SB1450 - 502R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Title 41, Arizona Revised Statutes, is amended by adding chapter 20, to read:

CHAPTER 20

PUBLIC-PRIVATE PARTNERSHIPS

ARTICLE 1. GENERAL PROVISIONS

START_STATUTE41‑2351. Definitions

In this chapter, unless the context otherwise requires:

1. "Concession" means any lease, ground lease, franchise, easement, permit or other binding agreement transferring rights for the use or control, in whole or in part, of public infrastructure by the unit of government to a private partner in accordance with this chapter.

2. "Private partner" means a person, entity or organization that is not the federal government, this state, a political subdivision of this state or a unit of government.

3. "Public infrastructure" means any of the following improvements that will result in a beneficial use principally to land within the geographical limits of the unit of government, whether newly constructed, renovated or existing, and all necessary or desirable appurtenances:

(a) Sanitary sewage systems, including collection, transport, storage, treatment, dispersal, effluent use and discharge.

(b) Drainage and flood control systems, including collection, transport, diversion, storage, detention, retention, dispersal, use and discharge.

(c) Water systems for domestic, industrial, irrigation, municipal or fire protection purposes, including production, collection, storage, treatment, transport, delivery, connection and dispersal, but not including facilities for agricultural irrigation purposes unless for the repair or replacement of existing facilities when required by other improvements permitted by this chapter.

(d) Pedestrian malls, parks, recreational facilities other than stadiums, and open space areas for the use of the public for entertainment, assembly and recreation.

(e) Landscaping, including earthworks, structures, lakes and other water features, plants, trees and related water delivery systems.

(f) Public buildings, public safety facilities and fire protection facilities.

(g) Lighting systems.

(h) Solar energy plants or systems.

(i) Equipment, vehicles, furnishings and other personalty related to the items listed in this paragraph.

4. "Unit of government" means any department or agency of this state or a county, city or town organized and existing under statutory law. END_STATUTE

START_STATUTE41-2352. Public-private partnerships

a. a state department or agency or any county, city or town may enter into a partnership with a private entity for public infrastructure.

b. ANY unit of government that ENTERS INTO A PARTNERSHIP WITH A PRIVATE ENTITY SHALL:

1. CLEARLY DEFINE THE AGREEMENT IN WRITING, PRESCRIBING IN DETAIL THE SPECIFIED RESPONSIBILITIES AND BENEFITS OF EACH PARTY.

2. DISCLOSE IN THE AGREEMENT ANY CONTRIBUTIONS, WHETHER IN CASH OR IN KIND, MADE BY A unit of government to A PRIVATE PARTNER.

3. OBTAIN APPROVAL OF THE PUBLIC-PRIVATE PARTNERSHIP AGREEMENT FROM THE APPROPRIATE LEGISLATIVE COMMITTEE OR, IF A county, city or town, THE APPROPRIATE GOVERNMENT OVERSIGHT COMMITTEE.

4. POST THE SIGNED AGREEMENT ON THE unit of government's WEBSITE.

C. A PUBLIC-PRIVATE PARTNERSHIP AGREEMENT SHALL BE FOR A PRESCRIBED PERIOD OF TIME THAT DOES NOT EXCEED thirty YEARS. ANY RENEWAL OF A PUBLIC‑PRIVATE PARTNERSHIP AGREEMENT MUST BE APPROVED BY THE APPROPRIATE LEGISLATIVE COMMITTEE OR, IF A county, city or town, BY THE APPROPRIATE GOVERNMENT OVERSIGHT COMMITTEE.

D. PRIVATE PARTNERS IN A PUBLIC-PRIVATE PARTNERSHIP AGREEMENT SHALL NOT LOBBY OR PROVIDE INFORMATION TO THE LEGISLATURE REGARDING THE AGREEMENT UNLESS REQUESTED BY THE LEGISLATURE. END_STATUTE

START_STATUTE41‑2353. Project delivery methods

The unit of government shall provide for the development or operation of public infrastructure using a variety of project delivery methods and forms of agreement, including any of the following:

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. A design‑build‑finance‑operate‑maintain agreement.

7. A concession providing for the private partner to design, build, operate, maintain, manage or lease a public infrastructure.

8. Any other project delivery method or agreement or combination of methods or agreements that the unit of government determines will serve the public interest. END_STATUTE

START_STATUTE41‑2354. Public-private partnership agreements

A. In any public-private partnership or other agreement for any public infrastructure under this chapter, the unit of government may include provisions that:

1. Authorize the unit of government or the private partner to collect user fees, rents, advertising and sponsorship fees, service fees or similar charges, including provisions that:

(a) Specify technology to be used in the infrastructure.

(b) Establish circumstances under which the unit of government may receive all or a share of revenues from such charges.

(c) Authorize the unit of government to continue or cease collection of user fees or similar charges after the end of the term of the agreement.

2. Allow the unit of government to make payments to the private partner, including availability payments or performance based payments.

3. Allow the unit of government to accept payments of monies and share revenues with the private partner.

4. Address how the partners will share management of the risks of the project.

5. Specify how the partners will share 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 or incentives, or both.

9. Address the acquisition of rights-of-way and other property interests that may be required, including provisions that address the exercise of eminent domain as provided in section 41‑2357. The unit of government shall not relinquish its power of eminent domain authority to the private partner.

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 that are required in order for the infrastructure to meet all applicable government standards on reversion of the infrastructure to the unit of government.

12. Identify any unit of government specifications that must be satisfied, including provisions allowing the private partner to request and receive authorization to deviate from the specifications on making a showing satisfactory to the unit of government.

13. Require a private partner to provide performance and payment bonds, parent company guarantees, letters of credit or other acceptable forms of security, or a combination of any of these, the penal sum or amount of which may be less than one hundred per cent of the value of the contract involved based on the unit of government's determination, made on a facility‑by‑facility basis, of what is required to adequately protect the unit of government.

14. Authorize the private partner in any concession agreement to collect user fees, rents, advertising and sponsorship fees, service fees or similar charges to cover its costs and provide for a reasonable rate of return on the private partner's investment, including the following provisions:

(a) 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, rents, advertising and sponsorship fees, service fees or similar charges during the term of the agreement.

(c) For an agreement that does not include a formula described in subdivision (b) of this paragraph, provisions regulating the private partner's return on investment.

15. Specify remedies available and dispute resolution procedures, including the right of the private partner to institute legal proceedings to obtain an enforceable judgment or award against the unit of government in the event of a default by the unit of government and procedures for use of dispute review boards, mediation, facilitated negotiation, arbitration and other alternative dispute resolution procedures.

16. Allow the unit of government to acquire real property that is needed for and related to public infrastructure, including acquisition by exchange for other real property that is owned by the unit of government.

B. Notwithstanding any other law, the unit of government may enter into agreements, whether a concession agreement or other form of agreement, with any private partner that includes provisions described in subsection A of this section. Agreements may be for a term not to exceed thirty years but may be extended for additional terms.

C. Notwithstanding any other law, agreements that are properly developed, operated or held by a private partner under a concession agreement pursuant to this chapter are exempt from all state and local ad valorem and property taxes that otherwise might be applicable.

D. The agreement shall contain a provision by which the private partner expressly agrees that it is barred from seeking injunctive or other equitable relief to delay, prevent or otherwise hinder the unit of government from developing or constructing any public infrastructure that was planned at the time the public-private partnership agreement was executed and that would or might impact the revenue that the private partner would or might derive from the infrastructure developed under the agreement. END_STATUTE

START_STATUTE41‑2355. Funding and financing

A. Any lawful source of funding may be used for the development or operation of public infrastructure under this chapter, including federal, state or local revenues or other available forms of public and private capital.

B. As security for the payment of financing described in this section, the revenues from the project may be pledged, but no pledge of revenues constitutes in any manner or to any extent a general obligation of this state or other unit of government. Any financing may be structured on a senior, parity or subordinate basis to any other financing.

C. The unit of government 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 this state, the department or a local government for carrying out this chapter.

D. Any public infrastructure may be funded in whole or in part by contribution of any monies or property made by any private entity or public sector partner that is a party to any agreement entered into under this chapter.

E. Notwithstanding any other law, federal, state and local monies may be combined with any private sector monies for any project purposes.

F. Revenue bonds issued pursuant to this section are not general obligations of this state or other unit of government and are not secured by or payable from any monies or assets of this state or other unit of government other than the monies and revenues specifically pledged to the repayment of the revenue bonds. END_STATUTE

START_STATUTE41‑2356. Confidentiality and public disclosure; executive summary

A. 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. In order for confidential and proprietary information and trade secrets to be exempt from disclosure, the private entity must do all of the following:

1. Invoke exclusion on submission of the information or other materials for which protection is sought.

2. Identify with conspicuous labeling the data or other materials for which protection is sought.

3. State the reasons why protection is necessary.

4. Fully comply with any applicable state law with respect to information that the proposer contends should be exempt from disclosure.

B. Each request for proposals issued pursuant to this chapter shall require each proposer to include with its proposal an executive summary covering the major elements of its proposal that do not address the proposer's price, financing plan or other confidential or proprietary information or trade secrets that the proposer intends to be exempt from disclosure. The executive summary shall be subject to release and disclosure to the public at any time. Notwithstanding any other law, in order to maximize competition under this chapter, no part of a proposal other than the executive summary may be subject to release or disclosure by the unit of government before an award of the public-private partnership contract and the conclusion of any protest or other challenge to the award, absent an administrative or judicial order requiring release or disclosure. After the award of the contract and the conclusion of any protest or other challenge to the award, title 39 applies to any release of any part of the proposal. END_STATUTE

START_STATUTE41‑2357. Eminent domain

A unit of government may exercise the power of eminent domain to acquire property, rights-of-way or other rights in property for projects that are necessary to develop, operate or hold public infrastructure under this chapter, regardless of whether the property will be owned in fee simple by this state or will be leased to the private partner to use, lease or operate for its business purposes in connection with the public-private partnership project. END_STATUTE

START_STATUTE41‑2358. Federal laws

If no federal monies are used on a public infrastructure, the laws of this state, including this chapter, govern. Notwithstanding any other provision of this chapter, if federal monies are used on a public infrastructure and applicable federal laws conflict with this chapter or require provisions or procedures inconsistent with this chapter, the applicable federal laws govern. END_STATUTE