HF 3698

as introduced - 90th Legislature (2017 - 2018) Posted on 03/12/2018 02:25pm

A bill for an act
relating to infrastructure development; authorizing public-private partnerships for
certain infrastructure projects; proposing coding for new law as Minnesota Statutes,
chapter 16F.

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

Section 1.

new text begin [16F.01] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Applicability. new text end

new text begin For purposes of this chapter, the following terms have the
meanings given them unless context clearly indicates otherwise.
new text end

new text begin Subd. 2. new text end

new text begin Affected jurisdiction. new text end

new text begin "Affected jurisdiction" means any political subdivision
in which all or a portion of a project is located.
new text end

new text begin Subd. 3. new text end

new text begin Comprehensive agreement. new text end

new text begin "Comprehensive agreement" means the contractual
agreement between the private entity and the governmental entity.
new text end

new text begin Subd. 4. new text end

new text begin Governmental entity. new text end

new text begin "Governmental entity" means:
new text end

new text begin (1) a board, commission, department, or other agency of the state; and
new text end

new text begin (2) a political subdivision of the state that elects, by adoption of a resolution by the
political subdivision's governing body, to operate under this chapter.
new text end

new text begin Subd. 5. new text end

new text begin Lease payment. new text end

new text begin "Lease payment" means any form of payment, including a
land lease, by a governmental entity to the private entity for project use.
new text end

new text begin Subd. 6. new text end

new text begin Material default. new text end

new text begin "Material default" means any default by a private entity in
the performance of duties imposed under an interim agreement or comprehensive agreement
that jeopardizes adequate service to the public from a project.
new text end

new text begin Subd. 7. new text end

new text begin Private entity. new text end

new text begin "Private entity" means any individual person, corporation,
general partnership, limited liability company, limited partnership, joint venture, business
trust, public benefit corporation, nonprofit entity, or other business entity.
new text end

new text begin Subd. 8. new text end

new text begin Project. new text end

new text begin "Project" means a proposed or executed public-private partnership for
an infrastructure project, including but not limited to public transportation infrastructure,
roads, highways, bridges, waste water transportation and waste water treatment facilities,
water treatment and water transportation facilities, rail facilities, soil and water conservation
facilities, land and ecology conservation facilities, education facilities, governmental
facilities, public works, oil and gas pipeline, medical facilities, port facilities, cultural
facilities, technology infrastructure and facilities, public housing, or other public
infrastructure.
new text end

new text begin Subd. 9. new text end

new text begin Property. new text end

new text begin "Property" means any matter or thing capable of public or private
ownership.
new text end

new text begin Subd. 10. new text end

new text begin Proposer. new text end

new text begin "Proposer" means a private entity that submits a proposal to a
responsible governmental entity or affected jurisdiction.
new text end

new text begin Subd. 11. new text end

new text begin Revenue. new text end

new text begin "Revenue" means all revenue, income, earnings, user fees, lease
payments, or other service payments that arise out of or in connection with the development
or operation of a qualifying project, including money received as a grant or otherwise from
the federal government, a governmental entity, or any agency or instrumentality of the
federal government or governmental entity in aid of a project.
new text end

new text begin Subd. 12. new text end

new text begin User fee. new text end

new text begin "User fee" means a rate, fee, or other charge imposed by a private
entity for the use of all or part of a project under a comprehensive agreement.
new text end

Sec. 2.

new text begin [16F.02] APPROVAL REQUIRED.
new text end

new text begin (a) A private entity is prohibited from designing, building, constructing, financing,
operating, or maintaining a project unless:
new text end

new text begin (1) the governmental entity has complied with all of the requirements of this chapter;
and
new text end

new text begin (2) the private entity has entered into a valid comprehensive agreement with the
governmental entity, subject to all of the requirements of this chapter.
new text end

new text begin (b) Before using this chapter to procure a particular project, the governmental entity
must approve by official action that the governmental entity will comply with this chapter.
In the absence of approval by official action under this section, the procurement is governed
by existing applicable law.
new text end

new text begin (c) If a project involves multiple affected jurisdictions, the governmental entities may
establish a joint powers board under section 471.59. For purposes of a joint powers board
project, the joint powers board is the governmental entity subject to the requirements of this
chapter.
new text end

Sec. 3.

new text begin [16F.03] PROJECT REQUIREMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Compliance required. new text end

new text begin After approval to operate under section 16F.02
and before approving solicitation of competitive proposals for a project under this chapter,
the governmental entity must comply with this section.
new text end

new text begin Subd. 2. new text end

new text begin Feasibility study. new text end

new text begin (a) For each project the governmental entity seeks to procure
using this chapter, the governmental entity must conduct a study analyzing the project's
feasibility and impacts.
new text end

new text begin (b) The feasibility and impact study must investigate:
new text end

new text begin (1) the public need for the project;
new text end

new text begin (2) the anticipated scope and cost of the project;
new text end

new text begin (3) the financial, social, cultural, ecological, environmental, legal, and economic impacts
of the project to the public and all affected jurisdictions;
new text end

new text begin (4) the additional public benefit and value generated by procuring the project under this
chapter compared to the public benefit and value generated if the project was procured using
traditional public procurement methods;
new text end

new text begin (5) the cost savings or additional costs associated with using private financing in lieu of
traditional public financing;
new text end

new text begin (6) the risks and rewards associated with procuring the project under this chapter and
the risks associated with procuring the project using traditional procurement methods;
new text end

new text begin (7) the time savings or additional time associated with procurement of the project under
this chapter in lieu of traditional procurement methods; and
new text end

new text begin (8) other criteria that the governmental entity requires to analyze the feasibility and
impacts of the project.
new text end

new text begin (c) The results of the feasibility and impact study must be published on the governmental
entity's Web site in a written feasibility report.
new text end

new text begin (d) The governmental entity may elect to conduct additional feasibility and impact
studies.
new text end

new text begin Subd. 3. new text end

new text begin Consultant use. new text end

new text begin (a) Any private consultants retained by the governmental entity
to assist with any part of the feasibility and impact study must be selected and engaged
based on an advertised and open competitive process. The governmental entity must solicit
the services of private consultants through an advertised request for proposal that states the
qualifications, experience, and services sought for the feasibility and impact study. The
solicitation must encourage participation by local private entities or consultants, and must
also encourage the disadvantaged business enterprise participation consistent with the goals
established by the governmental entity.
new text end

new text begin (b) The private consultants providing the best combination of appropriate qualifications,
local participation, disadvantaged business enterprise participation, experience, pricing, and
availability must be selected. For the first ten years after the effective date of this chapter,
a governmental entity is prohibited from considering a private consultant's prior experience
in public-private partnerships in other states when selecting private consultants to provide
services in connection with any portion of the feasibility and impact study.
new text end

new text begin (c) A private consultant or employee of the governmental entity that participated in the
feasibility and impact study is prohibited from being employed by a private entity seeking
or entering into the comprehensive agreement with the governmental entity. A private
consultant engaged to assist the governmental entity to prepare the feasibility and impact
study may be retained by the governmental entity to provide services in connection with
the preparation of the request for proposals and the proposal evaluation process, or in
connection with the negotiation and administration of the comprehensive agreement between
the private entity and the governmental entity for the project.
new text end

new text begin Subd. 4. new text end

new text begin Public hearing. new text end

new text begin (a) After the feasibility study is complete, the governmental
entity must hold a public hearing on the results of the feasibility study and to take into
consideration public comment on the qualifying project. The governmental entity may elect
hold additional public hearings.
new text end

new text begin (b) If supplemental feasibility and impact studies are conducted, one public hearing on
the results of such supplemental feasibility and impact studies shall be held to take into
consideration public comment on the qualifying project.
new text end

new text begin Subd. 5. new text end

new text begin Request for proposals; solicitation. new text end

new text begin (a) A governmental entity is prohibited
from entering into a comprehensive agreement for a project under this chapter unless the
governmental entity complies with this section. A governmental entity may, by official
action, authorize a request for proposals to be prepared and execution of a competitive
process for the project, as set forth under section 16F.04.
new text end

new text begin (b) Before soliciting proposals, the governmental entity must identify all permits of any
kind required in connection with the project, including but not limited to environmental,
wastewater, building, or other permits. All permits must be identified in the feasibility study,
which must also provide information regarding when such permits must be obtained. All
permits must be obtained as required by applicable law.
new text end

Sec. 4.

new text begin [16F.04] REQUEST FOR PROPOSALS; COMPETITIVE PROCESS.
new text end

new text begin Subdivision 1. new text end

new text begin Consultant use. new text end

new text begin (a) The governmental entity may engage one or more
private consultants to assist with the request for proposals preparation and the proposal
evaluation process. The private consultants used may include but are not limited to architects,
engineers, attorneys, and financial consultants. Any consultant hired must be duly licensed
in Minnesota.
new text end

new text begin (b) A private consultant retained by the governmental entity to assist with any part of
the request for proposal preparation or the proposal evaluation process must be evaluated,
selected, and engaged based on an advertised and open competitive process. The
governmental entity must solicit the services of private consultants through an advertised
request for proposal that states the qualifications, experience, and services sought in
connection with the preparation of the request for proposals. The solicitation must encourage
participation by local entities or consultants and must also encourage disadvantaged business
enterprises participation consistent with the goals established by the governmental entity.
new text end

new text begin (c) The governmental entity must select the private consultant or consultants that provides
the best combination of appropriate qualifications, local participation, disadvantaged business
enterprise participation, experience, pricing, and availability. For the first ten years after
the effective date of this chapter, a governmental entity is prohibited from considering a
private consultant's prior experience with public-private partnerships in other states when
selecting private consultants to provide services in connection with request for proposal
preparation or the proposal evaluation process.
new text end

new text begin (d) A private consultant or governmental entity employee that participated in request
for proposals preparation is prohibited from being employed by a private entity seeking or
entering into the comprehensive agreement with the governmental entity. A private consultant
engaged to assist the governmental entity with the request for proposal preparation or the
proposal evaluation process may be retained by the governmental entity to provide services
to the governmental entity in connection with negotiation and administration of the
comprehensive agreement between the private entity and the governmental entity for the
project.
new text end

new text begin Subd. 2. new text end

new text begin Request for proposals; requirements. new text end

new text begin Each request for proposals must include:
new text end

new text begin (1) a description of the major programmatic and scope elements of the project;
new text end

new text begin (2) the technical requirements, performance requirements, and goals to be met by the
project, expressed affirmatively and in terms of adverse effects to be avoided;
new text end

new text begin (3) the governmental entity's schedule goals for the project, including any contemplated
major milestones for the completion of design and construction of the project, major design
and construction phases, and the minimum duration of any required operation and
maintenance services;
new text end

new text begin (4) preliminary conceptual drawings, specifications, and other preliminary design
information that illustrates the qualifying project's desired attributes;
new text end

new text begin (5) the proposed comprehensive agreement providing the design, construction, financing,
and, where applicable, the operation and maintenance of the project, to be entered into by
the governmental entity and the private entity;
new text end

new text begin (6) the bid bond, performance bonds, and payment bonds the successful proposer must
execute as a condition of entering into the comprehensive agreement. Bid bonds are required
to secure a proposer's proposal for a period of 120 days;
new text end

new text begin (7) any proposed additional documents related to additional security the successful
proposer must provide as a condition of entering into the comprehensive agreement;
new text end

new text begin (8) the governmental entity's initial budget estimates for the project, including known
revenue sources, appropriations available to the governmental entity at the time of the
proposal, potential future appropriation risks, a financial plan, proposed key financial terms,
and desired financing terms;
new text end

new text begin (9) the qualifications and skill sets sought from the proposer, including the qualifications
of any architects, engineers, and construction contractors engaged by the proposer to
participate in the comprehensive agreement;
new text end

new text begin (10) a statement that all private lenders providing financing for the project must be duly
authorized by the state of Minnesota, and are subject to and must comply with all laws and
regulations applicable to banking institutions in Minnesota;
new text end

new text begin (11) the due date by which proposers must provide the qualifications submittal for the
governmental entity to evaluate, which must be at least 60 days after the date the request
for proposals is published;
new text end

new text begin (12) the date by which the governmental entity must announce the short-listed proposers
selected to advance to proposal evaluation phase. The governmental entity is prohibited
from short-listing more than four proposers. If the proposal is an unsolicited proposal
submitted under section 16F.11, the proposer that submitted the unsolicited proposal must
be a short-listed proposer;
new text end

new text begin (13) the due date by which proposers must submit sealed proposals to the governmental
entity to evaluate under the criteria in the request for proposals. For projects with estimated
budgets up to $50,000,000, the due date must be at least three months after the short-listed
proposers are announced. For projects with estimated budgets greater than $50,000,000,
the due date must be at least nine months after the short-listed proposers are announced;
new text end

new text begin (14) the stipend paid to unsuccessful proposers for submitting a responsive proposal,
which must be at least one-half percent of the governmental entity's estimated budget for
the design and construction of the project. Each unsuccessful responsive proposal must
receive an equal share of the stipend. The successful proposer must apply for stipend payment
in the first payment application under the comprehensive agreement and must pay a pro
rata share to each unsuccessful proposer that submitted a responsive proposal. Each
unsuccessful proposer must pay equitable portions of the stipend to the architects, engineers,
contractors, and subcontractors that materially participated in the proposal process;
new text end

new text begin (15) the procedures to protect any confidential or proprietary information in the proposals,
and to return any confidential or proprietary information to unsuccessful proposers.
Information in a proposal relating to pricing, the cost of financing, or lending terms is not
confidential or proprietary;
new text end

new text begin (16) the criteria by which proposals will be evaluated; and
new text end

new text begin (17) the date by which the successful proposer must be announced or all proposals
rejected.
new text end

new text begin Subd. 3. new text end

new text begin Evaluation criteria. new text end

new text begin (a) The criteria used to evaluate proposals must be
objective, assigned numerical weights, and be reasonably designed to objectively compare
and evaluate proposals. Criteria that are not expressly listed in the request for proposals
must not be considered. Criteria related to personal characteristics of a proposer, such as
the proposer's prior experience with the governmental entity or the governmental entity's
private consultants on public-private partnership projects in states other than Minnesota
must not be used.
new text end

new text begin (b) The minimum criteria must include:
new text end

new text begin (1) the project's proposed cost, including the cost of the design, construction, and
financing components of the proposal and, where applicable, operating and maintenance
costs;
new text end

new text begin (2) the project's proposed design and construction quality, which must meet or exceed
all project goals and performance requirements specified in the request for proposal;
new text end

new text begin (3) the degree to which the proposal allows the governmental entity to take advantage
of available financing from federal, state, local, or other private funding sources;
new text end

new text begin (4) the proposer's plan to employ local architects, engineers, contractors, subcontractors,
and residents for the project;
new text end

new text begin (5) the proposer's plan to meet or make good faith efforts to meet the governmental
entity's established disadvantaged business enterprise goals;
new text end

new text begin (6) for a project that involves a continuing role beyond design, construction, and
financing, the private entity's proposed rate of return and revenue sharing opportunities;
new text end

new text begin (7) the proposer's safety record and safety plan;
new text end

new text begin (8) the financial stability and capacity of any private lender proposed to be used to
finance any portion of the design and construction of the project;
new text end

new text begin (9) the proposer's plan to mitigate risks and negative impacts identified in the feasibility
and impact study, and any other risks identified by the proposer;
new text end

new text begin (10) the nature and extent of the proposer's proposed modifications to the governmental
entity's proposed comprehensive agreement;
new text end

new text begin (11) the proposer's project schedule;
new text end

new text begin (12) the degree to which the private entity's proposal mitigates any of the project's adverse
social, cultural, ecological, environmental, legal, and economic impacts;
new text end

new text begin (13) any generated user fees, lease payments, or other revenue the proposer guarantees
upon successful completion of the project; and
new text end

new text begin (14) other objective criteria the governmental entity deems appropriate.
new text end

new text begin Subd. 4. new text end

new text begin Meetings. new text end

new text begin The governmental entity may conduct one or more confidential
meetings with each proposer during the request for proposals phase to discuss each proposer's
request for proposal documents. The governmental entity may also conduct interviews with
each team that submitted a compliant proposal. The sole purpose of an interview under this
subdivision is to facilitate the governmental entity's review of the proposals.
new text end

new text begin Subd. 5. new text end

new text begin Noncompliant proposals. new text end

new text begin The governmental entity must reject all nonresponsive
proposals. The governmental entity may request clarifications to remedy minor
nonconformities or discrepancies that do not otherwise affect the responsiveness of the
proposal.
new text end

new text begin Subd. 6. new text end

new text begin Fees. new text end

new text begin The responsible governmental entity may charge a reasonable fee to cover
the costs of processing, reviewing, and evaluating unsolicited proposals submitted under
section 16F.11. A fee charged under this subdivision may include reasonable legal fees and
fees for financial and technical consultants.
new text end

Sec. 5.

new text begin [16F.05] COMPREHENSIVE AGREEMENT REQUIREMENTS.
new text end

new text begin The comprehensive agreement must include minimum requirements and provisions as
follows:
new text end

new text begin (1) the private entity must design, construct, and finance the project, and, where
applicable, operate and maintain the project;
new text end

new text begin (2) the form of payment and performance bonds the private entity and any construction
contractor engaged by the private entity to provide construction services in connection with
the project must obtain;
new text end

new text begin (3) the bonds and security the private entity must furnish for the project;
new text end

new text begin (4) the standards that apply to the project's design, including any performance and quality
requirements;
new text end

new text begin (5) the project schedule, including milestones for the design, construction, and financing
phases of the project;
new text end

new text begin (6) the duration of the project's operation and maintenance phase, if any;
new text end

new text begin (7) requirements regarding the insurance policies the private entity must procure in
connection with the project, including any builder's risk insurance policies, liability insurance
policies, professional errors and omissions policies, and other insurance policies necessary
or advisable in connection with the project;
new text end

new text begin (8) liquidated damages must be paid to the governmental entity in the event of delays
to project completion;
new text end

new text begin (9) the rights of the governmental entity to provide administration, oversight, and
monitoring of the private entity's performance of duties and obligations under the
comprehensive agreement;
new text end

new text begin (10) the rights of the parties in the event the comprehensive agreement is terminated for
cause or for convenience;
new text end

new text begin (11) reimbursement must be paid to the governmental entity for services the governmental
entity provides;
new text end

new text begin (12) filing of appropriate financial statements on a periodic basis;
new text end

new text begin (13) dispute resolution, including a requirement that the parties attempt to mediate
disputes before initiating any legal proceedings in the state or federal court having jurisdiction
over the project;
new text end

new text begin (14) the user fee, lease payment, or service payment established by agreement of the
parties, which must be established as a payment or fee that is an equal amount for individuals
using a project facility under like conditions and that does not materially discourage use of
the project. An executed comprehensive agreement or an amendment to the comprehensive
agreement is conclusive evidence that the user fee, lease payment, or service payment
complies with this chapter. A user fee or lease payment established as a revenue source in
the comprehensive agreement may be in addition to or in lieu of a service payment;
new text end

new text begin (15) whether the governmental entity may make grants or loans to the private entity
from money received from the federal, state, or local government or any agency or
instrumentality of the government;
new text end

new text begin (16) the private entity's duties under this chapter including any terms the governmental
entity determines serve the public interest;
new text end

new text begin (17) the notice and cure rights of the parties in the event of a default;
new text end

new text begin (18) any change in the terms of the comprehensive agreement that the parties agree to
must be added to the comprehensive agreement by written amendment;
new text end

new text begin (19) the comprehensive agreement may provide for the development or operation of
phases or segments of the project;
new text end

new text begin (20) the comprehensive agreement must provide that a security document or other
instrument purporting to mortgage, pledge, encumber, or create a lien, charge, or security
interest on or against the private entity's interest does not extend to or affect the state's fee
simple interest in the project or the state's rights or interests under the comprehensive
agreement. Any debt holder must acknowledge that the mortgage, pledge, or encumbrance
or a lien, charge, or security interest on or against the private entity's interest is subordinate
to the state's fee simple interest in the project;
new text end

new text begin (21) where the governmental entity pledges to make future appropriations to pay for
portions of the project, the governmental entity must provide in the comprehensive agreement
the mechanisms by which the appropriations are made. The risk that the governmental entity
does not make future appropriations is borne by the private entity and not by architects,
engineers, contractors, or subcontractors performing design and construction services in
connection with the project;
new text end

new text begin (22) the private entity is prohibited from charging any liquidated damages owed to the
governmental entity by the private entity to any architects, engineers, contractors, or
subcontractors performing design and construction services in connection with the project;
new text end

new text begin (23) a governmental entity is not prohibited from developing any project of any kind,
and the comprehensive agreement must not include any noncompetition clause or other
provision limiting the governmental entity's ability to procure any future project;
new text end

new text begin (24) the private entity must use the architects, engineers, contractors, and subcontractors
who contributed materially to the proposal; and
new text end

new text begin (25) upon financial closing of loans to finance the project, the funds used for project
construction must be set into escrow and held in trust for the benefit and protection of
contractors and subcontractors performing the work.
new text end

Sec. 6.

new text begin [16F.06] POWERS AND DUTIES; PRIVATE ENTITIES.
new text end

new text begin (a) A private entity has the power to:
new text end

new text begin (1) design, build, finance and, where applicable, operate and maintain the project; and
new text end

new text begin (2) collect lease payments, impose user fees, or enter into service contracts in connection
with the project.
new text end

new text begin (b) A private entity is prohibited from imposing a user fee or increasing a user fee amount
unless the fee or increase is approved by the governmental entity.
new text end

new text begin (c) A private entity may own, lease, or acquire any other right to use or operate the
project.
new text end

new text begin (d) A private entity may finance a project in the amounts and on the terms determined
by the private entity. A private entity may issue debt, equity, or other securities or obligations,
enter into sale and leaseback transactions, or secure any financing with a pledge of, security
interest in, or lien on any or all of the private entity's property, including property interests
in the project.
new text end

new text begin (e) When operating the project, a private entity may:
new text end

new text begin (1) establish classifications, using reasonable categories, to assess user fees; and
new text end

new text begin (2) with the consent of the governmental entity, adopt and enforce reasonable rules for
the project to the same extent as the governmental entity.
new text end

new text begin (f) The private entity must:
new text end

new text begin (1) design, construct, finance, and, where applicable, operate and maintain the project
in a manner that is (i) acceptable to the governmental entity, and (ii) compliant with the
comprehensive agreement;
new text end

new text begin (2) open the project for public use at all times, or at appropriate times based on the public
use of the project, subject to (i) payment of applicable user fees, lease payments, or service
payments, and (ii) paragraph (g);
new text end

new text begin (3) maintain, or contract for the maintenance or upgrade of, the project if required by
any applicable interim or comprehensive agreement;
new text end

new text begin (4) cooperate with the governmental entity to establish any interconnection with the
project requested by the governmental entity; and
new text end

new text begin (5) comply with any applicable interim or comprehensive agreement, lease, or service
contract.
new text end

new text begin (g) The project may be temporarily closed due to an emergency or, with the consent of
the governmental entity, to protect public safety or perform reasonable construction or
maintenance activities.
new text end

new text begin (h) This chapter does not prohibit a private entity project from providing additional
services to the public or persons other than the governmental entity with respect to the
project, provided the additional service does not impair the private entity's ability to meet
the commitments to the governmental entity under any applicable interim or comprehensive
agreement.
new text end

Sec. 7.

new text begin [16F.07] FEDERAL, STATE, AND LOCAL ASSISTANCE.
new text end

new text begin (a) A private entity and the governmental entity may use any funding resources available
to the parties, including:
new text end

new text begin (1) accessing any designated trust funds; and
new text end

new text begin (2) borrowing or accepting grants from any political subdivision of the state.
new text end

new text begin (b) The governmental entity may obtain federal, state, or local assistance for a project
under this chapter and may enter into any contracts required to receive the assistance.
new text end

new text begin (c) The governmental entity may determine that paying for all or part of the costs of a
project directly or indirectly from the proceeds of a grant or loan made by the local, state,
or federal government or any agency or instrumentality of the government serves a public
purpose under this chapter.
new text end

Sec. 8.

new text begin [16F.08] PERFORMANCE AND PAYMENT BONDS REQUIRED.
new text end

new text begin (a) The construction, remodel, or repair of a qualifying project may be performed only
after performance and payment bonds for the construction, remodel, or repair have been
executed in compliance with sections 574.26 to 574.32, regardless of whether the project
is on public or private property or is publicly or privately owned. The obligee under a
performance bond under this section may be a public entity, a private person, or an entity
consisting of both a public entity and a private person.
new text end

new text begin (b) For purposes of this section, a project is considered private for purposes of chapter
514. Any improvement made due to a project under this chapter is subject to the liens
provided for under chapter 514.
new text end

Sec. 9.

new text begin [16F.09] MATERIAL DEFAULT; REMEDIES.
new text end

new text begin (a) If a private entity commits a material default, the governmental entity assumes the
responsibilities and duties of the private entity with respect to the project. If the governmental
entity assumes the responsibilities and duties of the private entity, the governmental entity
has all the rights, title, and interest in the project, subject to any liens under chapter 514,
and any liens on revenue previously granted by the private entity to any person financing
the project.
new text end

new text begin (b) A governmental entity that possesses the power of eminent domain under state law
may exercise that power to acquire the project in the event of a material default by the
private entity. Any person who provided financing for the project, the private entity with
respect to its capital investment in the project, and any person possessing any lien rights
under chapter 514, may participate in the eminent domain proceedings.
new text end

new text begin (c) The governmental entity may terminate, with cause, any comprehensive agreement
and exercise any other rights and remedies available to the governmental entity at law or
in equity.
new text end

new text begin (d) The governmental entity may make any appropriate claim under the performance
bonds and other security required by this chapter.
new text end

new text begin (e) If the governmental entity elects to assume the responsibilities and duties for a project
under paragraph (a), the governmental entity may:
new text end

new text begin (1) develop or operate the qualifying project;
new text end

new text begin (2) impose user fees;
new text end

new text begin (3) impose and collect lease payments for the project's use; and
new text end

new text begin (4) comply with any applicable contract to provide services.
new text end

new text begin (f) The governmental entity must collect and pay to secured parties any revenue subject
to a lien, and to parties having lien claims under chapter 514, amounts necessary to satisfy
the private entity's obligations to secured parties, including the maintenance of reserves.
The liens must be correspondingly reduced and released when paid in full.
new text end

new text begin (g) After lien claimants with liens under chapter 514 are paid in full, and before any
payment is made to or for the benefit of a secured party, the governmental entity may use
revenue to pay a project's current operation and maintenance costs, including compensation
to the governmental entity for the fair value of services to operate and maintain the project.
new text end

new text begin (h) A governmental entity is prohibited from pledging the governmental entity's full
faith and credit to secure any of the private entity's financing that was assumed by the
governmental entity when the governmental entity assumed responsibility for the project.
new text end

Sec. 10.

new text begin [16F.10] PROCUREMENT GUIDELINES.
new text end

new text begin (a) Section 471.345 does not apply to a project under this chapter.
new text end

new text begin (b) A private entity is prohibited from substituting or replacing team members, including
an architect, engineer, or builder, after a project is approved and an interim or comprehensive
agreement is executed.
new text end

Sec. 11.

new text begin [16F.11] UNSOLICITED PROPOSALS.
new text end

new text begin A governmental entity may accept unsolicited proposals submitted by a private entity
for a project. The unsolicited proposal may include information related to the factors a
governmental entity must evaluate as part of a feasibility and impact study. If the
governmental entity elects to pursue the project identified in the unsolicited proposal, the
governmental entity must comply with this chapter.
new text end

Sec. 12.

new text begin [16F.12] CONFLICT OF INTEREST.
new text end

new text begin A governmental entity employee or a person related to the employee within the second
degree by consanguinity or affinity is prohibited from accepting money, a financial benefit,
or other consideration from a private entity participating in the bidding process for a project
or party to a comprehensive agreement with the governmental entity.
new text end

Sec. 13.

new text begin [16F.13] PROHIBITED EMPLOYMENT WITH FORMER OR RETIRED
GOVERNMENTAL ENTITY EMPLOYEES.
new text end

new text begin A private entity is prohibited from employing or entering into a professional services
or consulting services contract with a former or retired governmental entity employee if the
private entity has entered into a comprehensive agreement with the governmental entity
within two years of the date the former or retired governmental entity employee terminated
employment with the governmental entity.
new text end

Sec. 14.

new text begin [16F.14] GOVERNMENTAL ENTITY EMPLOYEES; PROHIBITED
EMPLOYMENT.
new text end

new text begin (a) A governmental entity employee is prohibited from being employed or hired by a
private entity to perform duties related to the employee's specific duties in developing and
implementing a project under this chapter, including reviewing, evaluating, developing,
and negotiating a project proposal.
new text end

new text begin (b) The governmental entity must obtain from each employee sufficient information to
determine whether:
new text end

new text begin (1) the employee is employed by a private entity; and
new text end

new text begin (2) a potential conflict of interest exists between the employee's duties for the
governmental entity and the employee's duties with the private entity.
new text end

new text begin (c) Each governmental entity employee whose duties relate to a project under this chapter
must attest that the employee is aware of and agrees to the governmental entity's ethics and
conflict-of-interest policies.
new text end

new text begin (d) To the extent the other employment is authorized by the governmental entity's policy,
this section does not prohibit a governmental entity employee from obtaining additional
employment that is unrelated to a project under this chapter.
new text end

Sec. 15.

new text begin [16F.15] CONSTRUCTION; EFFECT.
new text end

new text begin The provisions of this chapter must be liberally construed to encourage execution of
public-private partnerships for infrastructure projects in Minnesota.
new text end