SB3181

SECTION 1. 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

§ -1 Definitions. Whenever used in this chapter, unless the context otherwise requires:

"Department" means the state department of transportation.

"Toll facility" means any highway, road, bridge, tunnel, overpass, street, or other facility, as well as appurtenant structures, parking, rail yards, or storage facilities, vehicles, rolling stock, or other equipment, items, or property related thereto, developed, operated, or held in accordance with this chapter and used or useful for the safe transport of persons or goods and upon which or in relation to which a toll or fee is charged for the use of vehicular traffic.

"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 a toll 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 public corporation established under state law or county ordinance, or any intergovernmental agency or corporation.

§ -2 Rules. 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.

§ -3 Project delivery methods. The department may provide for the development or operation of toll facilities using a variety of project delivery methods and forms of agreement. Such methods may include without limitation:

(1) Predevelopment 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; and

(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.

§ -4 Posting of conceptual proposals; public comment; public access to procurement records. (a) Conceptual proposals submitted in accordance with this chapter to a unit of government shall be posted by the responsible unit of government within thirty working days after acceptance of the proposals in accordance with chapter 103D. In addition to the posting requirements, at least one copy of each proposal shall be made available for public inspection. Nothing in this section shall be construed to prohibit the posting of the conceptual proposals by additional means to provide maximum notice to the public of the opportunity to inspect the proposals. Prior to posting or otherwise disclosing the conceptual proposal, the responsible public entity may redact information from the conceptual proposal to the extent permitted by chapter 92F.

(b) In addition to the posting requirements of subsection (a), for thirty days prior to entering into an interim or comprehensive agreement, the responsible unit of government shall provide an opportunity for public comment on the proposals. The public comment period required by this subsection may include a public hearing in the sole discretion of the responsible unit of government.

(c) Once an interim agreement or a comprehensive agreement has been entered into, the responsible unit of government shall make procurement records available for public inspection, upon request. For the purposes of this subsection, procurement records shall not be interpreted to include trade secrets or confidential information which may be withheld from public disclosure under chapter 92F.

(d) This section shall apply to accepted proposals regardless of whether the process of bargaining will result in an interim or a comprehensive agreement.

(e) A responsible unit of government and any independent review panel appointed to review information and advise the responsible unit of government may hold a meeting closed to the public for the purpose of considering records exempt from disclosure; provided that the meetings are held in accordance with the procedural requirements of sections 92-4 and 92-5.

§ -5 Public-private partnership agreements. (a) In any public-private partnership agreement for any toll facility under this chapter, the department may:

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

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

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

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

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

(6) Allocate financial responsibility for cost overruns;

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

(8) Establish performance criteria, incentives, or both;

(9) Address the acquisition of rights-of-way and other property interests that may be required, including provisions addressing the exercise of eminent domain;

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

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

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

(13) Identify any department specifications that must be satisfied, including 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) Require a private partner to provide performance and payment bonds, parent company guarantees, letters of credit, and 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) Authorize 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 various 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) Any combinations of, or variations on, the foregoing, or other strategies, that the department may determine appropriate on a facility-by-facility basis;

and

(16) Specify 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 may enter into agreements with any private partner that includes provisions as described in subsection (a) notwithstanding any other provision of state law or rule or county ordinance or rule.

§ -6 Fines; toll evaders. The department shall adopt rules in accordance with chapter 91 to establish fines for any motorist who violates this chapter by evading the payment of an appropriate levied toll on any toll highway built, operated, owned, or financed under this chapter.

§ -7 Police powers; violations of law. (a) All police officers and other law enforcement officers having police powers of the State and of each affected county shall have the same powers and jurisdiction within the limits of the toll facility that they have in their respective areas of jurisdiction, and these officers shall have access to the toll facility at any time for the purpose of exercising their powers and jurisdiction. This authority shall not extend to the private offices, buildings, garages, and other improvements of the private partner to any greater degree than the police power applies to any other private buildings and improvements.

(b) To the extent the facility is a road, bridge, tunnel, overpass, or similar transportation facility for motor vehicles, the traffic and motor vehicle laws of the State or, if applicable, any county jurisdiction, shall be the same as those applying to conduct on similar transportation facilities in the state or a county. Punishment for offenses shall be as prescribed by law for conduct occurring on similar transportation facilities in the state or a county.

§ -8 Funding and financing. (a) The department may, in connection with providing for the development or operation of a toll 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;

(6) The county surcharge on state tax under section 46-16.8 for qualifying counties; and

(7) Any 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 any other 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 any funds that are available to the 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 toll facility may be funded in whole or in

part by contribution of any funds or property made by any private partner 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 regulation.

§ -9 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.

§ -10 Federal laws. If no federal funds are used on a toll facility, the laws of the State, including this chapter, shall govern. Notwithstanding any provisions of this chapter, if federal funds are used on a toll 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. Section 46-16.8, Hawaii Revised Statutes, is amended to read as follows:

"§46‑16.8 County surcharge on state tax. (a) Each county may establish a surcharge on state tax at the rates enumerated in sections 237‑8.6 and 238‑2.6. A county electing to establish this surcharge shall do so by ordinance; provided that:

(1) No ordinance shall be adopted until the county has conducted a public hearing on the proposed ordinance;

(2) The ordinance shall be adopted prior to December 31, [~~2005~~] 2008; and

(3) No county surcharge on state tax that may be authorized under this section shall be levied prior to January 1, 2007.

Notice of the public hearing required under paragraph (1) shall be published in a newspaper of general circulation within the county at least twice within a period of thirty days immediately preceding the date of the hearing.

(b) A county electing to exercise the authority granted under this section shall notify the director of taxation within ten days after the county has adopted a surcharge on state tax ordinance and, beginning no earlier than January 1, 2007, the director of taxation shall levy, assess, collect, and otherwise administer the county surcharge on state tax.

(c) Each county with a population greater than five hundred thousand that adopts a county surcharge on state tax ordinance pursuant to subsection (a) shall [~~use the surcharges received from the State for:~~

~~(1)~~ ~~Operating or capital costs of a locally preferred alternative for a mass transit project; and~~] allow the surcharges to be retained by the State for use by the State for:

(1) Operating or capitol costs of a toll facilities project within that respective county with a population greater than five hundred thousand; and

(2) Expenses in complying with the Americans with Disabilities Act of 1990 with respect to paragraph (1).

[The county surcharge on state tax shall not be used to build or repair public roads or highways, bicycle paths, or support public transportation systems already in existence prior to the effective date of this Act.]

(d) Each county with a population equal to or less than five hundred thousand that adopts a county surcharge on state tax ordinance pursuant to subsection (a) shall use the surcharges received from the State for:

(1) Operating or capital costs of public transportation within each county for public transportation systems, including public roadways or highways, public buses, trains, ferries, pedestrian paths or sidewalks, or bicycle paths; and

(2) Expenses in complying with the Americans with Disabilities Act of 1990 with respect to paragraph (1).

(e) As used in this section, "capital costs" means nonrecurring costs required to construct a transit or toll facility or system, including debt service, costs of land acquisition and development, acquiring of rights-of-way, planning, design, and construction, and including equipping and furnishing the facility or system."

SECTION 3. Section 248-2.6, Hawaii Revised Statutes, is amended to read as follows:

"[§248-2.6] County surcharge on state tax; disposition of proceeds. (a) If adopted by county ordinance, all county surcharges on state tax collected by the director of taxation shall be paid into the state treasury quarterly, within ten working days after collection, and shall be placed by the director of finance in special accounts. Out of the revenues generated by county surcharges on state tax paid into each respective state treasury special account, the director of finance shall deduct ten per cent of the gross proceeds of a respective county's surcharge on state tax to reimburse the State for the costs of assessment, collection, and disposition of the county surcharge on state tax incurred by the State. Amounts retained shall be general fund realizations of the State.

(b) The amounts deducted for costs of assessment, collection, and disposition of county surcharges on state tax shall be withheld [~~from payment to the counties~~] by the State out of the county surcharges on state tax collected for the current calendar year.

(c) For the purpose of this section, the costs of assessment, collection, and disposition of the county surcharges on state tax shall include any and all costs, direct or indirect, that are deemed necessary and proper to effectively administer this section and sections 237-8.6 and 238-2.6.

(d) After the deduction and withholding of the costs under subsections (a) and (b), the director of finance shall [~~pay~~]:

(1) Pay the remaining balance on [[]a[]] quarterly basis to the director of finance of each county with a population equal to or less than five hundred thousand that has adopted a county surcharge on state tax under section 46-16.8. The quarterly payments shall be made after the county surcharges on state tax have been paid into the state treasury special accounts or after the disposition of any tax appeal, as the case may be. [~~All county~~] County surcharges on state tax collected in each county with a population equal to or less than five hundred thousand shall be distributed by the director of finance to the county in which the county surcharge on state tax is generated and shall be a general fund realization of the county, to be used for the purposes specified in section [~~46-16.8~~] 46-16.8(d) [~~by each of the counties~~].

(2) Transfer the remaining balance on a quarterly basis to the department of transportation on behalf of each county with a population greater than five hundred thousand that has adopted a county surcharge on state tax under section 46-16.8, to be used for the purposes specified in section 46-16.8(c). The quarterly transfers shall be made after the county surcharges on state tax have been paid into the state treasury special accounts or after the disposition of any tax appeal, as the case may be. County surcharges on state tax collected in each county with a population greater than five hundred thousand shall be used by the director of transportation within the county in which the county surcharge on state tax is generated."

SECTION 4. Act 247, Session Laws of Hawaii 2005, is amended by amending section 9 to read as follows:

"SECTION 9. This Act shall take effect upon its approval; provided that:

(1) If none of the counties of the State adopt an ordinance to levy a county surcharge on state tax by December 31, 2005, this Act shall be repealed and section 437D‑8.4, Hawaii Revised Statutes, shall be reenacted in the form in which it read on the day prior to the effective date of this Act;

(2) If any county does not adopt an ordinance to levy a county surcharge on state tax by December 31, 2005, it shall be prohibited from adopting such an ordinance pursuant to this Act, unless otherwise authorized by the legislature through a separate legislative act;

(3) If an ordinance to levy a county surcharge on state tax is adopted by December 31, 2005:

(A) The ordinance shall be repealed on [~~December 31, 2022;~~] July 1, 2018;

(B) This Act shall be repealed on [~~December 31, 2022;~~] July 1, 2018; and

(C) [~~Section~~] On July 1, 2018, section 437D‑8.4, Hawaii Revised Statutes, shall be reenacted in the form in which it read on the day prior to the effective date of this Act."

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	3181
TWENTY-FOURTH LEGISLATURE, 2008
STATE OF HAWAII