December 1, 2015, Introduced by Senator KOWALL and referred to the Committee on Commerce.
A bill to authorize this state and 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 any existing, enhanced, expanded,
rehabilitated, refurbished, upgraded, or new asset or portion of an
asset or services or provision of services under the jurisdiction
and control of this state or any of its agencies, political
subdivisions, special districts, public corporations established
under state law, regional or local governmental entities, joint
powers authorities, or any intergovernmental agency or corporation.
This includes, without limitation, any facility, asset, or service
and associated services that serve a public purpose, any capital or
financial asset, real estate or facility used directly or
indirectly in the transportation of persons, and the transportation
or storage of goods, substances, vehicles, information, or matter
of any kind, or in the generation and transport of energy, or the
transport and treatment of water, wastewater, and waste, and any
building, structure, and appurtenance, or other real property or
information or management system necessary or desirable for the
delivery of government functions, or health care, education,
justice, security, or entertainment services.
(c) "Predevelopment agreement" means an agreement between a
public authority and 1 or more private parties, pursuant to a
competitive process, to perform activities that may include, but
are not limited to, the study, planning, and design of an eligible
project that may lead to a public-private agreement to develop an
eligible project.
(d) "Private party" means a person, entity, or organization
that is not this state or the federal government, a political
subdivision of this state, a local unit of government, or any other
public authority.
(e) "Public authority" means this state, a political
subdivision of this state, a county, city, township, village,
school district, intermediate school district, community college,
or public university that receives appropriations from this state,
any agency, board, commission, authority, or instrumentality of an
entity described in this subdivision, or any 2 or more of the
foregoing working together to develop an eligible project.
(f) "Public-private agreement" means an agreement between a
public authorities and 1 or more private parties for the
development of an eligible project under this act. Public-private
agreement also includes a predevelopment agreement.
(g) "User fees" means user fees, tolls, consumption charges,
rents, license fees, or similar or ancillary charges from users of
eligible projects. User fees also include fees and charges for
maintaining and administering an account, including credit card,
bank, and similar fees and charges.
(h) "Work product" means any technical or financial concepts,
including 1 or more of the following:
(i) Included in a bidder's response to a request for
qualifications or any portion of the bidder's response or in a
bidder's proposal or any portion of the proposal.
(ii) Submitted by the bidder for review by the public
authority in accordance with the public authority's request for
qualifications or request for proposals.
(iii) Raised by the bidder at 1-on-1 meetings or alternative
technical or financial concepts meetings with the public authority
prior to the due date for proposals, and in each case includes 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.
(iv) Raised in any negotiations between the public authority
and a bidder prior to award and execution of a public-private
agreement.
Sec. 5. A public authority is authorized to 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 governments.
(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, 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 under this act, 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 the private party in connection with the development of the
eligible project through the public-private agreement.
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 is authorized to 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, whereby the public authority
describes the eligible project that private parties are invited
through a competitive process to submit proposals to develop the
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 entities 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 shall 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 is authorized to 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, including
1 or more of the following:
(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 unsuccessful 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 project.
(c) To the selected bidder if the public authority cancels the
eligible project after selection of the bidder.
(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 proposer's 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 section, a
writing prepared, owned, used, in the possession of, or retained by
the public authority in the performance of an official function
shall be a public record and shall 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 shall not be 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. A record or portion of a
record, material, or other data received, prepared, used, or
retained by the public authority that is a trade secret or
confidential commercial, financial, or proprietary information and
acknowledged by the public authority as confidential shall not be
subject to the disclosure requirements of the freedom of
information act, 1976 PA 442, MCL 15.231 to 15.246. A bidder may
identify those portions of a proposal or other submission that the
bidder considers to be trade secrets or confidential commercial,
financial, or proprietary information. In order for confidential
and proprietary information and trade secrets to be exempt from
disclosure, the bidder shall do all of the following:
(a) Invoke the exclusion upon submission of the information or
other materials for which protection is sought.
(b) Identify the data or other materials for which protection
is sought with conspicuous labeling.
(c) State the reasons why protection is necessary.
(d) Fully comply with any applicable provisions of law with
respect to information the bidder contends should be exempt from
disclosure.
(9) The characterization by the private party of documents as
being confidential and proprietary information and trade secrets
exempt from disclosure is not binding upon the public authority if
the documents are not afforded that protection under this act or
existing law.
Sec. 9. (1) Any lawful source of public and 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. Public authorities may also elect in their
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. Public authorities may
elect in their 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, or offer
revenue protection guarantees, as determined by the public
authority in its discretion.
(3) The public authority may accept from the United States,
any state, or any of their respective agencies, or from any
regional or local governmental entity, funds or credit assistance
as are 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. The public authority may
enter into these arrangements and other agreements with the United
States, any state, or any of their respective agencies, or with any
regional or local governmental entity, as may be necessary, proper,
and convenient for carrying out the purposes of this act. The
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 such sources and make funds available to 1 or
more private parties either directly or through other public
authorities.
(4) The 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) Public authorities may impose and collect user fees,
increase the user fees, and use lawful measures to enforce the user
fees or authorize, pursuant to a public-private agreement or
otherwise, a private party or another public entity 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 use, application, and sharing of collected user fees
shall be determined by the public authority or the private party
shall be as determined by the public authority in its discretion.
User fees may be imposed, charged, and collected by manual,
digital, or electronic means, including by video, transponder, tag,
camera, and any other suitable technology or means. The 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, 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 exclusively by revenue received from a
public-private agreement shall not be considered a debt of this
state. Any financing may be structured on a senior, parity, or
subordinate basis with any other financing or funding.
(7) Public authorities may impose or increase and collect fees
and, subject to applicable law, taxes to support the development of
the eligible project.
Sec. 11. (1) Notwithstanding any other provision of law, the
public authority is authorized to include in a public-private
agreement any provision that the public authority determines is
necessary or appropriate. A public-private agreement may include 1
or more of the following provisions:
(a) Provisions addressing the allocation and management of
project risks including without limitation 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, which may include without limitation 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 prime 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 the
foregoing, 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 right to
operate the lands and 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
construction and operation 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 public authority and the private party. Such
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 providing for compensation of the private party
upon early termination of the public-private agreement.
(l) Provisions specifying events of default and remedies
available to the private party and the public authority.
(m) Provisions setting forth the technical standards and
specifications with which the private party must comply.
(n) Provisions that provide requirements for insurance with
the coverages and deductibles as determined by the public authority
to be appropriate in its discretion.
(o) Provisions regarding the maintenance and auditing of the
private party's books and records.
(2) Except as otherwise provided in this subsection, 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. However, the term
of the public-private agreement may be extended as a result of
force majeure or as a means to compensate a private party for an
event or occurrence set out in the public-private agreement which
entitles them to additional compensation or funds from the public
authority.
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 supersedes all conflicting laws.
(3) Public contracting and procurement laws that restrict or
limit, or prescribe terms for, procurement or contracting under
this act shall not apply if they affect application of
environmental, health, safety, labor, and land use laws.
(4) If a public authority that is this state or an agency of
this state intends to be a party to a public-private agreement
under this act for the real property lease or construction of an
eligible project that otherwise would be subject to the management
and budget act, 1984 PA 431, MCL 18.1101 to 18.1594, the public
authority shall submit a proposed project summary for the eligible
project to the senate and house appropriations committees for
review. If both appropriations committees fail to reject by
resolution the proposed project summary within 30 calendar days of
the date it is submitted, the procurement may continue and any
awarded public-private agreement may be submitted to the state
administrative board for approval. A proposed project summary may
be resubmitted to the senate and house appropriations committees if
rejected.
Sec. 15. Property developed or held by a private party under a
public-private agreement shall be exempt from any and all state and
local ad valorem and property taxes that otherwise might be
applicable.
Sec. 16. (1) A public authority may impose user fees as
provided in section 9(5).
(2) Except as otherwise provided in this subsection, the
imposition of user fees for the use of an eligible project is not
subject to regulation by any other governmental agency. 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, a person who fails to pay a user fee imposed for use of
an eligible project authorized by a public-private agreement is
liable for, and shall pay, 3 times the amount of the user fee. In
addition to other rights and remedies available to a public
authority or a private entity under a public-private agreement, if
the required sum remains unpaid for 180 days after the person's use
of the eligible project, the government agency, or a private entity
authorized to do so by the government agency, may bring a civil
action against the person to collect the unpaid user fees in a
court having jurisdiction. If the civil action results in a
judgment for unpaid charges, the defendant shall also be required
to reimburse the plaintiff for all costs of enforcement and
collection, including filing and legal fees.
(4) During the period that a person owes and has failed to pay
user fees for a transportation facility under subsection (3), the
person and a motor vehicle used by the person may be barred from
using the transportation facility.
(5) Except as provided in section 675b of the Michigan vehicle
code, 1949 PA 300, MCL 257.675b, involving leased vehicles, proof
that a particular vehicle used a transportation facility without
payment of the applicable user fee, together with proof from the
department of state of the name of the vehicle's registered owner,
creates a presumption that the vehicle's registered owner was the
person who used the transportation facility, who failed to pay the
user fee, and who is prima facie responsible for the unpaid user
fees. If the conditions of section 675b of the Michigan vehicle
code, 1949 PA 300, MCL 257.675b, are satisfied, the lessee or
renter of a motor vehicle and not the leased vehicle owner is the
person liable under this section, for which purposes the entity
that gives notice of unpaid user fees to the vehicle's registered
owner shall be given the notice that would otherwise be given to
the clerk of the court or parking violations bureau under section
675b of the Michigan vehicle code, 1949 PA 300, MCL 257.675b.