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HF 1924

as introduced - 89th Legislature (2015 - 2016) Posted on 03/16/2015 03:06pm

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 03/16/2015

Current Version - as introduced

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A bill for an act
relating to transportation; establishing public-private partnership pilot program;
requiring report.

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

Section 1. new text beginPUBLIC-PRIVATE PARTNERSHIP PILOT PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Public-private partnership initiatives. new text end

new text begin (a) The commissioner
of transportation and Metropolitan Council are authorized to consider and utilize
public-private partnership procurement methods for up to three pilot projects as provided
in this section. Utilization of public-private partnerships is a recognition of the importance
to the state of an efficient and safe transportation system, and the necessity of developing
alternative funding sources to supplement traditional sources of transportation revenues.
A public-private partnership initiative must take advantage of private sector efficiencies in
design and construction, along with expertise in finance and development, and provide a
better long-term value for the state than could be obtained through traditional procurement
methods.
new text end

new text begin (b) Notwithstanding Minnesota Statutes, section 160.845, 160.98, or any other law
to the contrary, the commissioner or council may consider for use in the pilot program any
existing public-private partnership mechanism or any proposed mechanism that proves the
best available option for the state. Mechanisms the commissioner or council may consider
include but are not limited to toll facilities, BOT facilities, BTO facilities, user fees,
construction payments, joint development agreements, negotiated exactions, air rights
development, street improvement districts, or tax increment financing districts for transit.
For the purposes this section, toll facilities, BOT facilities, and BTO facilities have the
meanings given under Minnesota Statutes, section 160.84.
new text end

new text begin (c) As part of the pilot program, the commissioner and council are directed to form
an independent advisory and oversight office, the Joint Program Office for Economic
Development and Alternative Finance. The office shall consist of the commissioner of
management and budget, the commissioner of employment and economic development,
the commissioner of administration, the commissioner of transportation, the Metropolitan
Council, and one representative each from the American Council of Engineering
Companies - Minnesota chapter, the Central Minnesota Transportation Alliance, the
Counties Transit Improvement Board, and the Minnesota County Engineers Association.
In addition, the commissioner and Metropolitan Council shall invite the Federal Highway
Administration and the Federal Transit Administration to participate in the office's
activities. The office's duties include but are not limited to reviewing and approving
projects proposed under this section, reviewing any contractual or financial agreements
to ensure program requirements are met, and ensuring that any proposed or executed
agreement serves the public interest.
new text end

new text begin Subd. 2. new text end

new text begin Pilot program restrictions and project selection. new text end

new text begin (a) The commissioner
or council may receive or solicit and evaluate proposals to build, operate, and finance
projects that are not inconsistent with the commissioner's most recent statewide
transportation plan or the council's most recent transportation policy plan. If the
department or council receives an unsolicited proposal, the department or council shall
publish a notice in the State Register at least once a week for two weeks stating that the
department or council has received the proposal and will accept, for 120 days after the
initial date of publication, other proposals for the same project purpose. The private
proposer must be selected on a competitive basis.
new text end

new text begin (b) When entering into a public-private partnership, the commissioner or
Metropolitan Council may not enter into any noncompete agreement that inhibits the
state's ability to address ongoing or future infrastructure needs.
new text end

new text begin (c) If the commissioner or council enters into a public-private partnership agreement
that includes a temporary transfer of ownership or control of a road, bridge, or other
infrastructure investment to the private entity, the agreement must include a provision
requiring the return of the road, bridge, or other infrastructure investment to the state
after a specified period of time.
new text end

new text begin (d) The commissioner and council may only consider new projects for a
public-private partnership. The commissioner and council are prohibited from considering
projects involving existing infrastructure for a public-private partnership, unless the
proposed project adds capacity to the existing infrastructure.
new text end

new text begin Subd. 3. new text end

new text begin Evaluation and selection of private entity and project. new text end

new text begin (a) The
commissioner and council shall contract with one or more consultants to assist in proposal
evaluation. The consultant must possess expertise and experience in public-private
partnership project evaluation methodology, such as value for money, costs of
public-private partnership compared with costs of public project delivery, and cost-benefit
analysis.
new text end

new text begin (b) When soliciting, evaluating, and selecting a private entity with which to enter
into a public-private partnership and before selecting a project, the commissioner or
council must consider:
new text end

new text begin (1) the ability of the proposed project to improve safety, reduce congestion, increase
capacity, and promote economic growth;
new text end

new text begin (2) the proposed cost of and financial plan for the project;
new text end

new text begin (3) the general reputation, qualifications, industry experience, and financial capacity
of the private entity;
new text end

new text begin (4) the project's proposed design, operation, and feasibility;
new text end

new text begin (5) length and extent of transportation or transit service disruption;
new text end

new text begin (6) comments from local citizens and affected jurisdictions;
new text end

new text begin (7) benefits to the public;
new text end

new text begin (8) the safety record of the private entity; and
new text end

new text begin (9) any other criteria the commissioner or council deems appropriate.
new text end

new text begin (c) The independent advisory and oversight office established under subdivision
1, paragraph (c), shall review proposals evaluated by the commissioner or council to
ensure the requirements of this section are being met. The independent advisory and
oversight office shall first determine whether the project, as proposed, serves the public
interest. In making this determination, the office must identify and consider advantages
and disadvantages for various stakeholders, including taxpayers, workers, transportation
and transit providers and operators, transportation and transit users, commercial vehicle
operators, and the general public, including the impact on the state's economy. If the
proposed project serves the public interest, the office must evaluate the proposals
according to the criteria specified in this section.
new text end

new text begin Subd. 4. new text end

new text begin Public-private agreement. new text end

new text begin (a) A public-private agreement between the
commissioner or the council and a private entity must, at a minimum, specify:
new text end

new text begin (1) the planning, acquisition, financing, development, design, construction,
reconstruction, replacement, improvement, maintenance, management, repair, leasing, or
operation of the project;
new text end

new text begin (2) the term of the public-private agreement;
new text end

new text begin (3) the type of property interest, if any, that the private entity will have in the project;
new text end

new text begin (4) a description of the actions the commissioner or council may take to ensure
proper maintenance of the project;
new text end

new text begin (5) whether user fees will be collected on the project, and the basis by which the user
fees shall be determined and modified along with identification of the public agency that
will determine and modify fees;
new text end

new text begin (6) compliance with applicable federal, state, and local laws;
new text end

new text begin (7) grounds for termination of the public-private agreement by the commissioner
or council;
new text end

new text begin (8) adequate safeguards for the traveling public and residents of the state in event of
default on the contract;
new text end

new text begin (9) financial protection for the state in the event of default; and
new text end

new text begin (10) procedures for amendment of the agreement.
new text end

new text begin (b) A public-private agreement between the commissioner or council and a private
entity may provide for:
new text end

new text begin (1) review and approval by the commissioner or council of the private entity's plans
for the development and operation of the project;
new text end

new text begin (2) inspection by the commissioner or council of construction and improvements
to the project;
new text end

new text begin (3) maintenance by the private entity of a liability insurance policy;
new text end

new text begin (4) filing of appropriate financial statements by the private entity on a periodic basis;
new text end

new text begin (5) filing of traffic reports by the private entity on a periodic basis;
new text end

new text begin (6) financing obligations of the commissioner or council and the private entity;
new text end

new text begin (7) apportionment of expenses between the commissioner or council and the private
entity;
new text end

new text begin (8) the rights and remedies available in the event of a default or delay;
new text end

new text begin (9) the rights and duties of the private entity, the commissioner or council, and other
state or local governmental entities with respect to the use of the project;
new text end

new text begin (10) the terms and conditions of indemnification of the private entity by the
commissioner or council;
new text end

new text begin (11) assignment, subcontracting, or other delegations of responsibilities of (i)
the private entity, or (ii) the commissioner or council under agreement to third parties,
including other private entities or state agencies;
new text end

new text begin (12) if applicable, sale or lease to the private entity of private property related to
the project;
new text end

new text begin (13) traffic enforcement and other policing issues; and
new text end

new text begin (14) any other terms and conditions the commissioner or council deems appropriate.
new text end

new text begin (c) The independent advisory and oversight office established under subdivision 1,
paragraph (c), shall review any proposed contractual agreement prior to execution in
order to ensure that the contract serves the public interest and meets the requirements
of this section.
new text end

new text begin Subd. 5. new text end

new text begin Funding from federal government. new text end

new text begin (a) The commissioner or council may
accept from the United States or any of its agencies funds that are available to the state
for carrying out the pilot program, whether the funds are available by grant, loan, or
other financial assistance.
new text end

new text begin (b) The commissioner or council may enter into agreements or other arrangements
with the United States or any of its agencies as necessary for carrying out the pilot program.
new text end

new text begin (c) The commissioner or council shall seek to maximize project funding from
nonstate sources and may combine federal, state, local, and private funds to finance a
public-private partnership pilot project.
new text end

new text begin Subd. 6. new text end

new text begin Reporting. new text end

new text begin By August 1, 2016, and annually by August 1 thereafter, the
commissioner and council shall submit to the chairs and ranking minority members of the
house of representatives and senate committees having jurisdiction over transportation
policy and finance a list of all agreements executed under the pilot program authority. The
list must identify each agreement, the contracting entities, contract amount and duration,
any repayment requirements, and provide an update on the project's progress. The list
may be submitted electronically and is subject to Minnesota Statutes, section 3.195,
subdivision 1.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after an appropriation is
effective to pay administrative expenses to create and operate the Joint Program Office
for Economic Development and Alternative Finance, hire a consultant, and prepare
required reports.
new text end