsor the right to use any work product contained in
the proposer's proposal.
new text end

new text begin (b) For purposes of this subdivision, "work product" means any technical or financial
concepts: (1) included in a proposer's proposal or any portion of the proposal; (2)
submitted by the proposer for review by the public sponsor in accordance with the public
sponsor's request for proposals; or (3) raised by the proposer at one-on-one meetings
or alternative technical or financial concept meetings with the public sponsor prior to
the due date for proposals. "Work product" also includes any alternative technical or
financial concepts, ideas, innovation, technology, techniques, methods, processes, unique
uses of commercial items, design concepts, solutions, construction means and methods,
project execution approach, drawings, reports, plans and specifications, information, and
submittals that constitute intellectual property of the proposer.
new text end

new text begin Subd. 6. new text end

new text begin Deviations from technical specifications. new text end

new text begin The public sponsor may
identify in a request for qualifications, request for proposals, or other solicitation document
a process whereby proposers may request and receive authorization to deviate from
technical specifications on making a showing satisfactory to the public sponsor.
new text end

new text begin Subd. 7. new text end

new text begin Data practices. new text end

new text begin Proposals, submissions, qualifications, and other
communications submitted to a public sponsor in connection with a potential
public-private agreement shall be treated as data submitted to a government entity
pursuant to section 13.591.
new text end

new text begin Subd. 8. new text end

new text begin Other rights of public sponsor. new text end

new text begin Notwithstanding any other provision of
law, the public sponsor may, in its requests for qualifications, requests for proposals, or
similar solicitation documents: (1) provide exclusive protest remedies; (2) limit the rights
of private parties responding to such solicitation documents to protest matters arising
in connection with the procurement; and (3) require that private parties responding to
such solicitation documents expressly waive all other rights and remedies that may be
available under applicable law.
new text end

Sec. 7.

new text begin [446.16] PUBLIC-PRIVATE AGREEMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Permissible provisions. new text end

new text begin The public sponsor may include in a
public-private agreement any provision that the public sponsor determines is necessary or
appropriate, including, but not limited to, the provisions listed in subdivisions 2 to 17.
new text end

new text begin Subd. 2. new text end

new text begin Allocation of risks. new text end

new text begin The public sponsor may include provisions
addressing the allocation and management of project risks including design, construction,
geotechnical, delay, permitting, governmental approvals, change of law, change in utility
costs, operations and maintenance, force majeure, inflation, and financing risks.
new text end

new text begin Subd. 3. new text end

new text begin Payments and adjustments. new text end

new text begin The public sponsor may include provisions
providing that: (1) the public sponsor may pay the private partner for the development
services provided by the private partner by making periodic payments to the private
partner through the term of the public-private agreement or any portion of the term; (2)
the public sponsor's payments to the private partner may include milestone, progress,
substantial completion, or final acceptance payments; (3) the payments described in
clauses (1) and (2) may include compensation to the private partner for design costs,
construction costs, financing costs, operating costs, maintenance costs, the cost of utilities,
land acquisition costs, and any other project development costs, and may include a
rate of return on the private partner's investment determined to be appropriate by the
public sponsor, in its discretion; and (4) the payments described in clauses (1) and (2)
may be subject to adjustments where the private partner fails to achieve performance
specifications or standards or otherwise fails to comply with its obligations under the
public-private agreement. Notwithstanding anything in this subdivision to the contrary,
sections 446.11 to 446.19 do not authorize the public sponsor to impose or collect any user
fee, consumption charge, rent, or similar charge not otherwise authorized by law.
new text end

new text begin Subd. 4. new text end

new text begin Performance and payment security. new text end

new text begin The public sponsor may include
provisions requiring that the private partner or one or more of its prime contractors
provides performance and payment security. Notwithstanding any other provision of state
law, the penal sum or amount of this security may be less than the contract price involved,
based on the public sponsor's determination on a project-by-project basis of what is
required or desirable to adequately protect the public interest and adequately assure
payment of persons and amounts provided for in sections 446.11 to 446.19. Performance
and payment security, if required, may be in the form of bonds, guarantees, letters of
credit, or any other type of financial instrument, or any combination of the foregoing, as
determined by the public sponsor.
new text end

new text begin Subd. 5. new text end

new text begin Lands. new text end

new text begin The public sponsor may include provisions requiring that either the
public sponsor or the private partner acquire the lands and other property interests required
for the development of the eligible facility, and either the public sponsor or the private
partner hold title to, or lease or lease back, the lands and the eligible facility through
the term of the public-private agreement.
new text end

new text begin Subd. 6. new text end

new text begin Utilities. new text end

new text begin The public sponsor may include provisions requiring that either
the public sponsor or the private partner provide the utilities required during construction
and operation of the eligible facility, subject to Minnesota Rules, part 7819.3100, subparts
1 and 2.
new text end

new text begin Subd. 7. new text end

new text begin Dispute resolution. new text end

new text begin The public sponsor may include provisions requiring
the use of arbitration or other alternative dispute resolution procedures to resolve disputes
between the public sponsor and the private partner. Such alternative dispute resolution
procedures may include but are not limited to binding or nonbinding process, arbitration
or mediation, the establishment of a board to hear disputes, or a court proceeding.
new text end

new text begin Subd. 8. new text end

new text begin Occupancy readiness. new text end

new text begin The public sponsor may include provisions
establishing criteria for commissioning the eligible facility and determining occupancy
readiness.
new text end

new text begin Subd. 9. new text end

new text begin Use of eligible facility. new text end

new text begin The public sponsor may include provisions
addressing the public sponsor's requirements for programming, operations, use and change
in use of the eligible facility, and flexibility to expand the eligible facility.
new text end

new text begin Subd. 10. new text end

new text begin Facilities management services. new text end

new text begin The public sponsor may include
provisions addressing the facilities management services, including maintenance and
renewal, to be provided by the private partner, the public sponsor, or third parties.
new text end

new text begin Subd. 11. new text end

new text begin End of agreement. new text end

new text begin The public sponsor may include provisions
addressing responsibility for maintenance and rehabilitation in order for an eligible facility
to meet the standards determined by the public sponsor, in its discretion, at the end of
the term of the public-private agreement.
new text end

new text begin Subd. 12. new text end

new text begin Termination payments. new text end

new text begin The public sponsor may include provisions
providing for compensation of the private partner upon early termination of the
public-private agreement, including, but not limited to, termination by the public sponsor
for its convenience, or termination by default of either the public sponsor or the private
partner. If provisions as described in this subdivision are included in the public-private
agreement, compensation on termination amounts and formulas shall be determined by
the public sponsor.
new text end

new text begin Subd. 13. new text end

new text begin Defaults and remedies. new text end

new text begin The public sponsor may include provisions
specifying events of default and remedies available to the private partner and the public
sponsor.
new text end

new text begin Subd. 14. new text end

new text begin Technical standards and specifications. new text end

new text begin The public sponsor may include
provisions setting forth the technical standards and specifications with which the private
partner must comply, including but not limited to performance standards and output
specifications, together with provisions allowing the public sponsor to enforce, amend, or
waive such technical standards and specifications.
new text end

new text begin Subd. 15. new text end

new text begin Insurance. new text end

new text begin The public sponsor may include provisions requiring that
the private partner obtain and maintain insurance with coverage and deductibles that the
public sponsor determines are appropriate.
new text end

new text begin Subd. 16. new text end

new text begin Indemnification. new text end

new text begin The public sponsor may include provisions providing
indemnification to the public sponsor.
new text end

new text begin Subd. 17. new text end

new text begin Books and records. new text end

new text begin The public sponsor may include provisions regarding
the maintenance and auditing of the private partner's books and records.
new text end

Sec. 8.

new text begin [446.17] EXISTING AUTHORITY.
new text end

new text begin The authority granted under sections 446.11 to 446.19 supplements and is
independent of any existing authority. It does not limit or detract from existing authority
and does not affect application of environmental, health, safety, labor, or land use laws.
new text end

Sec. 9.

new text begin [446.18] BUSINESS SUBSIDIES.
new text end

new text begin Any consideration received by a private partner pursuant to sections 446.11 to
446.19 is not a business subsidy under section 116J.993.
new text end

Sec. 10.

new text begin [446.19] SEVERABILITY.
new text end

new text begin If any provision of sections 446.11 to 446.19, or the application thereof to any
person or circumstance, is found to be invalid, the remaining sections are valid.
new text end