MICHIGAN ALTERNATIVE PROJECT DELIVERY ACT:
PUBLIC-PRIVATE PARTNERSHIPS
Senate Bill 627 (passed by the Senate as S-2)
Sponsor: Sen. Mike Kowall
Senate Committee: Commerce
House Committee: Commerce and Trade
Complete to 12-7-16
SUMMARY:
The bill would create a new act, the "Michigan Alternative Project Delivery Act." In brief, it would do the following:
o Allow a public authority to enter into public-private agreements to develop eligible projects, enter into ancillary agreements to public-private agreements, and exercise eminent domain to acquire property necessary for an eligible project.
o Define "public authority" as the State of Michigan, a state department, or state agency.
o Define "public-private agreement as an agreement between a public authority and one or more private parties for the development of an eligible project. A public-private agreement may include one or more local units of government (i.e., a county, city, township, village, school district, intermediate school district, community college, and public university).
o Define "eligible project" to include either a "facility project" (buildings related to health care delivery or laboratories) or a "transportation project."
o Require a public authority to consider and compare various methods for developing a project and identify the proposed delivery method.
o Require a public authority to consult with the state Budget Director regarding the fiscal impact on affected state agencies when developing a project.
o Allow any lawful source of public and private funding to be used for the development of an eligible project under the proposed act.
o Allow a public authority to impose or increase and collect fees, including user fees.
o Authorize a public authority to include provisions addressing the allocation of project risk, payment terms, utilities, and other matters in a public-private agreement.
o Require a public authority to hold a public hearing not less than every five years after the completion of an eligible project to conduct a public review of the eligible project.
o Specify that authority granted under the act would supplement any existing authority.
o Prescribe a penalty for a person who failed to pay a user fee for use of an eligible project.
o Provide that property developed or held by a private party under a public-private agreement would be exempt from all state and local ad valorem and other property taxes that otherwise would be applicable.
o Specify that a public-private agreement would be subject to the Fair and Open Competition in Governmental Construction Act and the Local Government Labor Regulatory Limitation Act, as applicable.
o Specify that nothing in the proposed act would expand the type of asset or provision of type of services that a public authority would otherwise be authorized to develop under applicable existing law.
o Specify that the proposed act would not affect a public-private agreement entered into before the bill's effective date, or prohibit a public authority from using other legal authority to enter into a public-private agreement.
Without knowing how the new act will be employed by public and private enterprises, it is not possible to determine a fiscal impact at this time.
Legislative Analyst: Chris Couch
Fiscal Analyst: Jim Stansell
■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their deliberations, and does not constitute an official statement of legislative intent.