1Amending Title 62 (Procurement) of the Pennsylvania Consolidated
2Statutes, providing for public-private partnerships, for
3prerequisite for operation, for approval by responsible local
4agency, for service contracts, for affected local
5jurisdictions, for dedication of public property, for powers
6and duties of operator, for comprehensive agreement, for
7Federal, State and local assistance, for material default and
8remedies, for condemnation and for utility crossing; imposing
9duties on the Pennsylvania Public Utility Commission; and
10providing for governmental immunity, for procurement, for use
11of intellectual property and for regulations.

12The General Assembly of the Commonwealth of Pennsylvania
13hereby enacts as follows:

14Section 1. Title 62 of the Pennsylvania Consolidated
15Statutes is amended by adding a chapter to read:

16CHAPTER 47

17LOCAL AGENCY PUBLIC-PRIVATE PARTNERSHIPS

18FOR WATER AND SEWER PROJECTS

19Sec.

204701. Definitions.

214702. Unsolicited submission of public-private partnership
22agreement proposals to local agency.

14703. Solicitation of proposals for public-private partnership
2agreements.

34704. Evaluation and selection of public-private partnership
4agreement proposal.

54705. Implementation of public-private partnership agreement.

64706. Service contracts.

74707. Affected local jurisdictions.

84708. Dedication of public property.

94709. Powers and duties of operator.

104710. Federal, State and local assistance.

114711. Material default and remedies.

124712. Utility crossing.

134713. Governmental immunity.

144714. Special approval.

154715. Exclusivity.

164716. Use of intellectual property.

174717. Applicability.

184718. Regulations.

19§ 4701. Definitions.

20The following words and phrases when used in this chapter
21shall have the meanings given to them in this section unless the
22context clearly indicates otherwise:

23"Affected local jurisdiction." A political subdivision in
24which all or a portion of a qualifying project is located.

25"Commission." The Pennsylvania Public Utility Commission.

26"Department." The Department of General Services of the
27Commonwealth.

28"Eligible project." A building or facility used for public
29water supply or treatment, storm water treatment and disposal or
30waste treatment and disposal.

1"Lease payment." A form of payment, including a land lease,
2by a local agency to the operator for the use of an eligible
3project.

4"Local agency." A county, city, borough, incorporated town,
5township, county institution, local authority or a joint or
6cooperative body of local agencies or an instrumentality,
7authority or corporation thereof which has authority to enter
8into a contract.

9"Material default." A default by the operator in the
10performance of its duties under section 4709(e) (relating to
11powers and duties of operator) which jeopardizes adequate
12service to the public from a qualifying project.

13"Operator." The private entity that is responsible for an
14eligible project or a portion of an eligible project, including
15acquisition, design, construction, improvement, renovation,
16expansion, equipping, maintenance and operation.

17"Private entity." An individual, corporation, limited
18liability company, partnership, joint venture or other private
19business entity.

20"Public-private partnership agreement." An agreement between
21a local agency and a private entity which involves the
22development or operation, or combination thereof, of an eligible
23project by the private entity. The agreement may consist of the
24following:

25(1) Predevelopment agreements leading to other
26implementing agreements.

27(2) A design-build agreement.

28(3) A design-build-operate agreement.

29(4) A design-build-maintain agreement.

30(5) A design-build-finance-operate agreement.

1(6) A design-build-operate-maintain agreement.

2(7) A design-build-finance-operate-maintain agreement.

3(8) An operate-maintain agreement.

4(9) A concession providing for the private entity to
5design, build, operate, maintain, manage or lease an eligible
6project.

7(10) Any other delivery method or agreement or
8combination of methods or agreements that the local agency
9determines will address the needs of the Commonwealth and the
10public entity and serve the public interest.

11"Revenue." Any of the following generated by an eligible
12project:

13(1) A user fee.

14(2) A lease payment.

15(3) A service payment.

16"Service payment." Payment to the operator of an eligible
17project pursuant to a public-private partnership agreement.

18"User fee." The rate or other charge imposed by the operator
19of an eligible project for use of the eligible project pursuant
20to a public-private partnership agreement.

21§ 4702. Unsolicited submission of public-private partnership
22agreement proposals to local agency.

23(a) Unsolicited request for approval.--A private entity may
24request consideration and approval of a proposed public-private
25partnership agreement for an eligible project. The request may
26be submitted to the applicable local agency, and any proposal
27under this section shall not be approved unless the local agency
28follows procedures outlined in sections 4703 (relating to
29solicitation of proposals for public-private partnership
30agreements) and 4704 (relating to evaluation and selection of

1public-private partnership agreement proposal). A request shall
2be accompanied by the following material and information unless
3waived by the local agency:

4(1) A topographic map of 1:2,000 or other appropriate
5scale indicating the location of the qualifying project.

6(2) A description of the eligible project, including the
7conceptual design of the facility or a conceptual plan for
8the provision of services and a schedule for the initiation
9of and completion of the eligible project to include the
10proposed major responsibilities and timeline for activities
11to be performed by both the local agency and private entity.

12(3) A statement setting forth the method by which the
13private entity proposes to secure a necessary property
14interests required for the eligible project. The statement
15shall include the following:

16(i) The names and addresses, if known, of the
17current owners of the property needed for the eligible
18project.

19(ii) The nature of the property interests to be
20acquired.

21(4) Information relating to the current plans for
22development of facilities to be used by a local agency that
23are similar to the eligible project being proposed by the
24private entity of each affected local jurisdiction.

25(5) A list of all permits and approvals required for the
26eligible project from Federal, State or political
27subdivisions and a projected schedule for obtaining the
28permits and approvals.

29(6) A list of any public utility facilities that may be
30crossed by the eligible project and a statement of the plans

1of the operator to accommodate the crossings.

2(7) A statement setting forth the private entity's
3general plans for financing the eligible project, including
4the sources of the private entity's funds.

5(8) The names and addresses of the persons who may be
6contacted for further information concerning the request.

7(9) User fees, lease payments and other service payments
8included in the comprehensive agreement, including frequency
9of assessments and the methodology and circumstances for
10changes to the user fees, lease payments and other service
11payments.

12(10) Any additional material and information as the
13local agency may reasonably request.

14§ 4703. Solicitation of proposals for public-private
15partnership agreements.

16(a) Solicitation of proposals.--A local agency may issue a
17request for proposals for public-private partnerships for an
18eligible project. Subject to the provisions of this section, the
19procedure for the request for proposals shall be the same
20provisions of procurement law otherwise applicable to the local
21agency.

22(b) Availability to general public.--Copies of a request for
23proposals shall be made available to any interested person
24residing within the affected local jurisdiction upon request to
25the local agency. A local agency may establish procedures for
26the distribution of a request for proposals, including the
27imposition of a fee to reimburse the public entity for the costs
28of photocopying and mailing.

29(c) Receipt of proposals.--Offerors shall submit their
30sealed proposals to ensure that they are received prior to the

1time and date established for receipt of the proposals. Sealed
2proposals shall be submitted in the format required by the local
3agency. Sealed proposals shall be opened so as to avoid
4disclosure of their contents to competing offerors.

5(d) Fee.--The local agency may charge a reasonable fee to
6cover the costs of processing, reviewing and evaluating the
7request, including reasonable attorney fees and fees for
8financial and other necessary advisers or consultants.

9§ 4704. Evaluation and selection of public-private partnership
10agreement proposal.

11(a) Evaluation criteria.--A local agency shall evaluate each
12proposal to determine which one, if any, has the best value for
13and is in the best interest of the local agency. In making this
14determination, a local agency may consider any of the following:

15(1) Cost.

16(2) Price.

17(3) Financial commitment.

18(4) Innovative financing.

19(5) Bonding.

20(6) Technical, scientific, technological or
21socioeconomic merit.

22(7) Financial strength and viability.

23(8) Design, operation and feasibility of the eligible
24project.

25(9) Public reputation, qualifications, industry
26experience and financial capacity of the private entity.

27(10) The compatibility of the proposal with existing
28local and regional land use plans.

29(11) The commitment of local communities to approve land
30use plans in preparation for the project.

1(12) Other factors deemed appropriate by the local
2agency.

3(b) Weighted consideration.--The relative importance of each
4evaluation factor shall be fixed prior to opening the proposals.

5(c) Discussion with responsible offerors and revision of
6proposals.--As provided in the request for proposals,
7discussions and negotiations may be conducted with responsible
8offerors for the purpose of clarification and of obtaining best
9and final offers. Responsible offerors shall be accorded fair
10and equal treatment with respect to any opportunity for
11discussion and revision of proposals. In conducting discussions,
12there shall be no disclosure of any information derived from
13proposals submitted by competing offerors.

14(d) Selection for negotiation.--The responsible offeror
15whose proposal is determined in writing to be the best value for
16and in the best interests of the local agency and the general
17public, taking into consideration all evaluation factors, shall
18be selected for contract negotiation.

19(e) Cancellation.--A request for proposals may be canceled
20at any time prior to the time a partnership contract is executed
21by all parties when it is in the best interests of the local
22agency.

23(f) Award.--Upon reaching an agreement with a selected
24offeror, the local agency shall enter into a public-private
25partnership agreement with the offeror. The public-private
26partnership agreement shall be consistent with the requirements
27of this chapter. If agreement cannot be reached with the
28selected offeror, then negotiations shall be formally terminated
29with the offeror. If proposals were submitted by one or more
30other responsible offerors, negotiations may be conducted with

1the other offeror or offerors in the order of their respective
2qualification ranking. The contract may be awarded to the
3responsible offeror then ranked as best qualified.

4(g) Resolution of controversies.--If a private entity is
5aggrieved by a selection under this section and the proprietary
6local agency in the contract is an entity other than the
7Commonwealth, an offeror may file a claim with the court of
8common pleas where the proprietary local agency is located. The
9process for the filing and resolution of claims, including
10rights, contents, timing, evaluation, determination and
11remedies, which are established in Chapter 17 shall apply
12insofar as they are practicable.

13§ 4705. Implementation of public-private partnership agreement.

14(a) Final approval.--The approval of the local agency is
15contingent upon the private entity's agreement to enter into a
16comprehensive partnership contract with the local agency.

17(b) Partnership contracts.--Prior to acquiring, designing,
18constructing, improving, renovating, expanding, equipping,
19maintaining or operating the eligible project, the private
20entity shall enter into a comprehensive partnership contract
21detailing the public-private partnership agreement with the
22local agency. The partnership contract shall provide for all of
23the following:

24(1) Delivery of maintenance, performance and payment
25bonds or letters of credit in connection with the
26acquisition, design, construction, improvement, renovation,
27expansion, equipping, maintenance or operation of the
28eligible project, in the forms and amounts satisfactory to
29the responsible local agency.

30(2) Review of plans and specifications for the eligible

1project by the local agency and approval by the local agency
2if the plans and specifications conform to standards
3acceptable to the local agency. This paragraph may not
4require the private entity to complete design of an eligible
5project prior to the execution of a comprehensive contract.

6(3) Inspection of the eligible project by the
7responsible local agency to ensure that the operator's
8activities are acceptable to the local agency in accordance
9with the comprehensive agreement.

10(4) Maintenance of a policy of liability insurance,
11copies of which shall be filed with the local agency
12accompanied by proofs of coverage, self-insurance, in form
13and amount satisfactory to the responsible local agency and
14reasonably sufficient to insure coverage of tort liability to
15the public and employees and to enable the continued
16operation of the qualifying project.

17(5) Monitoring of the practices of the operator by the
18local agency to ensure that the eligible project is properly
19maintained.

20(6) Reimbursement to be paid to the local agency for
21services provided by the local agency.

22(7) Filing of appropriate financial statements on a
23periodic basis.

24(8) Policies and procedures governing the rights and
25responsibilities of the local agency and the operator in the
26event the comprehensive contract is terminated or there is a
27material default by the operator. The policies and procedures
28shall include conditions governing assumption of the duties
29and responsibilities of the operator by the local agency and
30the transfer or purchase of property or other interests of

1the operator by the local agency.

2(c) Fees.--The partnership contract may provide for a user
3fee, lease payment or service payment. A copy of a service
4contract must be filed with the local agency. When negotiating a
5user fee under this section, the parties shall establish
6payments or fees that are the same for a person using the
7facility under like conditions and that will not materially
8discourage use of the eligible project. The execution of the
9partnership contract or an amendment to the partnership contract
10constitutes conclusive evidence that the user fee, lease payment
11or service payment provided for complies with this chapter. A
12user fee or lease payment established in the partnership
13contract as a source of revenue may be in addition to or in lieu
14of a service payment.

15(d) Grants or loans.--In the partnership contract, the local
16agency may agree to make a grant or loan to the operator from an
17amount received from the Federal or State government or a
18political subdivision or from one of their agencies or
19instrumentalities.

20(e) Duties.--The partnership contract shall incorporate the
21duties of the operator under this chapter and may contain other
22terms and conditions that the local agency determines serve the
23public purpose under section 4704(d) (relating to evaluation and
24selection of public-private partnership agreement proposal). The
25partnership contract may contain any of the following:

26(1) Provisions under which the local agency agrees to
27provide notice of default and right to cure for the benefit
28of the operator and the persons specified in the notice as
29providing financing for the eligible project.

30(2) Other lawful terms and conditions to which the

1operator and the local agency mutually agree, including
2provisions regarding unavoidable delays or provisions
3providing for a loan of public funds to the operator to
4acquire, design, construct, improve, renovate, expand, equip,
5maintain or operate one or more eligible projects.

6(3) Provisions under which the authority and duties of
7the operator under this chapter shall cease and the eligible
8project is dedicated to the local agency or, if the eligible
9project was initially dedicated by an affected local
10jurisdiction, to the affected local jurisdiction for public
11use.

12(f) Amendments.--Change in the terms of the partnership
13contract, as may be agreed upon by the parties, shall be added
14by written amendment.

15(g) Date.--In connection with its approval of the eligible
16project, the responsible local agency shall establish a date for
17the commencement of activities related to the eligible project.
18The local agency may extend the date.

19(h) Public access.--Any documents created by or provided to
20a local agency under this chapter shall be subject to inspection
21and copying only to the extent required under the act of
22February 14, 2008 (P.L.6, No.3), known as the Right-to-Know Law.

23(i) Debt capacity.--A partnership contract entered into
24under this chapter shall not enlarge, diminish or affect the
25authority otherwise possessed by the local agency to take action
26that would impact the debt capacity of the Commonwealth or any
27of its political subdivisions.

28§ 4706. Service contracts.

29In addition to any authority conferred by statute, a local
30agency may contract with an operator for the delivery of

1services to be provided as part of an eligible project in
2exchange for service payment and other consideration as the
3local agency may deem appropriate.

4§ 4707. Affected local jurisdictions.

5(a) Notification.--A private entity submitting a proposal to
6a local agency under section 4703 (relating to solicitation of
7proposals for public-private partnership agreements) shall
8notify each affected local jurisdiction by furnishing a copy of
9its request or proposal to each affected local jurisdiction.

10(b) Comments.--Each affected local jurisdiction that is not
11the applicable local agency for the respective eligible project
12shall, within 60 days after receiving the notice, submit any
13comments it may have in writing on the proposed eligible
14project to the applicable local agency and indicate whether the
15facility is compatible with the local ordinance requirements and
16other local requirements. The comments shall be given
17consideration by the local agency prior to entering a public-
18private partnership agreement with a private entity.

19§ 4708. Dedication of public property.

20A local agency may dedicate any property interest, including
21land, improvements and tangible personal property, that it has
22for public use in an eligible project if it finds that doing so
23will serve the public purpose under section 4704(a) (relating to
24evaluation and selection of public-private partnership agreement
25proposal) by minimizing the cost of an eligible project to the
26local agency or reducing the delivery time of a qualifying
27project. In connection with the dedication, a local agency may
28convey any property interest that it has, subject to the
29conditions imposed by law, to the operator, subject to the
30provisions of this chapter, for consideration as the local

1agency may determine.

2§ 4709. Powers and duties of operator.

3(a) Powers.--The operator shall have the power under
4existing law to a private entity having the same form of
5organization as the operator and shall have the power to
6acquire, design, construct, improve, renovate, maintain, expand,
7equip or operate the eligible project and collect lease
8payments, impose a user fee or enter into a service contract in
9connection with the use of its power.

10(b) Right.--The operator may own, lease or acquire any other
11right to use or operate the eligible project.

12(c) Financing.--

13(1) Notwithstanding paragraph (2), any financing of the
14eligible project may be in an amount and upon terms and
15conditions as may be determined by the operator.

16(2) The operator may issue debt, equity or other
17securities or obligations, enter into sale and leaseback
18transactions and secure any financing with a pledge of,
19security interest in or lien on any or all of its property,
20including all of its property interests in the eligible
21project.

22(d) Operation.--In operating the eligible project, the
23operator may do all of the following:

24(1) Make classifications according to reasonable
25categories for assessment of user fees.

26(2) With the consent of the local agency, make and
27enforce reasonable rules to the same extent that the local
28agency may make and enforce rules with respect to similar
29facilities.

30(e) Duties.--The operator shall do the following:

1(1) Acquire, design, construct, improve, renovate,
2expand, equip, maintain or operate the eligible project in
3accordance with the public-private partnership agreement.

4(2) Keep the eligible project open for use by members of
5the public at all times or as appropriate based upon the use
6of the facility after its initial opening upon payment of the
7applicable user fee, lease payment or service payment except
8that the eligible project may be temporarily closed because
9of emergencies or with the consent of the local agency, to
10protect the safety of the public or for reasonable
11construction or maintenance procedures as set forth under the
12public-private partnership agreement.

13(3) Maintain or provide by contract for the maintenance
14of the eligible project, if required by the public-private
15partnership agreement.

16(4) Cooperate with the local agency in making best
17efforts to establish any interconnection with the eligible
18project requested by the local agency.

19(5) Comply with the public private-partnership agreement
20and any service contract.

21(f) Additional services.--This section does not prohibit an
22operator of an eligible project from providing additional
23services for the eligible project to local agencies or private
24entities other than the local agency if the provision of
25additional service does not impair the operator's ability to
26meet its commitments to the local agency under the comprehensive
27agreement.

28§ 4710. Federal, State and local assistance.

29The local agency may obtain assistance from the Federal or
30State government or one of its political subdivisions for an

1eligible project in accordance with the purposes under section
24704 (relating to evaluation and selection of public-private
3partnership agreement proposal) and may enter into a contract in
4order to receive the assistance. The local agency may pay a
5portion of the costs of an eligible project directly or
6indirectly from the proceeds of a grant or loan made by the
7Federal or State government or one of its political
8subdivisions.

9§ 4711. Material default and remedies.

10(a) General rule.--If there is a material default by the
11operator of an eligible project, the local agency may assume the
12responsibilities and duties of the operator, in which case it
13shall succeed to any right, title and interest in the eligible
14project, subject to any liens on revenue previously granted by
15the operator to any person providing financing.

16(b) Condemnation.--A local agency which is a party to a
17partnership contract, and which has the power of condemnation
18under State law, may exercise the power of condemnation to
19acquire the eligible project in the event of a material default
20by the operator. A person who has provided financing for the
21eligible project, and the operator to the extent of its capital
22investment, may participate in the condemnation proceedings with
23the standing of a property owner.

24(c) Termination.--For cause shown, the local agency may
25terminate the comprehensive agreement and exercise any other
26rights and remedies that may be available at law or in equity.

27(d) Claims.--The local agency may make or cause to be made
28any appropriate claims under maintenance, performance or payment
29bonds or lines of credit required under section 4705(b)(1)
30(relating to implementation of public-private partnership

1agreement).

2(e) Procedure after takeover.--If a local agency takes over
3an eligible project pursuant to (a), it may acquire, design,
4construct, improve, renovate, operate, expand, equip or maintain
5the eligible project, impose user fees, impose and collect lease
6payments for the use of the project and comply with service
7contracts as if it were the operator. Revenue subject to a lien
8shall be collected for the benefit of and paid to secured
9parties, as their interests may appear, to the extent necessary
10to satisfy the operator's obligations to secured parties,
11including the maintenance of reserves. Liens shall be
12correspondingly reduced and released when they are paid off.
13Before a payment to or for the benefit of secured parties, the
14local agency may use revenue to pay current operation and
15maintenance costs of the qualifying project, including
16compensation to the responsible local agency for its services in
17operating and maintaining the qualifying project. The right to
18receive payment, if any, is just compensation for the eligible
19project. The full faith and credit of the local agency may not
20be pledged to secure any financing of the operator by the
21election to take over the eligible project. Assumption of
22operation of the eligible project may not obligate the local
23agency to pay an obligation of the operator from sources other
24than revenue.

25§ 4712. Utility crossing.

26(a) General rule.--The operator and each public service
27company, public utility, railroad and cable television provider
28whose facilities are to be crossed or affected shall cooperate
29fully in planning and arranging the manner of the crossing or
30relocation of the facilities. An amount paid for the crossing,

1construction, moving or relocating facilities must be paid by
2the operator.

3(b) Disputes.--If the operator and a public service company,
4public utility, railroad or cable television provider are unable
5to agree upon a plan for the crossing or relocation, the
6commission may determine the manner in which the crossing or
7relocation is to be accomplished and any damages due arising out
8of the crossing or relocation. The determination shall be made
9within 90 days of notification by the private entity that the
10project will cross utilities subject to the commission's
11jurisdiction. The commission may employ expert engineers who
12shall examine the location and plans for the crossing or
13relocation, hear any objections, consider modifications and make
14a recommendation to the commission. The cost of the experts must
15be borne by the operator.

16§ 4713. Governmental immunity.

17This chapter shall not be construed or deemed to constitute a
18waiver of the governmental immunity of a local agency or an
19affected local jurisdiction with respect to participation in or
20approval of an eligible project or its operation, including
21interconnection of the eligible project with another
22infrastructure or project. A political subdivision in which an
23eligible project is located has governmental immunity with
24respect to its design, construction and operation.

25§ 4714. Special approval.

26A local agency may enter into an agreement under this chapter
27only with the approval of its governing body.

28§ 4715. Exclusivity.

29The provisions of this chapter and regulations adopted in
30accordance with section 4718 (relating to regulations) shall

1constitute the exclusive method of procurement for agreements
2entered into under this chapter, notwithstanding any other law.
3In the event of a conflict with another statute or regulation,
4the provisions of this chapter and the regulations promulgated
5under this chapter shall govern.

6§ 4716. Use of intellectual property.

7Unless otherwise agreed and except to the extent not
8transferable by law, the local agency shall have the right to
9use all or a portion of a submitted proposal, including the
10technologies, techniques, methods, processes and information
11contained in the proposal. Notice of nontransferability by law
12shall be given to the local agency in response to the request
13for proposals.

14§ 4717. Applicability.

15Eligible projects that are subject to a public-private
16partnership agreement under this chapter shall not be subject to
17the requirements of the following:

18(1) The act of May 1, 1913 (P.L.155, No.104), referred
19to as the Separations Act.

20(2) Section 1909 of the act of June 23, 1931 (P.L.932,
21No.317), known as The Third Class City Code.

22(3) Section 1805 of act of June 24, 1931 (P.L.1206,
23No.331), known as The First Class Township Code.

24(4) Section 3107 of the act of May 1, 1933 (P.L.103,
25No.69), known as The Second Class Township Code.

26(5) Section 751 of the act of March 10, 1949 (P.L.30,
27No.14), known as the Public School Code of 1949.

28(6) Section 5 of the act of May 27, 1953 (P.L.244,
29No.34), entitled "An act relating to and regulating the
30contracts of incorporated towns and providing penalties."

1(7) Section 2517 of the act of July 28, 1953 (P.L.723,
2No.230), known as the Second Class County Code.

3(8) Section 2317 of the act of August 9, 1955 (P.L.323,
4No.130), known as The County Code.

5(9) Section 1405 of the act of February 1, 1966 (1965
6P.L.1656, No.581), known as The Borough Code.

7§ 4718. Regulations.

8The Department of General Services shall, within 12 months of
9the effective date of this section, promulgate proposed
10regulations which are necessary to implement the provisions of
11this chapter.

12Section 2. This act shall take effect in 60 days.