Bill Text: MN SF742 | 2013-2014 | 88th Legislature | Engrossed
Bill Title: Transportation public-private partnership pilot program establishment and procurement methods authorization
Sponsorship: Bipartisan Bill
Status: (Introduced - Dead) 2013-03-18 - Second reading [SF742 Detail]
Download: Minnesota-2013-SF742-Engrossed.html
1.2relating to transportation; contracts; establishing a public-private partnership
1.3pilot program and related regulations.
1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.5 Section 1. PUBLIC-PRIVATE PARTNERSHIP PILOT PROGRAM.
1.6(a) The commissioner of transportation and Metropolitan Council are authorized to
1.7consider and utilize public-private partnership procurement methods for up to three pilot
1.8projects as provided in this act. Utilization of public-private partnerships is a recognition
1.9of the importance to the state of an efficient and safe transportation system, and the
1.10necessity of developing alternative funding sources to supplement traditional sources of
1.11transportation revenues. A public-private partnership initiative must take advantage of
1.12private sector efficiencies in design and construction, along with expertise in finance and
1.13development, and provide a better long-term value for the state than could be obtained
1.14through traditional procurement methods.
1.15(b) Notwithstanding Minnesota Statutes, section 160.845, 160.98, or any other law
1.16to the contrary, the commissioner or council may consider for use in the pilot program any
1.17existing public-private partnership mechanism or any proposed mechanism that proves the
1.18best available option for the state. Mechanisms the commissioner or council may consider
1.19include, but are not limited to, toll facilities, BOT facilities, BTO facilities, user fees,
1.20construction payments, joint development agreements, negotiated exactions, air rights
1.21development, street improvement districts, or tax increment financing districts for transit.
1.22For the purposes of sections 1 to 6, toll facilities, BOT facilities, and BTO facilities have
1.23the meanings given under section 160.84.
2.1(c) As part of the pilot program, the commissioner and council are directed to form
2.2an independent advisory and oversight office, the Joint Program Office for Economic
2.3Development and Alternative Finance. The office shall consist of the commissioner of
2.4management and budget, the commissioner of employment and economic development,
2.5the commissioner of administration, the commissioner of transportation, the Metropolitan
2.6Council, and one representative each from the American Council of Engineering
2.7Companies - Minnesota chapter, the Central Minnesota Transportation Alliance, the
2.8Counties Transit Improvement Board, and the Minnesota County Engineers Association.
2.9In addition, the commissioner and Metropolitan Council shall invite the Federal Highway
2.10Administration and the Federal Transit Administration to participate in the office's
2.11activities. The office's duties shall include, but are not limited to, reviewing and approving
2.12projects proposed under this section, reviewing any contractual or financial agreements
2.13to ensure program requirements are met, and ensuring that any proposed or executed
2.14agreement serves the public interest.
2.15 Sec. 2. PILOT PROGRAM RESTRICTIONS AND PROJECT SELECTION.
2.16(a) The commissioner or council may receive or solicit and evaluate proposals to
2.17build, operate, and finance projects that are not inconsistent with the commissioner's most
2.18recent statewide transportation plan or the council's most recent transportation policy plan.
2.19If the department or council receives an unsolicited proposal, the department or council
2.20shall publish a notice in the State Register at least once a week for two weeks stating that
2.21the department or council has received the proposal and will accept, for 120 days after
2.22the initial date of publication, other proposals for the same project purpose. The private
2.23proposer must be selected on a competitive basis.
2.24(b) When entering into a public-private partnership, the commissioner or
2.25Metropolitan Council may not enter into any noncompete agreement that inhibits the
2.26state's ability to address ongoing or future infrastructure needs.
2.27(c) If the commissioner or council enters into a public-private partnership agreement
2.28that includes a temporary transfer of ownership or control of a road, bridge, or other
2.29infrastructure investment to the private entity, the agreement must include a provision
2.30requiring the return of the road, bridge, or other infrastructure investment to the state
2.31after a specified period of time.
2.32(d) The commissioner and council may only consider new projects for a
2.33public-private partnership. The commissioner and council are prohibited from considering
2.34projects involving existing infrastructure for a public-private partnership, unless the
2.35proposed project adds capacity to the existing infrastructure.
3.1(e) Among the projects the commissioner and council may consider are the
3.2construction of: an Interstate 94/US Highway 10 River Crossing near marked Minnesota
3.3Trunk Highway 24; the Fish Lake interchange; the marked Interstate 94 expansion from
3.4the Fish Lake interchange to marked Trunk Highway 24; the St. Croix River Crossing
3.5connecting Oak Park Heights, Minnesota, and St. Joseph, Wisconsin; and high-speed,
3.6commuter, and light rail projects.
3.7 Sec. 3. EVALUATION AND SELECTION OF PRIVATE ENTITY AND
3.8PROJECT.
3.9(a) The commissioner and council shall contract with one or more consultants to
3.10assist in proposal evaluation. The consultant must possess expertise and experience in
3.11public-private partnership project evaluation methodology, such as value for money,
3.12costs of public-private partnership compared with costs of public project delivery, and
3.13cost-benefit analysis.
3.14(b) When soliciting, evaluating, and selecting a private entity with which to enter
3.15into a public-private partnership and before selecting a project, the commissioner or
3.16council must consider:
3.17(1) the ability of the proposed project to improve safety, reduce congestion, increase
3.18capacity, and promote economic growth;
3.19(2) the proposed cost of and financial plan for the project;
3.20(3) the general reputation, qualifications, industry experience, and financial capacity
3.21of the private entity;
3.22(4) the project's proposed design, operation, and feasibility;
3.23(5) length and extent of transportation and transit service disruption;
3.24(6) comments from local citizens and affected jurisdictions;
3.25(7) benefits to the public;
3.26(8) the safety record of the private entity; and
3.27(9) any other criteria the commissioner or council deems appropriate.
3.28(c) The independent advisory and oversight office established under section 1,
3.29paragraph (c), shall review proposals evaluated by the commissioner or council to ensure
3.30the requirements of this section are being met. The independent advisory and oversight
3.31office shall first determine whether the project, as proposed, serves the public interest.
3.32In making this determination, the office must identify and consider advantages and
3.33disadvantages for various stakeholders, including taxpayers, workers, transportation and
3.34transit providers and operators, transportation and transit users, commercial vehicle
3.35operators, and the general public, including the impact on the state's economy. If the
4.1proposed project serves the public interest, the office must evaluate the proposals
4.2according to the criteria specified in this section.
4.3 Sec. 4. PUBLIC-PRIVATE AGREEMENT.
4.4(a) A public-private agreement between the commissioner or the council and a
4.5private entity shall, at a minimum, specify:
4.6(1) the planning, acquisition, financing, development, design, construction,
4.7reconstruction, replacement, improvement, maintenance, management, repair, leasing, or
4.8operation of the project;
4.9(2) the term of the public-private agreement;
4.10(3) the type of property interest, if any, that the private entity will have in the project;
4.11(4) a description of the actions the commissioner or council may take to ensure
4.12proper maintenance of the project;
4.13(5) whether user fees will be collected on the project and the basis by which the user
4.14fees shall be determined and modified along with identification of the public agency that
4.15will determine and modify fees;
4.16(6) compliance with applicable federal, state, and local laws;
4.17(7) grounds for termination of the public-private agreement by the commissioner
4.18or council;
4.19(8) adequate safeguards for the traveling public and residents of the state in event of
4.20default on the contract;
4.21(9) financial protection for the state in the event of default; and
4.22(10) procedures for amendment of the agreement.
4.23(b) A public-private agreement between the commissioner or council and a private
4.24entity may provide for:
4.25(1) review and approval by the commissioner or council of the private entity's plans
4.26for the development and operation of the project;
4.27(2) inspection by the commissioner or council of construction and improvements
4.28to the project;
4.29(3) maintenance by the private entity of a liability insurance policy;
4.30(4) filing of appropriate financial statements by the private entity on a periodic basis;
4.31(5) filing of traffic reports by the private entity on a periodic basis;
4.32(6) financing obligations of the commissioner or council and the private entity;
4.33(7) apportionment of expenses between the commissioner or council and the private
4.34entity;
4.35(8) the rights and remedies available in the event of a default or delay;
5.1(9) the rights and duties of the private entity, the commissioner or council, and other
5.2state or local governmental entities with respect to the use of the project;
5.3(10) the terms and conditions of indemnification of the private entity by the
5.4commissioner or council;
5.5(11) assignment, subcontracting, or other delegations of responsibilities of (i)
5.6the private entity, or (ii) the commissioner or council under agreement to third parties,
5.7including other private entities or state agencies;
5.8(12) if applicable, sale or lease to the private entity of private property related to
5.9the project;
5.10(13) traffic enforcement and other policing issues; and
5.11(14) any other terms and conditions the commissioner or council deems appropriate.
5.12(c) The independent advisory and oversight office established under section 1,
5.13paragraph (c), shall review any proposed contractual agreement prior to execution in
5.14order to ensure that the contract serves the public interest and the requirements of this
5.15section are met.
5.16 Sec. 5. FUNDING FROM FEDERAL GOVERNMENT.
5.17(a) The commissioner or council may accept from the United States or any of its
5.18agencies funds that are available to the state for carrying out the pilot program, whether
5.19the funds are available by grant, loan, or other financial assistance.
5.20(b) The commissioner or council may enter into agreements or other arrangements
5.21with the United States or any of its agencies as necessary for carrying out the pilot program.
5.22(c) The commissioner or council shall seek to maximize project funding from
5.23nonstate sources and may combine federal, state, local, and private funds to finance a
5.24public-private partnership pilot project.
5.25 Sec. 6. REPORTING.
5.26By August 1, 2015, and annually by August 1 thereafter, the commissioner
5.27and council shall submit to the chairs and ranking minority members of the house of
5.28representatives and senate committees having jurisdiction over transportation policy
5.29and finance a list of all agreements executed under the pilot program authority. The list
5.30must identify each agreement, the contracting entities, contract amount and duration, any
5.31repayment requirements, and provide an update on the project's progress. The list may be
5.32submitted electronically and is subject to Minnesota Statutes, section 3.195, subdivision 1.
5.33 Sec. 7. EFFECTIVE DATE.
6.1This act is effective the day after an appropriation is effective to pay administrative
6.2expenses creating and operating the Joint Program Office for Economic Development and
6.3Alternative Finance, hiring a consultant, and preparing required reports.
1.3pilot program and related regulations.
1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.5 Section 1. PUBLIC-PRIVATE PARTNERSHIP PILOT PROGRAM.
1.6(a) The commissioner of transportation and Metropolitan Council are authorized to
1.7consider and utilize public-private partnership procurement methods for up to three pilot
1.8projects as provided in this act. Utilization of public-private partnerships is a recognition
1.9of the importance to the state of an efficient and safe transportation system, and the
1.10necessity of developing alternative funding sources to supplement traditional sources of
1.11transportation revenues. A public-private partnership initiative must take advantage of
1.12private sector efficiencies in design and construction, along with expertise in finance and
1.13development, and provide a better long-term value for the state than could be obtained
1.14through traditional procurement methods.
1.15(b) Notwithstanding Minnesota Statutes, section 160.845, 160.98, or any other law
1.16to the contrary, the commissioner or council may consider for use in the pilot program any
1.17existing public-private partnership mechanism or any proposed mechanism that proves the
1.18best available option for the state. Mechanisms the commissioner or council may consider
1.19include, but are not limited to, toll facilities, BOT facilities, BTO facilities, user fees,
1.20construction payments, joint development agreements, negotiated exactions, air rights
1.21development, street improvement districts, or tax increment financing districts for transit.
1.22For the purposes of sections 1 to 6, toll facilities, BOT facilities, and BTO facilities have
1.23the meanings given under section 160.84.
2.1(c) As part of the pilot program, the commissioner and council are directed to form
2.2an independent advisory and oversight office, the Joint Program Office for Economic
2.3Development and Alternative Finance. The office shall consist of the commissioner of
2.4management and budget, the commissioner of employment and economic development,
2.5the commissioner of administration, the commissioner of transportation, the Metropolitan
2.6Council, and one representative each from the American Council of Engineering
2.7Companies - Minnesota chapter, the Central Minnesota Transportation Alliance, the
2.8Counties Transit Improvement Board, and the Minnesota County Engineers Association.
2.9In addition, the commissioner and Metropolitan Council shall invite the Federal Highway
2.10Administration and the Federal Transit Administration to participate in the office's
2.11activities. The office's duties shall include, but are not limited to, reviewing and approving
2.12projects proposed under this section, reviewing any contractual or financial agreements
2.13to ensure program requirements are met, and ensuring that any proposed or executed
2.14agreement serves the public interest.
2.15 Sec. 2. PILOT PROGRAM RESTRICTIONS AND PROJECT SELECTION.
2.16(a) The commissioner or council may receive or solicit and evaluate proposals to
2.17build, operate, and finance projects that are not inconsistent with the commissioner's most
2.18recent statewide transportation plan or the council's most recent transportation policy plan.
2.19If the department or council receives an unsolicited proposal, the department or council
2.20shall publish a notice in the State Register at least once a week for two weeks stating that
2.21the department or council has received the proposal and will accept, for 120 days after
2.22the initial date of publication, other proposals for the same project purpose. The private
2.23proposer must be selected on a competitive basis.
2.24(b) When entering into a public-private partnership, the commissioner or
2.25Metropolitan Council may not enter into any noncompete agreement that inhibits the
2.26state's ability to address ongoing or future infrastructure needs.
2.27(c) If the commissioner or council enters into a public-private partnership agreement
2.28that includes a temporary transfer of ownership or control of a road, bridge, or other
2.29infrastructure investment to the private entity, the agreement must include a provision
2.30requiring the return of the road, bridge, or other infrastructure investment to the state
2.31after a specified period of time.
2.32(d) The commissioner and council may only consider new projects for a
2.33public-private partnership. The commissioner and council are prohibited from considering
2.34projects involving existing infrastructure for a public-private partnership, unless the
2.35proposed project adds capacity to the existing infrastructure.
3.1(e) Among the projects the commissioner and council may consider are the
3.2construction of: an Interstate 94/US Highway 10 River Crossing near marked Minnesota
3.3Trunk Highway 24; the Fish Lake interchange; the marked Interstate 94 expansion from
3.4the Fish Lake interchange to marked Trunk Highway 24; the St. Croix River Crossing
3.5connecting Oak Park Heights, Minnesota, and St. Joseph, Wisconsin; and high-speed,
3.6commuter, and light rail projects.
3.7 Sec. 3. EVALUATION AND SELECTION OF PRIVATE ENTITY AND
3.8PROJECT.
3.9(a) The commissioner and council shall contract with one or more consultants to
3.10assist in proposal evaluation. The consultant must possess expertise and experience in
3.11public-private partnership project evaluation methodology, such as value for money,
3.12costs of public-private partnership compared with costs of public project delivery, and
3.13cost-benefit analysis.
3.14(b) When soliciting, evaluating, and selecting a private entity with which to enter
3.15into a public-private partnership and before selecting a project, the commissioner or
3.16council must consider:
3.17(1) the ability of the proposed project to improve safety, reduce congestion, increase
3.18capacity, and promote economic growth;
3.19(2) the proposed cost of and financial plan for the project;
3.20(3) the general reputation, qualifications, industry experience, and financial capacity
3.21of the private entity;
3.22(4) the project's proposed design, operation, and feasibility;
3.23(5) length and extent of transportation and transit service disruption;
3.24(6) comments from local citizens and affected jurisdictions;
3.25(7) benefits to the public;
3.26(8) the safety record of the private entity; and
3.27(9) any other criteria the commissioner or council deems appropriate.
3.28(c) The independent advisory and oversight office established under section 1,
3.29paragraph (c), shall review proposals evaluated by the commissioner or council to ensure
3.30the requirements of this section are being met. The independent advisory and oversight
3.31office shall first determine whether the project, as proposed, serves the public interest.
3.32In making this determination, the office must identify and consider advantages and
3.33disadvantages for various stakeholders, including taxpayers, workers, transportation and
3.34transit providers and operators, transportation and transit users, commercial vehicle
3.35operators, and the general public, including the impact on the state's economy. If the
4.1proposed project serves the public interest, the office must evaluate the proposals
4.2according to the criteria specified in this section.
4.3 Sec. 4. PUBLIC-PRIVATE AGREEMENT.
4.4(a) A public-private agreement between the commissioner or the council and a
4.5private entity shall, at a minimum, specify:
4.6(1) the planning, acquisition, financing, development, design, construction,
4.7reconstruction, replacement, improvement, maintenance, management, repair, leasing, or
4.8operation of the project;
4.9(2) the term of the public-private agreement;
4.10(3) the type of property interest, if any, that the private entity will have in the project;
4.11(4) a description of the actions the commissioner or council may take to ensure
4.12proper maintenance of the project;
4.13(5) whether user fees will be collected on the project and the basis by which the user
4.14fees shall be determined and modified along with identification of the public agency that
4.15will determine and modify fees;
4.16(6) compliance with applicable federal, state, and local laws;
4.17(7) grounds for termination of the public-private agreement by the commissioner
4.18or council;
4.19(8) adequate safeguards for the traveling public and residents of the state in event of
4.20default on the contract;
4.21(9) financial protection for the state in the event of default; and
4.22(10) procedures for amendment of the agreement.
4.23(b) A public-private agreement between the commissioner or council and a private
4.24entity may provide for:
4.25(1) review and approval by the commissioner or council of the private entity's plans
4.26for the development and operation of the project;
4.27(2) inspection by the commissioner or council of construction and improvements
4.28to the project;
4.29(3) maintenance by the private entity of a liability insurance policy;
4.30(4) filing of appropriate financial statements by the private entity on a periodic basis;
4.31(5) filing of traffic reports by the private entity on a periodic basis;
4.32(6) financing obligations of the commissioner or council and the private entity;
4.33(7) apportionment of expenses between the commissioner or council and the private
4.34entity;
4.35(8) the rights and remedies available in the event of a default or delay;
5.1(9) the rights and duties of the private entity, the commissioner or council, and other
5.2state or local governmental entities with respect to the use of the project;
5.3(10) the terms and conditions of indemnification of the private entity by the
5.4commissioner or council;
5.5(11) assignment, subcontracting, or other delegations of responsibilities of (i)
5.6the private entity, or (ii) the commissioner or council under agreement to third parties,
5.7including other private entities or state agencies;
5.8(12) if applicable, sale or lease to the private entity of private property related to
5.9the project;
5.10(13) traffic enforcement and other policing issues; and
5.11(14) any other terms and conditions the commissioner or council deems appropriate.
5.12(c) The independent advisory and oversight office established under section 1,
5.13paragraph (c), shall review any proposed contractual agreement prior to execution in
5.14order to ensure that the contract serves the public interest and the requirements of this
5.15section are met.
5.16 Sec. 5. FUNDING FROM FEDERAL GOVERNMENT.
5.17(a) The commissioner or council may accept from the United States or any of its
5.18agencies funds that are available to the state for carrying out the pilot program, whether
5.19the funds are available by grant, loan, or other financial assistance.
5.20(b) The commissioner or council may enter into agreements or other arrangements
5.21with the United States or any of its agencies as necessary for carrying out the pilot program.
5.22(c) The commissioner or council shall seek to maximize project funding from
5.23nonstate sources and may combine federal, state, local, and private funds to finance a
5.24public-private partnership pilot project.
5.25 Sec. 6. REPORTING.
5.26By August 1, 2015, and annually by August 1 thereafter, the commissioner
5.27and council shall submit to the chairs and ranking minority members of the house of
5.28representatives and senate committees having jurisdiction over transportation policy
5.29and finance a list of all agreements executed under the pilot program authority. The list
5.30must identify each agreement, the contracting entities, contract amount and duration, any
5.31repayment requirements, and provide an update on the project's progress. The list may be
5.32submitted electronically and is subject to Minnesota Statutes, section 3.195, subdivision 1.
5.33 Sec. 7. EFFECTIVE DATE.
6.1This act is effective the day after an appropriation is effective to pay administrative
6.2expenses creating and operating the Joint Program Office for Economic Development and
6.3Alternative Finance, hiring a consultant, and preparing required reports.
