Substitute Senate Bill No. 920
Public Act No. 21-99
AN ACT CONCERNING PUBLIC -PRIVATE PARTNERSHIPS.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 4-255 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective from passage):
(a) As used in this section, [and] sections 4-256 to 4-263, inclusive, as
amended by this act, and section 3 of this act, unless the context indicates
a different meaning:
[(1) "State agency" or "agency" means any office, department, board,
council, commission, institution or other agency in the executive branch
of state government or a quasi-public agency as defined in section 1-
120;]
(1) "Department" means the Department of Transportation;
(2) "Private entity" means any individual, corporation, general
partnership, limited partnership, limited liability partnership, joint
venture, nonprofit organization or other business entity;
(3) "Public-private partnership" means the relationship established
between [a state agency] the department and a private entity by
contracting for the performance of any combination of specified Substitute Senate Bill No. 920
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functions or responsibilities to design, develop, finance, construct,
operate or maintain one or more state facilities; [where the agency has
estimated that the revenue generated by such facility or facilities, in
combination with other previously identified funding sources,
including any appropriated funds, will be sufficient to fund the cost to
develop, maintain and operate such facility or facilities, provided state
support of a partnership agreement shall not exceed twenty-five per
cent of the cost of the project;]
(4) "Partnership agreement" means an agreement executed between
[a state agency] the department and a private entity to establish a public-
private partnership;
(5) "Project" means a project that [an agency] the department has
submitted to the Governor for approval as a public-private partnership;
(6) "Contractor" means a private entity that has entered into a public-
private partnership agreement with [a state agency] the department;
(7) "Facility" means any [public works or] transportation project used
as public infrastructure; [that generates revenue as a function of its
operation; and]
(8) "Proposer" means a private entity submitting a competitive bid in
response to solicitation or a proposal in response to a request for
proposals for an approved project for consideration; [.] and
(9) "Consultant" has the same meaning as provided in section 13b-
20b.
(b) Notwithstanding the provisions of section 4b-51, once the project
is approved by the Governor in accordance with section 4-256, as
amended by this act, [any state agency] the department may establish
one or more public-private partnerships and execute a partnership
agreement for a project in accordance with this section and sections 4- Substitute Senate Bill No. 920
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256 to 4-263, inclusive, as amended by this act, and section 3 of this act.
A partnership agreement may not be established for the operation or
maintenance of a facility unless such agreement also provides for the
financing and development of such facility.
(c) The design, development, operation or maintenance of [the
following] new or existing project types involving transportation
systems, including transit-oriented development and related
infrastructure, are eligible for consideration as a public-private
partnership if approved as a project in accordance with section 4-256, as
amended by this act. [:
(1) Early childcare, educational, health or housing facilities;
(2) Transportation systems, including ports, transit-oriented
development and related infrastructure; and
(3) Any other kind of facility that may from time to time be
designated as such by an act of the General Assembly.]
Sec. 2. Section 4-256 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective from passage):
(a) On and after [October 27, 2011] the effective date of this section,
and prior to January 1, [2020] 2027, the Governor [shall] may approve
not more than five projects to be implemented as public-private
[partnership projects] partnerships. The Governor shall not approve any
such project unless the Governor finds that the project will result in job
creation and economic growth. [Any agency seeking to establish a
public-private partnership shall, after] After consultation with the
Commissioners of Economic and Community Development [,] and
Administrative Services, [and Transportation,] the State Treasurer and
the Secretary of the Office of Policy and Management, the department
may submit one or more projects to the Governor for approval. Substitute Senate Bill No. 920
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(b) In determining whether a project is suitable for a public-private
partnership agreement, the [agency] department shall conduct an
analysis of the feasibility, desirability and the convenience to the public
of the project and whether the project furthers the public policy goals of
section 4-255, as amended by this act, this section and sections 4-257 to
4-263, inclusive, as amended by this act, and section 3 of this act, taking
into consideration the following, when applicable:
(1) The essential characteristics of the proposed facility;
(2) The [projected] anticipated demand for use of the facility and its
economic and social impact on the community and the state;
(3) The technical function and feasibility of the project and its
conformity with the state plan of conservation and development
adopted under chapter 297;
(4) The benefit to [clients of the agency and the public as a whole] the
state and its citizens;
(5) An analysis of the value provided for the cost of the project, that
at a minimum includes a cost-benefit analysis, an assessment of
opportunity costs and any nonfinancial benefits of the project;
(6) Any operational or technological risk associated with the
proposed project;
(7) The cost of the investment to be made and the economic and
financial feasibility of the project;
(8) An analysis of public versus private financing on a present value
basis, and the eligibility of the project for other public funds from local
or federal government sources;
(9) The impact to the state's finances of undertaking the project by the
[agency] department; and Substitute Senate Bill No. 920
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(10) The advantages and disadvantages of using a public-private
partnership rather than having the [state agency] department perform
the function.
(c) [An agency] The department shall not [include] submit a project
to the Governor for approval for a public-private partnership solely
based upon the amount of potential revenue generated by such project.
(d) [Any agency submitting] If the department submits a project in
accordance with subsection (a) of this section, the department shall at
the same time transmit, in accordance with the provisions of section 11-
4a, a copy of its submission to the joint standing committees of the
General Assembly having cognizance of matters relating to finance,
revenue and bonding and appropriations and the budgets of state
agencies and transportation. Said committees shall hold public hearings
on any such submission.
(e) The Governor shall notify the [agency] department when a project
has been approved [as] for a public-private partnership. [project.]
(f) On or before January 15, [2013] 2022, and annually thereafter, the
[Governor] department shall report, in accordance with the provisions
of section 11-4a, to the General Assembly concerning the status of the
public-private partnerships established under this section.
Sec. 3. (NEW) (Effective from passage) (a) As used in this section,
"development and inspection services" has the same meaning as
described in subsection (a) of section 13a-95c of the general statutes.
(b) For any public-private partnership, the Commissioner of
Transportation shall make best efforts to perform development and
inspection services using, where such employees are available,
department employees and reducing, and where possible eliminating,
the dependency on consultants. Any contract the department enters into
with a consultant to perform development and inspection services with Substitute Senate Bill No. 920
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regards to a public-private partnership shall contain a provision that
provides for training department employees in the process for bidding
and managing public-private partnerships. Employees may be
appointed to durational positions to reduce the need for development
and inspection services to be performed by consultants. Such employees
may be appointed as engineers to durational positions without
examination provided such employees have met the education,
knowledge and training requirements required by the Department of
Administrative Services job classification.
(c) Not later than February first of each year following the
establishment of a public-private partnership, and annually thereafter,
the department, in consultation with representatives selected by the
exclusive bargaining agents of the department's employees, shall
submit a report, in accordance with the provisions of section 11-4a of the
general statutes, to the joint standing committee of the General
Assembly having cognizance of matters relating to transportation that
analyzes the progress of any public-private partnerships and the
performance of development and inspection services by any consultant.
If the report finds that a consultant is unable to complete such services
within the timeframe or amount budgeted as stated in the agreement
with the consultant, the department may terminate the agreement and
exercise any other rights and remedies that may be available to it at law
or in equity.
(d) Not later than six months after the completion of any public-
private partnership, the department, in consultation with
representatives selected by the exclusive bargaining agents of the
department's employees, shall submit a report, in accordance with the
provisions of section 11-4a of the general statutes, to the joint standing
committee of the General Assembly having cognizance of matters
relating to transportation that evaluates the effectiveness of the public-
private partnership and makes recommendations regarding the Substitute Senate Bill No. 920
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continued use of public-private partnerships.
Sec. 4. Section 4-257 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective from passage):
(a) Notwithstanding the provisions of section 4b-91 and chapter 242,
the [agency] department shall, when it determines appropriate, provide
for a process of prequalification for private entities seeking to enter a
public-private partnership. Any such process shall include public notice
of the prequalification process and the requirements and the criteria the
[agency] department will use in determining whether the private entity
qualifies for prequalification. [Any agency that] If the department has
determined that such a prequalification process is appropriate for the
project, the department shall allow only prequalified private entities to
be a proposer. The [agency] department may charge a reasonable
application fee for prequalification.
(b) In addition to any requirements set forth in the request for
proposals, request for qualifications or bid solicitation for a [public-
private partnership] project, in order to be prequalified, a private entity
shall:
(1) Have available such lawful sources of funding, capital, securities
or other financial resources that, in the judgment of the [agency]
department in consultation with the Department of Economic and
Community Development, are necessary to carry out the [public-private
partnership] project if such private entity is selected as the contractor;
(2) Possess either through its staff, subcontractors, a consortium or
joint venture agreement the managerial, organizational, technical
capacity and experience in the type of project for which the proposer is
submitting a bid proposal;
(3) Be qualified to lawfully conduct business in this state; and Substitute Senate Bill No. 920
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(4) Certify that no director, officer, partner, owner or other individual
with direct and significant control over the policy of the private entity
has been convicted of corruption or fraud in any jurisdiction of the
United States.
Sec. 5. Section 4-258 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective from passage):
(a) [Any agency seeking to enter into a public-private partnership]
The department shall conduct a competitive procurement process for
the selection of a contractor prior to entering a public-private
partnership. The [agency] department shall use, where appropriate, in
accordance with the nature and scope of the project, (1) competitive
bidding, as defined in section 4e-1, or (2) competitive negotiation, as
defined in section 4a-50.
(b) Prior to beginning a competitive procurement process in
accordance with subsection (a) of this section, [an agency] the
department may issue a request for information to obtain information
regarding potential [public-private partnership] projects.
(c) In conducting the competitive procurement process, the [agency]
department shall meet the following requirements in addition to the
requirements set forth in subsection (a) of this section:
(1) Contain, within the bid specifications, a detailed description of the
scope of the proposed [public-private partnership] project;
(2) Contain the material terms and conditions of the terms applicable
to the procurement and any contract that results;
(3) Provide public notice of the invitation to bid, request for proposal
or request for information not less than thirty days prior to the due date,
unless the [agency head] Commissioner of Transportation makes a
written determination that a lesser time period is appropriate and will Substitute Senate Bill No. 920
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preserve the competitive nature of the procurement; and
(4) Publish the evaluation and selection criteria and [shall] include a
determination of which proposals best serve the public purpose of
sections 4-255 to 4-263, inclusive, as amended by this act, and section 3
of this act.
(d) The [agency] department may pay a stipend to an unsuccessful
proposer, in an amount and on the terms and conditions determined by
the [agency] department as reasonable, if (1) the [agency] department
cancels the procurement process less than thirty days prior to the date
the bid or proposal is due, or (2) the unsuccessful proposer submits a
proposal that is responsive and meets all the requirements established
by the [agency] department for the [public-private partnership] project.
The [agency] department may require the proposer to grant the [agency]
department the right to use any work product contained in any
unsuccessful proposal, or in the event of a cancelled procurement as set
forth in this section, any work product developed prior to cancellation,
including designs, processes, technologies and information. All
conditions for a stipend shall be clearly set forth in the request for
information, bid solicitation, request for proposal or request for
qualifications.
(e) The [agency] department may retain financial, legal and other
consultants and experts to assist in the procurement, evaluation and
negotiation of public-private partnerships and for the development of
eligible facilities in accordance with sections 4-255 to 4-263, inclusive, as
amended by this act, and section 3 of this act. Such services may be
procured through a contract with a private entity or with another state
agency.
Sec. 6. Section 4-259 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective from passage): Substitute Senate Bill No. 920
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(a) Any partnership agreement executed in accordance with the
provisions of sections 4-255 to 4-263, inclusive, as amended by this act,
and section 3 of this act, shall include, but not be limited to, the following
terms and conditions:
(1) The term of the agreement, which shall be for a period not to
exceed fifty years from the date of the full execution of the partnership
agreement;
(2) A complete description of the facility to be developed and the
functions to be performed;
(3) The terms of the financing, development, design, improvement,
maintenance, operation and administration of the facility;
(4) The rights the state, the contractor, or both, have, if any, in revenue
from the financing, development, design, improvement, maintenance,
operation or administration of the facility;
(5) The minimum quality standards applicable to the project for
development, design, improvement, maintenance, operation or
administration of the facility, including performance criteria, incentives
and disincentives;
(6) The compensation of the contractor, including the extent to which
and the terms upon which a contractor may charge fees to individuals
and entities for the use of the facility, but in no event shall such fee
extend to the imposition of tolls on the highways of this state unless such
tolls are specifically approved by the General Assembly;
(7) The furnishing of an annual independent audit report to the
[agency] department covering all aspects of the partnership agreement;
(8) Performance and payment bonds or other security deemed
suitable by the [agency] department; Substitute Senate Bill No. 920
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(9) One or more policies of public liability insurance in such amounts
determined by the [agency] department to ensure coverage of tort
liability for the public and employees of the contractor and to provide
for the continued operation of the [partnership] project;
(10) A reverter of the project to the state upon the conclusion or
termination of the partnership agreement;
(11) The rights and remedies available to the [agency] department for
a material breach of the partnership agreement by the contractor or
private entity or if there is a material default;
(12) Identification of funding sources to be used to fully fund the
capital, operation, maintenance or other expenses under the agreement;
and
(13) Any other provision determined to be appropriate by the
[agency] department.
(b) No partnership agreement shall contain any noncompete
provisions limiting the ability of the state to perform its functions.
(c) No user fees may be imposed by the contractor except as set forth
in a partnership agreement.
(d) The partnership agreement shall not be construed as waiving the
sovereign immunity of the state or as a grant of sovereign immunity to
the contractor or any private entity.
(e) No contractor shall be liable for the debts or obligations of the state
or the [agency] department, unless the partnership agreement provides
that such contractor is liable under such agreement.
Sec. 7. Section 4-260 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective from passage): Substitute Senate Bill No. 920
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The [state agency] department or the state may apply for and accept
funds from local or federal government and other sources of financial
aid to further the purposes of sections 4-255 to 4-263, inclusive, as
amended by this act, and section 3 of this act, and to fund public-private
partnerships entered into in accordance with said sections.
Sec. 8. Section 4-261 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective from passage):
(a) Each [public-private partnership] project shall either be subject to
the prevailing wage requirements pursuant to section 31-53 or the rate
established by the use of a project labor agreement. The [agency]
department shall provide notice of which requirement applies prior to
soliciting bids or proposals for such [public-private partnership] project.
(b) Each [public-private partnership] project shall comply with: (1)
The state's environmental policy requirements as set forth in sections
22a-1 and 22a-1a, (2) the requirements of the set-aside program for small
contractors as set forth in section 4a-60g, and (3) any applicable
permitting or inspection requirements for projects of a similar type,
scope and size as set forth in the general statutes or the local ordinances
of the municipality where the project is to be located.
(c) [Any agency that is subject to section 4e-16] The department shall
comply with the provisions of section 4e-16, provided, notwithstanding
the provisions of subsection (a) of section 4e-16, [any agency that] if the
department enters into a partnership agreement concerning the
operations or maintenance of a state facility that meets the definition of
a privatization contract, as defined in section 4e-1, the department shall
be subject to the requirements of section 4e-16 regardless of whether
such services are currently privatized.
Sec. 9. Section 4-262 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective from passage): Substitute Senate Bill No. 920
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(a) In addition to any other remedy available to the state, in the event
of a material default by the contractor, the state may elect to assume the
responsibilities and duties of the contractor of the [public-private
partnership] project, and in such case, the state shall succeed to all of the
rights, title and interest in such [partnership] project, subject to any liens
on revenue previously granted by the contractor to any person
providing financing thereof.
(b) [Any state agency having the power of condemnation under state
law] The department may exercise [such] the power of condemnation to
acquire the [public-private partnership] project in the event of a material
default by the contractor. Any person who has provided financing for
the [public-private partnership] project, and the contractor, to the extent
of its capital investment, may participate in the condemnation
proceedings with the standing of a property owner.
(c) The [agency] department may terminate, with cause, the
partnership agreement and exercise any other rights and remedies that
may be available to it at law or in equity.
(d) The state may make or cause to be made any appropriate claims
under the maintenance, performance or payment bonds, or lines of
credit, as set forth in the partnership agreement.
(e) In the event the state elects to assume the responsibility and duties
of a [partnership] project pursuant to subsection (a) of this section, the
[agency] department may develop or operate the [public-private
partnership] project, impose user fees, impose and collect lease
payments for the use thereof and comply with any service contracts as
if it were the contractor. Any revenue that is subject to a lien shall be
collected for the benefit of and paid to secured parties, as their interests
may appear, to the extent necessary to satisfy the contractor's
obligations to secured parties, including the maintenance of reserves.
Such liens shall be correspondingly reduced and, when paid off, Substitute Senate Bill No. 920
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released. Before any payments to, or for the benefit of, secured parties,
the [agency] department may use revenue to pay current operation and
maintenance costs of the qualifying project, including compensation to
the [agency] department for its services in operating and maintaining
the [public-private partnership] project. The right to receive such
payment, if any, shall be considered just compensation for the project.
The full faith and credit of the [agency] department shall not be pledged
to secure any financing of the contractor by the election to take over such
project. The assumption of the operation of the [partnership] project
shall not obligate the [agency] department to pay any obligation of the
contractor from sources other than revenue.
Sec. 10. Section 4-263 of the general statutes is repealed and the
following is substituted in lieu thereof (Effective from passage):
Any state property developed, operated or held by a private entity
pursuant to a partnership agreement shall be exempt from municipal
property tax.