HB1424

SECTION 1. The Legislature makes the following findings:

(1) It is important for the economic, social, and environmental well-being of the State and the maintenance of a high quality of life that the people of the State have an efficient transportation system.

(2) The ability of the State to provide an efficient transportation system can be enhanced by a public-private sector program providing for private entities to undertake all or a portion of the study, planning, design, development, financing, acquisition, installation, construction, improvement, operation, or maintenance of transportation systems and facility projects.

(3) A public-private program will provide benefits to both the public and private sectors. Public-private initiatives provide a sound economic investment opportunity for the private sector. Such initiatives provide the State with increased options to develop the State's infrastructure and can supplement state transportation revenues.

This Act is intended to achieve the following goals through public-private partnerships:

(1) Provide a well-defined mechanism to facilitate the collaboration and creative cost and risk sharing in transportation projects between the public and private partners;

(2) Bring innovative thinking from the private sector to bear on transportation needs within the State and access specialized development, financing, design, construction management, operations, management services and techniques available in the private sector;

(3) Reduce the public cost of project delivery and services for eligible facilities;

(4) Expedite project delivery;

(5) Encourage private investment in public infrastructure;

(6) Use funding sources, where financially advantageous and in the public interest;

(7) Encourage life cycle efficiencies in transportation projects;

(8) Foster flexibility in procurement to provide the best value to the State for eligible facilities under this Act;

(9) Provide better use and leverage of public resources and savings to taxpayers, by increasing private investment in public facilities and enhancing capital formation for large projects;

(10) Develop eligible facilities with the cooperation, consultation, and support of the affected communities and county jurisdictions;

(11) Solicit, evaluate, negotiate, and administer public-private agreements with the private sector relating to the planning, financing, development, design, construction, upgrading, reconstruction, operation or maintenance of transportation systems and facilities; and

(12) Obtain assistance in the development of these transportation systems and facilities from federal programs administered by the United States Department of Transportation.

The legislature intends that the powers granted to the state department of transportation and other agencies in this Act are in addition to any other powers authorized under applicable law.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

PUBLIC-PRIVATE PARTNERSHIP IN TRANSPORTATION

§ -A Definitions. Whenever used in this chapter, unless the context otherwise requires:

"Department" means the state department of transportation.

"Eligible facility" means any facility developed, operated or held in accordance with this chapter, including any existing, enhanced, upgraded, or new facility used or useful for the safe transport of people or goods via one or more modes of transport, whether involving highways, railways, monorails, transit, bus systems, guided rapid transit, ferries, boats, vessels, inter-modal or multi-modal systems, or any other mode of transport, as well as facilities, structures, parking, rail yards or storage facilities, vehicles, rolling stock, or other equipment, items or property related thereto.

"Private partner" means a person, entity, or organization that is not the federal government, the State, a county, or a unit of government.

"Public-private partnership agreement" means any binding agreement transferring rights for the use or control, in whole or in part, of an eligible facility by the department or other unit of government to a private partner in accordance with this chapter.

"Public-private partnerships in transportation program" or "program" means the program as provided in this chapter.

"Unit of government" means any department or agency of the State, any department or agency of a county, any public corporation established under state law or county ordinance, or any intergovernmental agency or corporation.

§ -B Rules and guidelines. The department shall adopt, amend, or repeal rules as it determines necessary to effectuate this chapter. The rules adopted pursuant to chapter 91 shall have the force and effect of law.

§ -C Project delivery methods. The department is authorized to provide for the development or operation of eligible facilities using a variety of project delivery methods and forms of agreement. Such methods may include a wide range of possibilities, including without limitation:

(1) Pre-development agreements leading to other implementing agreements;

(2) A design-build agreement;

(3) A design-build-maintain agreement;

(4) A design-build-finance-operate agreement;

(5) A design-build-operate-maintain agreement;

(6) An agreement providing for the private partner to design, build, operate, maintain, manage or lease an existing, enhanced, upgraded, or new facility;

(7) Such other project delivery method or agreement or combination of methods or agreements as in the determination of the department will serve the public interest.

§ -D Procurement. (a) The department is authorized to procure services under this chapter using any of the following:

(1) Calls for project proposals;

(2) Solicitations using, without limitation, requests for qualifications, short-listing of qualified proposers, requests for proposals, negotiations, best and final offers or other procurement procedures;

(3) Unsolicited proposals, provided that if the department determines there is sufficient merit to pursue any unsolicited proposal, the department shall provide reasonable opportunity for other entities to submit competing proposals;

(4) Request for proposals from the private sector for development and finance plans most suitable for the project,

(5) Best value selection request for proposals based upon price financial proposals, or other factors; and

(6) Such other procedures as the department determines may further the intent of this Act.

(b) When the department issues a request for qualifications, request for proposals, or similar solicitation document, the request shall generally set forth the factors that will be evaluated and the manner in which responses will be evaluated.

(c) In evaluating proposals, the department may accord such relative weight to factors such as cost; financial commitment; innovative financing; technical, scientific, technological, or socio-economic merit; and other factors as the department deems appropriate to obtain the best value for the State.

(d) The department may charge a reasonable administrative fee for the evaluation of an unsolicited project proposal.

(e) The department may procure services, award agreements, administer revenues, and generate exemptions as authorized in this chapter notwithstanding any requirements of other state law or rule or county ordinance or rule relating to public bidding or other procurement procedures or other provisions otherwise applicable to public works, services, or utilities.

(f) The department may retain financial, legal, and other consultants and experts inside and outside the public sector to assist in the evaluation, negotiation, and development of eligible facilities under this chapter.

(g) The department may spend such moneys as may be reasonably necessary for the development and evaluation of concepts or proposals, negotiation of agreements and implementation of agreements for the development or operation of eligible facilities under this chapter.

§ -E Public-private partnership agreements. (a) In any public-private partnership agreement for any eligible facility under this chapter, the department is authorized to include, without limitation, provisions:

(1) Authorizing the private partner to collect user fees, tolls, fares, or similar charges, including, without limitation, provisions:

(A) Specifying the technology to be used in the facility;

(B) Establishing circumstances under which the department may receive a share of revenues from such charges; and

(C) Governing enforcement of tolls, including provisions for use of cameras or other mechanisms to ensure that users pay tolls that are due and provisions allowing the private partner access to relevant state and county databases to the extent necessary to collect and enforce tolls;

(2) Allowing for payments to be made by the State to the private partner, including but not limited to availability payments or performance-based payments;

(3) Allowing the department to accept payments of money and share revenues with the private partner;

(4) Addressing the method of sharing risk management and insurance for the project;

(5) Specifying the method of sharing the costs of development of the project;

(6) Allocating financial responsibility for cost overruns;

(7) Establishing the damages to be assessed for nonperformance;

(8) Establishing performance criteria or incentives or both;

(9) Addressing the acquisition of rights-of-way and other property interests that may be required, including provisions addressing the exercise of eminent domain as provided in section –I of this chapter;

(10) Establishing recordkeeping, accounting, and auditing standards to be used for the project;

(11) For a project that reverts to public ownership, addressing responsibility for reconstruction or renovations required for a facility to meet all applicable government standards upon reversion of the facility to public ownership;

(12) Providing for patrolling and law enforcement on public facilities;

(13) Identifying any department specifications that must be satisfied, including provisions allowing the private partner to request and receive authorization to deviate from such specifications on making a showing of need satisfactory to the department;

(14) Requiring a private partner to provide performance and payment bonds, parent company guarantees, letters of credit, and/or other acceptable forms of security, the penal sum or amount of which may be less than one hundred per cent of the value of the contract involved based upon the department's determination, made on a facility-by-facility basis, of what is required to adequately protect the State;

(15) Authorizing the private partner in a partnership agreement under this chapter to collect user fees, tolls, fares, or similar charges to cover its costs and provide for a reasonable rate of return on the private partner's investment including, without limitation, the following provisions:

(A) That the charges may be collected directly by the private partner or by a third party engaged for that purpose;

(B) A formula for the adjustment of user fees, tolls, fares, or similar charges during the term of the agreement;

(C) For an agreement that does not include such a formula, provisions regulating the private partner's return on investment; or

(D) A list of variety of traffic management strategies, including without limitation:

(i) General purpose toll lanes;

(ii) High occupancy vehicle lanes where single or low occupancy vehicles may "buy-in" to use higher occupancy vehicle lanes by paying a toll;

(iii) Lanes or facilities where the tolls may vary during the course of the day or week or according to levels of congestion anticipated or experienced; or

(iv) Such combinations of, or variations on, the foregoing, or other strategies, as the department may determine appropriate on a facility-by-facility basis; or

(16) Specifying remedies available and dispute resolution procedures, including but not limited to the right of the private partner to institute legal proceedings to obtain an enforceable judgment or award against the department in the event of a default by the department, and procedures for use of dispute review boards, mediation, facilitated negotiation, arbitration, and other alternative dispute resolution procedures.

(b) The department is authorized to enter into agreements with any private partner which includes provisions as described in section -E(a) notwithstanding any other provision of state law or rule or county ordinance or rule.

(c) The department may approve any request from and authorize another unit of government to procure, fund, develop, operate, or maintain an eligible facility in a manner similar to that authorized for the department under this Act.

(d) With the prior approval of the governor, notwithstanding any other provision of state law or rule, an agreement under this chapter may exempt activities of a private partner directly related to, or income directly derived from, property developed, operated or held by a private partner under a partnership agreement pursuant to this chapter from any and all taxes under Title 14, for a period not to exceed ten years from the date of execution of the partnership agreement.

§ -F Funding and financing. (a) The department may, in connection with providing for the development or operation of an eligible facility, allow funding from any lawful source, including without limitation:

(1) The proceeds of grant anticipation revenue bonds authorized by 23 United States Code section 122 or any other applicable federal or state law;

(2) Grants, loans, loan guarantees, lines of credit, revolving lines of credit, or other arrangements available under the Transportation Infrastructure Finance and Innovation Act under 23 United States Code section 181 or any other federal or state law;

(3) Federal, state, or county revenues;

(4) User fees, tolls, fares, charges, lease proceeds, rents, availability payments, gross or net receipts from sales, proceeds from the sale of development rights, franchise fees, permit fees, or any other lawful form of consideration;

(5) Private activity bonds as described by 26 United States Code section 142(a)(15) and other forms of private capital; and

(6) Such other forms of public and private capital as may be available.

(b) As security for the payment of financing described in this section, the revenues from the project may be pledged, but no such pledge of revenues shall constitute in any manner or to any extent a general obligation of the State or any county. Any financing may be structured on a senior, parity, or subordinate basis to any other financing.

(c) The department, and another unit of government authorized by the department, may issue toll revenue bonds to provide funds for any project under this chapter.

(d) The department may accept from the United States or any of its agencies such funds as are available to this State or to any other unit of government for carrying out the purposes of this chapter, whether the funds are made available by grant, loan, or other financing arrangement. The department may enter into such agreements and other arrangements with the United States or any of its agencies as may be necessary, proper, and convenient for carrying out the purposes of this chapter.

(e) The department 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 State, the department, or another unit of government for carrying out the purposes of this chapter.

(f) Any eligible facility may be funded in whole or in

part by contribution of any funds or property made by any private entity or public sector partner that is a party to any agreement entered into under this chapter.

(g) Federal, state, and county funds may be combined with

any private sector funds for any project purposes, notwithstanding any other provision of state law or rule or county ordinance or rule.

§ -G Confidentiality and public disclosure. A proposer shall identify those portions of a proposal or other submission that the proposer considers to be trade secrets or confidential commercial, financial, or proprietary information. The identified information shall be withheld from public disclosure to the extent permitted by chapter 92F.

§ -H Federal laws. If no federal funds are used on an eligible facility, the laws of this State, including this chapter, shall govern. Notwithstanding any provisions of this chapter, if federal funds are used on an eligible facility and applicable federal statutes or regulations conflict with this chapter or require provisions or procedures inconsistent with this chapter, the applicable federal statutes or regulations shall govern."

SECTION 3. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________

BY REQUEST

HOUSE OF REPRESENTATIVES	H.B. NO.	1424
TWENTY-FOURTH LEGISLATURE, 2007
STATE OF HAWAII