Bill Text: MI SB0097 | 2017-2018 | 99th Legislature | Introduced
Bill Title: State financing and management; authorities; public-private partnerships; allow for certain public authorities. Creates new act.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Engrossed - Dead) 2017-11-28 - Referred To Second Reading [SB0097 Detail]
Download: Michigan-2017-SB0097-Introduced.html
SENATE BILL No. 97
February 2, 2017, Introduced by Senators KOWALL and HERTEL and referred to the Committee on Commerce.
A bill to authorize certain public authorities to develop
certain eligible projects and to enter into certain agreements; to
impose certain conditions on those agreements; to impose certain
powers and duties on certain state and local officials and
employees; to authorize the financing of certain eligible projects;
and to exempt certain property from certain taxes.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"Michigan alternative project delivery act".
Sec. 3. As used in this act:
(a) "Develop" or "development" means the study, planning,
design, acquisition, construction, reconstruction, rehabilitation,
improvement, repair, financing, management, operation, or
maintenance of an eligible project and any other service related to
an eligible project. Develop or development also includes the
imposition, charging, assessment, collection, and enforcement of
user fees related to an eligible project.
(b) "Eligible project" means 1 or more of the following:
(i) A transportation project.
(ii) A facility project.
(c) "Facility project" means a building, structure,
appurtenance, or other real property necessary or desirable for the
delivery of health care or laboratory facilities. Facility project
also includes services related to the delivery of health care or
laboratory facilities.
(d) "Local unit of government" means 1 or more of the
following:
(i) A county.
(ii) A city.
(iii) A township.
(iv) A village.
(v) A school district.
(vi) An intermediate school district.
(vii) A community college.
(viii) A public university.
(ix) An authority of an entity described in this subdivision.
(e) "Private party" means a person that is not the United
States, another nation, this state, another state, or a local unit
of government, or a political subdivision of the United States,
another nation, this state, another state, or a local unit of
government.
(f) "Public authority" means this state, a state department,
or a state agency.
(g) "Public-private agreement" means an agreement between a
public authority and 1 or more private parties for the development
of an eligible project. A public-private agreement may include 1 or
more local units of government.
(h) "Transportation project" means any roadway, railway,
transit system, building, structure, appurtenance, or other real
property used directly or indirectly in the transportation of
persons or the transportation or storage of goods, substances, or
vehicles. Transportation project also includes services related to
the transportation of persons or the transportation or storage of
goods, substances, or vehicles. A transportation project does not
include a bridge or other infrastructure directly associated with
an international border crossing.
(i) "User fees" means user fees, consumption charges, rents,
license fees, or similar or ancillary charges relating to the use
of eligible projects. User fees also include fees and charges for
creating, maintaining, and administering an account, including
credit card, bank, and similar fees and charges. User fees do not
include tolls charged on any transportation project.
(j) "Work product" means any technical or financial concepts
that are 1 or more of the following:
(i) Included in a bidder's response to a request for
qualifications or in a bidder's proposal for the development of an
eligible project.
(ii) Submitted by a bidder for review by the public authority
in accordance with the public authority's request for
qualifications or request for proposals for the development of an
eligible project.
(iii) Raised by a bidder at a meeting with the public
authority prior to the due date for proposals, including 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 bidder for the development of an
eligible project.
(iv) Raised in any negotiations between the public authority
and a bidder prior to award and execution of a public-private
agreement.
Sec. 5. (1) A public authority may do 1 or more of the
following:
(a) Consider, compare, and implement various methods for
procuring and developing eligible projects, including methods that
are alternatives to methods traditionally used by the public
authority.
(b) Enter into public-private agreements to develop eligible
projects.
(c) Enter into any agreements ancillary to public-private
agreements, including, but not limited to, 1 or more of the
following:
(i) Agreements with financial, legal, and other consultants
with specialized knowledge to do 1 or more of the following:
(A) Assist in the study, planning, design, structuring,
drafting, procurement, evaluation, and negotiation of public-
private agreements.
(B) Assist in the administration of public-private agreements
and the operation or maintenance of eligible projects.
(ii) Agreements between the public authority and 1 or more of
the following:
(A) A private party.
(B) A private party's lenders.
(C) Federal, state, and local units of government.
(d) Work together with other public authorities to develop
eligible projects through public-private agreements.
(e) Bundle 2 or more eligible projects under 1 public-private
agreement.
(f) Procure services, award contracts, administer revenues,
appropriate funds of that public authority, and take any other
action as may be required in connection with the development of
eligible projects through public-private agreements.
(g) Subject to applicable law, exercise the power of eminent
domain to acquire property, permanent or temporary easements,
rights-of-way, or other rights in property that are necessary to
develop an eligible project, regardless of whether the property
will be owned in fee simple by the public authority or whether that
property will be leased to, licensed to, or operated by a private
party in connection with the development of the eligible project
through a public-private agreement.
(2) Nothing in this act expands the type of asset or provision
of type of services that a public authority is otherwise authorized
to develop under existing laws applicable to that public authority.
Nothing in this act authorizes a public authority to charge or
collect tolls on a transportation project.
(3) A public-private agreement is subject to all of the
following, as applicable:
(a) The fair and open competition in governmental construction
act, 2011 PA 98, MCL 408.871 to 408.883.
(b) The local government labor regulatory limitation act, 2015
PA 105, MCL 123.1381 to 123.1396.
(4) A public authority shall hold a public hearing not less
than every 5 years after the completion of an eligible project to
conduct a public review of the eligible project.
Sec. 7. (1) Prior to developing an eligible project, a public
authority shall consider and compare various methods for the
development of an eligible project and identify the proposed
delivery method.
(2) Notwithstanding any other provision of state law, the
public authority may use any procurement method and process that
the public authority determines is appropriate to solicit private
parties and award public-private agreements under this act,
including, but not limited to, any of the following or combination
of the following, at the public authority's discretion:
(a) Calls for project proposals that private parties are
invited through a competitive process to submit to develop an
eligible project.
(b) Competitive solicitations using 1 or more of requests for
qualifications, prequalification or short-listing of qualified
proposers, requests for proposals, preproposal meetings with
individual short-listed proposers, revised proposals, and final and
best offers.
(c) Unsolicited proposals, provided that if the public
authority determines that there is sufficient merit to pursue any
unsolicited proposal, reasonable opportunity for other persons to
submit competing proposals for consideration and possible contract
award is provided.
(d) Negotiations with 1 or more bidders prior to award.
(3) For any procurement in which the public authority issues a
request for qualifications, request for proposals, or similar
solicitation document, the request must generally set forth the
factors that the public authority will evaluate when reviewing the
submittals. The public authority may, in its discretion, determine
which factors it will consider and the relative weight of those
factors in the evaluation process to obtain the best value for the
public authority. Evaluation methodologies for selection may
include best value, low bid or proposal, lowest responsible or
adjusted bid or proposal, qualifications-based selection, lowest
public contribution, most expansive project, or any combination of
the foregoing or any other evaluation methodology for selection
that the public authority determines appropriate for the eligible
project.
(4) The public authority may pay stipends or payments for work
product on terms and conditions and in the amounts as determined in
the public authority's discretion in the following circumstances,
or in other circumstances that the public authority determines to
be appropriate in its discretion:
(a) To short-listed or prequalified bidders if the public
authority cancels the procurement prior to the due date for
proposals in the request for proposals.
(b) To bidders that submit a proposal provided that the public
authority determines that the proposal is responsive to the public
authority's request for proposals or similar solicitation document
and meets all requirements established by the public authority for
the eligible project.
(5) In exchange for a stipend or payment for work product, the
public authority may require the bidder to grant to the public
authority the right to use some or all of the work product
contained in the proposal.
(6) The public authority may identify in a request for
qualifications, request for proposals, or similar solicitation
document a process whereby bidders may request and receive
authorization to deviate from technical and financial
specifications, subject to demonstrating to the public authority
that the deviations provide the same or greater quality, utility,
function, and value.
(7) Notwithstanding any other provision of law, the public
authority may do 1 or more of the following:
(a) Provide exclusive protest remedies in its requests for
qualifications, requests for proposals, or similar solicitation
documents.
(b) Limit the rights of private parties responding to
solicitation documents to protest matters arising in connection
with the procurement.
(c) Require that private parties responding to solicitation
documents expressly waive all other rights and remedies that may be
available under applicable law.
(8) Except as expressly provided otherwise in this subsection,
a writing prepared, owned, used, in the possession of, or retained
by the public authority in the performance of an official function
is a public record and must be made available to the public in
compliance with the freedom of information act, 1976 PA 442, MCL
15.231 to 15.246. Documents and other analysis used in the
decision-making process and preparation of the procurement
documents and proposals are not subject to release or disclosure by
the public authority until final award and execution of the public-
private agreement and the conclusion of any protest or other
challenge to the award or the lapse of the protest period without
challenge, absent an administrative or judicial order requiring
such release or disclosure. However, if the public authority
decides not to pursue or complete an eligible project, then
documents and other analysis used in the decision-making process or
in the preparation of the procurement documents or proposals not
otherwise exempt from disclosure are a public record and must be
made available to the public in compliance with the freedom of
information act, 1976 PA 442, MCL 15.231 to 15.246.
(9) The characterization by the private party of information
as being confidential trade secrets or commercial or financial
information exempt from disclosure is not binding upon the public
authority if the information is not afforded that protection under
this act or state law.
(10) When developing a facility project under a public-private
agreement, the public authority shall consult with the state budget
director regarding the future fiscal impact on the affected state
department, state agency, or authority of this state.
Sec. 9. (1) Any lawful source of public or private funding and
financing, or combination of these, may be utilized for the
development of an eligible project under this act.
(2) A public-private agreement may require the private party
to arrange for all or a portion of the financing required for the
eligible project. A public authority may also elect in its
discretion to contribute funds or financing required for the
eligible project in lieu of or in combination with funding or
financing arranged by the private party. A public authority may
elect in its discretion to participate with the private party in
any gains realized through revenue sharing, cost-saving sharing
agreements, or the refinancing of the eligible project, as
determined by the public authority in its discretion.
(3) A public authority may accept from the United States, any
state, or a local unit of government or any political subdivision
of the United States, any state, or a local unit of government
funds or credit assistance as is available to it for carrying out
the purposes of this act, whether the funds are made available by
grant, loan, guaranty, line of credit, or other financing
arrangement. A public authority may enter into these arrangements
and other agreements with the United States, any state, or a local
unit of government or any political subdivision of the United
States, any state, or a local unit of government, as may be
necessary, proper, and convenient for carrying out the purposes of
this act. A public authority may seek allocation for, issue, and
provide for the issuance of private activity bonds under applicable
federal, state, or local programs, including as described in 26 USC
141. A public authority may apply for or facilitate the application
for or secure financing from any source and make funds available to
1 or more private parties either directly or through other public
authorities.
(4) A public authority may accept from any source any grant,
donation, gift, or other form of conveyance of land, money, other
real or personal property, or other valuable thing made to the
public authority for carrying out the purposes of this act.
(5) A public authority may impose and collect user fees,
increase the user fees, and use lawful measures to enforce the user
fees or authorize another person to impose, collect, increase, and
enforce the user fees to the same extent as available to the public
authority. Subject to the public-private agreement, the public
authority shall determine the use, application, and sharing of
collected user fees. User fees may be imposed, charged, and
collected by manual, digital, or electronic means. A public-private
agreement may also include a schedule, formula, or mechanism for
the adjustment of user fees during the term of the public-private
agreement.
(6) Bonds, notes, and other obligations may be issued under
applicable law for the purposes of providing funding for an
eligible project. Revenues, including user fees, generated or
received pursuant to a public-private agreement may be directed to
a segregated account and pledged for the repayment of bonds, notes,
or other obligations without appropriation. Bonds, notes, or other
obligations supported by revenue received from or payments made
pursuant to a public-private agreement are not a debt of this
state. Any financing may be structured on a senior, parity, or
subordinate basis with any other financing or funding.
(7) Notwithstanding any other provision of this act, if any
property of a public authority is leased, at the conclusion of the
lease the property remains property of the public authority.
Sec. 11. (1) A public-private agreement may include 1 or more
of the following:
(a) Provisions addressing the allocation and management of
project risks, including, but not limited to, design, construction,
geotechnical, delay, permitting, governmental approvals, change of
law, utility adjustments, change in utility costs, operations and
maintenance, force majeure, insurance availability and costs,
inflation, and financing risks.
(b) Provisions addressing payments on terms determined by the
public authority, including, but not limited to, milestone
payments, progress payments, availability or service fee payments,
and other compensation.
(c) Provisions requiring that the private party or 1 or more
of its contractors provide proposal, performance, or payment
security. Performance or payment security if required may be in the
amounts determined by the public authority and in the form of
bonds, guarantees, letters of credit, committed equity, or any
other type of financial instrument, or any combination of these,
each as determined by the public authority.
(d) Provisions requiring that the private party lease or lease
back or otherwise be granted licenses, rights of entry, or rights
to operate the eligible project through the term of the public-
private agreement.
(e) Provisions requiring that either the public authority or
the private party provide the utilities required during the
development of the eligible project, including the right and
authority to adjust, relocate, or protect-in-place existing
utilities.
(f) Provisions allowing or requiring the use of arbitration or
other alternative dispute resolution procedures to resolve disputes
between the parties to a public-private agreement. The 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 resort to the courts.
(g) Provisions establishing criteria for determining
substantial completion, final acceptance, occupancy, or service
readiness of the eligible project and any applicable commissioning
of the eligible project.
(h) Provisions addressing the public authority's requirements
for programming, operations, use, and change in use of the eligible
project and flexibility to expand, rehabilitate, or reconstruct the
eligible project.
(i) Provisions addressing, as applicable, the operations,
maintenance, and facilities management services, including
maintenance and renewal, to be provided by the private party, the
public authority, or third parties.
(j) Provisions addressing responsibility for maintenance and
rehabilitation in order for an eligible project to meet the
standards determined by the public authority, in its discretion, at
the end of the term of the public-private agreement.
(k) Provisions specifying events of default and remedies
available to the private party, the public authority, and third
parties.
(l) Provisions setting forth the technical standards and
specifications with which the private party must comply.
(m) Provisions that provide requirements for insurance with
the coverages and deductibles as determined by the public authority
to be appropriate in its discretion.
(n) Provisions regarding the maintenance and auditing of the
private party's books and records.
(2) A public-private agreement shall not be entered into for
an initial period exceeding 50 years from final acceptance or
occupancy or service readiness of the eligible project, as
applicable.
(3) A public-private agreement may not prohibit a public
authority from constructing, repairing, reconstructing, or
expanding a facility that competes for user fees with the eligible
facility developed under the public-private agreement.
Sec. 13. (1) The authority granted under this act supplements
and is independent of any existing authority and does not limit,
replace, or detract from existing authority.
(2) This act does not affect or impair a public-private
agreement or other agreement entered into before the effective date
of this act.
(3) Nothing in this act prevents a public authority or a local
unit of government from using other legal authority to enter into
public-private agreements or other agreements for either of the
following:
(a) For the development of eligible projects described under
this act.
(b) For the development of projects outside the scope of this
act.
Sec. 15. Property developed under and subject to a public-
private agreement is exempt from any and all state and local ad
valorem and other property taxes that otherwise might be
applicable.
Sec. 16. (1) A public authority may impose user fees as
provided in section 9(5).
(2) User fees shall be administered, collected, and enforced
as provided by law.
(3) In addition to other rights and remedies available to a
public authority or a private entity under a public-private
agreement, the public authority or another person authorized to do
so by the public authority may bring a civil action against a
person who fails to pay a user fee if the required sum remains
unpaid for 180 days in order to collect the unpaid sum in a court
having jurisdiction. If the civil action results in a judgment
against the defendant, the defendant is required to reimburse the
plaintiff for all costs of enforcement and collection, including
filing and legal fees.
Sec. 17. Nothing contained in this act shall limit or modify
the rights and powers of law enforcement officers to enforce
traffic violations and other laws upon any eligible project
developed under this act or the subject of a public-private
agreement.
