PRINTER'S NO. 419
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
382
Session of
2015
INTRODUCED BY EVANKOVICH, TALLMAN, WATSON, A. HARRIS, MENTZER,
SAYLOR, CUTLER, EVERETT, DeLUCA, DUNBAR, GROVE, McGINNIS,
OBERLANDER, GINGRICH, BLOOM, SIMMONS AND MOUL,
FEBRUARY 9, 2015
REFERRED TO COMMITTEE ON STATE GOVERNMENT, FEBRUARY 9, 2015
AN ACT
Amending Title 62 (Procurement) of the Pennsylvania Consolidated
Statutes, adding provisions relating to local agency public-
private partnerships for water and sewer projects.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Title 62 of the Pennsylvania Consolidated
Statutes is amended by adding a chapter to read:
CHAPTER 47
LOCAL AGENCY PUBLIC-PRIVATE PARTNERSHIPS
FOR WATER AND SEWER PROJECTS
Sec.
4701. Definitions.
4702. Unsolicited submission of public-private partnership
agreement proposals to local agency.
4703. Solicitation of proposals for public-private partnership
agreements.
4704. Evaluation and selection of public-private partnership
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agreement proposal.
4705. Implementation of public-private partnership agreement.
4706. Service contracts.
4707. Affected local jurisdictions.
4708. Dedication of public property.
4709. Powers and duties of operator.
4710. Federal, State and local assistance.
4711. Material default and remedies.
4712. Utility crossing.
4713. Governmental immunity.
4714. Special approval.
4715. Exclusivity.
4716. Use of intellectual property.
4717. Applicability.
4718. Public Utility Commission.
§ 4701. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Affected local jurisdiction." A local agency in which all
or a portion of an eligible project is located.
"Commission." The Pennsylvania Public Utility Commission.
"Eligible project." A building or facility used for public
water supply or treatment, storm water treatment and disposal or
waste water treatment and disposal.
"Lease payment." A form of payment, including a land lease,
by a local agency to the operator for the use of an eligible
project.
"Local agency." A county, city, borough, incorporated town,
township, county institution, local authority or a joint or
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cooperative body of local agencies or an instrumentality,
authority or corporation thereof which has authority to enter
into a contract.
"Material default." A default by the operator in the
performance of its duties under section 4709(e) (relating to
powers and duties of operator) which jeopardizes adequate
service to the public from an eligible project .
"Offeror." A private entity that submits a proposal under
this chapter.
"Operator." The private entity that is responsible for an
eligible project or a portion of an eligible project, including
acquisition, design, construction, improvement, renovation,
expansion, equipping, maintenance and operation.
"Private entity." An individual, corporation, limited
liability company, partnership, joint venture or other private
business entity.
"Public-private partnership agreement." An agreement between
a local agency and a private entity which involves the
development or operation, or combination thereof, of an eligible
project by the private entity. The agreement may consist of the
following:
(1) Predevelopment agreements leading to other
implementing agreements.
(2) A design-build agreement.
(3) A design-build-operate agreement.
(4) A design-build-maintain agreement.
(5) A design-build-finance-operate agreement.
(6) A design-build-operate-maintain agreement.
(7) A design-build-finance-operate-maintain agreement.
(8) An operate-maintain agreement.
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(9) A concession providing for the private entity to
design, build, operate, maintain, manage or lease an eligible
project.
(10) Any other delivery method or agreement or
combination of methods or agreements that the local agency
determines will address the needs of the Commonwealth and the
local agency and serve the public interest.
The term shall not include the acquisition of an eligible
project by a public utility under 66 Pa.C.S. § 102 (relating to
definitions).
"Request for proposals." All documents, including those
either attached or incorporated by reference, used for
soliciting proposals.
"Responsible offeror." An offeror that has submitted a
responsive proposal and possesses the capability to fully
perform the contract requirements in all respects and the
integrity and reliability to assure good faith performance.
"Responsive proposal." A proposal which conforms in all
material respects to the requirements and criteria in the
request for proposals.
"Revenue." Any of the following generated by an eligible
project:
(1) A user fee.
(2) A lease payment.
(3) A service payment.
"Sealed proposal." A proposal which contents are not
disclosed until the proposal receipt date.
"Service payment." Payment to the operator of an eligible
project pursuant to a public-private partnership agreement.
"User fee." The rate or other charge imposed by the operator
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of an eligible project for use of the eligible project pursuant
to a public-private partnership agreement.
§ 4702. Unsolicited submission of public-private partnership
agreement proposals to local agency.
A private entity may request consideration of a proposed
public-private partnership agreement for an eligible project.
The request may be submitted to the applicable local agency, and
any proposal under this section shall not be approved unless the
local agency follows procedures outlined in sections 4703
(relating to solicitation of proposals for public-private
partnership agreements) and 4704 (relating to evaluation and
selection of public-private partnership agreement proposal). A
request shall be accompanied by the following material and
information:
(1) A topographic map of 1:2,000 or other appropriate
scale indicating the location of the eligible project.
(2) A description of the eligible project, including the
conceptual design of the facility or a conceptual plan for
the provision of services and a schedule for the initiation
of and completion of the eligible project to include the
proposed major responsibilities and timeline for activities
to be performed by both the local agency and private entity.
(3) A statement setting forth the method by which the
private entity proposes to secure the necessary property
interests required for the eligible project. The statement
shall include the following:
(i) The names and addresses, if known, of the
current owners of the property needed for the eligible
project.
(ii) The nature of the property interests to be
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acquired.
(4) Information relating to the current plans, if any,
for development of facilities to be used by a local agency
that are similar to the eligible project being proposed by
the private entity.
(5) A list of all permits and approvals required for the
eligible project from Federal, State or political
subdivisions and a projected schedule for obtaining the
permits and approvals.
(6) A list of any utility facilities known to the
private entity that may be crossed or affected by the
eligible project and a statement of the plans of the operator
to accommodate the crossings or affected facilities .
(7) A statement setting forth the private entity's
general plans for financing the eligible project, including
the sources of the private entity's funds.
(8) The names and addresses of the persons who may be
contacted for further information concerning the request.
(9) User fees, lease payments and other service payments
proposed in the public-private partnership agreement,
including frequency of assessments and the methodology and
circumstances for changes to the user fees, lease payments
and other service payments.
§ 4703. Solicitation of proposals for public-private
partnership agreements.
(a) Solicitation of proposals.--A local agency may issue a
request for proposals for public-private partnerships for an
eligible project.
(b) Availability to general public.--Copies of a request for
proposals shall be made available to any interested person
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residing within the affected local jurisdiction upon request to
the local agency. A local agency may establish procedures for
the distribution of a request for proposals, including the
imposition of a fee to reimburse the local agency for the costs
of photocopying and mailing.
(c) Receipt of proposals.--Offerors shall submit their
sealed proposals to ensure that they are received prior to the
time and date established for receipt of the proposals. Sealed
proposals shall be submitted in the format required by the local
agency. All sealed proposals shall be opened at the time, date
and place designated in the request for proposals.
(d) Fee.--The local agency may charge a reasonable fee to
cover the costs of processing, reviewing and evaluating the
proposal , including reasonable attorney fees and fees for
financial and other necessary advisers or consultants.
§ 4704. Evaluation and selection of public-private partnership
agreement proposal.
(a) Evaluation criteria.--A local agency shall evaluate each
responsive proposal to determine which one, if any, has the best
value for and is in the best interest of the local agency. In
making this determination, a local agency may consider any of
the following:
(1) Cost.
(2) Price.
(3) Financial commitment.
(4) Innovative financing.
(5) Bonding.
(6) Technical, scientific, technological or
socioeconomic merit.
(7) Financial strength and viability.
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(8) Design, operation and feasibility of the eligible
project.
(9) Public reputation, qualifications, industry
experience and financial capacity of the private entity.
(10) The compatibility of the proposal with existing
local and county land use plans.
(11) The commitment of local communities to approve land
use plans in preparation for the project.
(12) Other factors deemed appropriate by the local
agency.
(b) Weighted consideration.--The relative importance of each
evaluation factor shall be fixed prior to opening the proposals.
(c) Discussion with responsible offerors and revision of
proposals.--As provided in the request for proposals,
discussions and negotiations may be conducted with responsible
offerors for the purpose of clarification and of obtaining best
and final offers. Responsible offerors shall be accorded fair
and equal treatment with respect to any opportunity for
discussion and revision of proposals. In conducting discussions,
there shall be no disclosure of any information derived from
proposals submitted by competing offerors.
(d) Selection for negotiation.--The responsible offeror
whose proposal is determined in writing to be the best value for
and in the best interests of the local agency and the general
public, taking into consideration all evaluation factors, shall
be selected for contract negotiation.
(e) Cancellation.--A request for proposals may be canceled
at any time prior to the time a partnership contract is executed
by all parties when it is in the best interests of the local
agency.
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(f) Award.--Upon reaching an agreement with a responsible
offeror, the local agency shall enter into a public-private
partnership agreement with the responsible offeror. The public-
private partnership agreement shall be consistent with the
requirements of this chapter. If agreement cannot be reached
with the responsible offeror, then negotiations shall be
formally terminated with the responsible offeror. If proposals
were submitted by one or more other responsible offerors,
negotiations may be conducted with the other responsible offeror
or offerors in the order of their respective qualification
ranking. The contract may be awarded to the responsible offeror
whose proposal is then ranked as providing the best value .
(g) Resolution of controversies.--If a private entity is
aggrieved by a selection under this section , a responsible
offeror may file a claim with the court of common pleas where
the local agency is located. The process for the filing and
resolution of claims, including rights, contents, timing,
evaluation, determination and remedies, which are established in
Chapter 17 (relating to legal and contractual remedies) shall
apply insofar as they are practicable.
§ 4705. Implementation of public-private partnership agreement.
(a) Final approval.--The approval of the local agency is
contingent upon the private entity's agreement to enter into a
contract with the local agency.
(b) Contracts .--Prior to designing, constructing, improving,
renovating, expanding, equipping, maintaining or operating the
eligible project, the private entity shall enter into a
contract detailing the public-private partnership agreement with
the local agency. The contract shall provide for all of the
following:
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(1) Delivery of maintenance, performance and payment
bonds or letters of credit in connection with the
acquisition, design, construction, improvement, renovation,
expansion, equipping, maintenance or operation of the
eligible project, in the forms and amounts satisfactory to
the local agency.
(2) Review of plans and specifications for the eligible
project by the local agency and approval by the local agency
if the plans and specifications conform to standards
acceptable to the local agency. This paragraph may not
require the private entity to complete design of an eligible
project prior to the execution of a contract.
(3) Inspection of the eligible project by the local
agency to ensure that the operator's activities are
acceptable to the local agency in accordance with the
public-private partnership agreement.
(4) Maintenance of policies of liability insurance,
copies of which shall be filed with the local agency
accompanied by proofs of coverage, self-insurance, in form
and amount satisfactory to the local agency and reasonably
sufficient to insure coverage of tort liability to the public
and employees and to enable the continued operation of the
eligible project.
(5) Monitoring of the practices of the operator by the
local agency to ensure that the eligible project is properly
maintained.
(6) Reimbursement to be paid to the local agency for
services provided by the local agency.
(7) Filing of appropriate financial statements on a
periodic basis.
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(8) Policies and procedures governing the rights and
responsibilities of the local agency and the operator in the
event the contract is terminated or there is a material
default by the operator. The policies and procedures shall
include conditions governing assumption of the duties and
responsibilities of the operator by the local agency and the
transfer or purchase of property or other interests of the
operator by the local agency.
(c) Fees.--The contract may provide for a user fee, lease
payment or service payment. A copy of a service contract must be
filed with the local agency. When negotiating a user fee under
this section, the parties shall establish payments or fees that
are the same for a person using the facility under like
conditions and that will not materially discourage use of the
eligible project. The execution of the contract or an amendment
to the contract constitutes conclusive evidence that the user
fee, lease payment or service payment provided for complies with
this chapter. A user fee or lease payment established in the
contract as a source of revenue may be in addition to or in lieu
of a service payment.
(d) Grants or loans.--In the contract, the local agency may
agree to make a grant, if the terms of the grant allow, or loan
to the operator from an amount received from the Federal or
State government or a political subdivision or from one of their
agencies or instrumentalities.
(e) Duties.--The contract shall incorporate the duties of
the operator under this chapter and may contain other terms and
conditions that the local agency determines serve the public
purpose under section 4704(d) (relating to evaluation and
selection of public-private partnership agreement proposal). The
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contract may contain any of the following:
(1) Provisions under which the local agency agrees to
provide notice of default and right to cure for the benefit
of the operator and the persons specified in the notice as
providing financing for the eligible project.
(2) Other lawful terms and conditions to which the
operator and the local agency mutually agree, including
provisions regarding unavoidable delays or provisions
providing for a loan of public funds to the operator to
acquire, design, construct, improve, renovate, expand, equip,
maintain or operate one or more eligible projects.
(3) Provisions under which the authority and duties of
the operator under this chapter shall cease and the eligible
project is dedicated to the local agency or, if the eligible
project was initially dedicated by an affected local
jurisdiction, to the affected local jurisdiction for public
use.
(f) Amendments.--Change in the terms of the contract, as may
be agreed upon by the parties, shall be added by written
amendment.
(g) Date.--In connection with its approval of the eligible
project, the local agency shall establish a date for the
commencement of activities related to the eligible project. The
local agency may extend the date.
(h) Public access.--Any documents created by or provided to
a local agency under this chapter shall be subject to inspection
and copying only to the extent required under the act of
February 14, 2008 (P.L.6, No.3), known as the Right-to-Know Law.
Nothing in this chapter shall be construed to abrogate the
provisions of the act of November 29, 2006 (P.L.1435, No.156),
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known as the Public Utility Confidential Security Information
Disclosure Protection Act.
(i) Debt capacity.--A contract entered into under this
chapter shall not enlarge, diminish or affect the authority
otherwise possessed by the local agency to take action that
would impact the debt capacity of the Commonwealth or any of its
political subdivisions.
§ 4706. Service contracts.
In addition to any authority conferred by statute, a local
agency may contract with an operator for the delivery of
services to be provided as part of an eligible project in
exchange for service payment and other consideration as the
local agency may deem appropriate.
§ 4707. Affected local jurisdictions.
(a) Notification.--Prior to entering into a public-private
partnership agreement with a responsible offeror in accordance
with section 4704 (relating to evaluation and selection of
public-private partnership agreement proposal), the local agency
shall notify each affected local jurisdiction by furnishing a
copy of the proposal to each affected local jurisdiction. The
responsible offeror shall reimburse the local agency for costs
incurred by the agency in furnishing a copy of the proposal to
each affected local jurisdiction.
(b) Comments.--Each affected local jurisdiction that is not
the applicable local agency for the respective eligible project
shall, within 30 days after receiving the notice, submit any
comments it may have in writing on the proposed eligible
project to the applicable local agency and indicate whether the
facility is compatible with the local ordinance requirements and
other local requirements. The comments shall be given
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consideration by the local agency prior to entering a public-
private partnership agreement with a private entity.
§ 4708. Dedication of public property.
A local agency may dedicate any property interest, including
land, improvements and tangible personal property, that it has
for public use in an eligible project if it finds that doing so
will serve the public purpose under section 4704(a) (relating to
evaluation and selection of public-private partnership agreement
proposal) by minimizing the cost of an eligible project to the
local agency or reducing the delivery time of an eligible
project. In connection with the dedication, a local agency may
convey any property interest that it has, subject to the
conditions imposed by law, to the operator, subject to the
provisions of this chapter, for consideration as the local
agency may determine.
§ 4709. Powers and duties of operator.
(a) Powers.--The operator shall have the power to acquire,
design, construct, improve, renovate, maintain, expand, equip or
operate the eligible project and collect lease payments, impose
a user fee or enter into a service contract in connection with
the use of its power.
(b) Right.--The operator may own, lease or acquire any other
right to use or operate the eligible project.
(c) Financing.--
(1) Notwithstanding paragraph (2), any financing of the
eligible project may be in an amount and upon terms and
conditions as may be determined by the operator.
(2) The operator may issue debt, equity or other
securities or obligations, enter into sale and leaseback
transactions and secure any financing with a pledge of,
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security interest in or lien on any or all of its property,
including all of its property interests in the eligible
project.
(d) Operation.--In operating the eligible project, the
operator may do all of the following:
(1) Make classifications according to reasonable
categories for assessment of user fees.
(2) With the consent of the local agency, make and
enforce reasonable rules to the same extent that the local
agency may make and enforce rules with respect to similar
facilities.
(e) Duties.--The operator shall do the following:
(1) Acquire, design, construct, improve, renovate,
expand, equip, maintain or operate the eligible project in
accordance with the public-private partnership agreement.
(2) Keep the eligible project open for use by members of
the public as appropriate based upon the use of the facility
after its initial opening upon payment of the applicable user
fee, lease payment or service payment. The eligible project
may be temporarily closed because of emergencies or with the
consent of the local agency, to protect the safety of the
public or for reasonable construction or maintenance
procedures as set forth under the public-private partnership
agreement.
(3) Maintain or provide by contract for the maintenance
of the eligible project, if required by the public-private
partnership agreement.
(4) Cooperate with the local agency in making best
efforts to establish any interconnection with the eligible
project requested by the local agency.
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(5) Comply with the public private-partnership agreement
and any service contract.
(f) Additional services.--This section does not prohibit an
operator of an eligible project from providing additional
services for the eligible project to private entities or local
agencies , other than the local agency that is party to the
public-private partnership agreement, if the provision of
additional service does not impair the operator's ability to
meet its commitments to the local agency under the public-
private partnership agreement.
§ 4710. Federal, State and local assistance.
The local agency may obtain assistance from the Federal or
State government or one of its political subdivisions for an
eligible project in accordance with the purposes under section
4704 (relating to evaluation and selection of public-private
partnership agreement proposal) and may enter into a contract in
order to receive the assistance. The local agency may pay a
portion of the costs of an eligible project directly or
indirectly from the proceeds of a grant or loan made by the
Federal or State government or one of its political
subdivisions.
§ 4711. Material default and remedies.
(a) General rule.--If there is a material default by the
operator of an eligible project, the local agency may assume the
responsibilities and duties of the operator, in which case it
shall succeed to any right, title and interest in the eligible
project, subject to any liens on revenue previously granted by
the operator to any person providing financing.
(b) Condemnation.--A local agency which is a party to a
partnership contract, and which has the power of condemnation
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under State law, may exercise the power of condemnation to
acquire the eligible project in the event of a material default
by the operator. A person who has provided financing for the
eligible project, and the operator to the extent of its capital
investment, may participate in the condemnation proceedings with
the standing of a property owner.
(c) Termination.--For cause shown, the local agency may
terminate the public-private partnership agreement and exercise
any other rights and remedies that may be available at law or in
equity.
(d) Claims.--The local agency may make or cause to be made
any appropriate claims under maintenance, performance or payment
bonds or lines of credit required under section 4705(b) (1)
(relating to implementation of public-private partnership
agreement).
(e) Procedure after takeover.--
(1) If a local agency takes over an eligible project
pursuant to subsection (a), it may acquire, design,
construct, improve, renovate, operate, expand, equip or
maintain the eligible project, impose user fees, impose and
collect lease payments for the use of the project and comply
with service contracts as if it were the operator.
(2) Revenue 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 operator's
obligations to secured parties, including the maintenance of
reserves. Liens shall be correspondingly reduced and released
when they are paid off.
(3) Before a payment to or for the benefit of secured
parties, the local agency may use revenue to pay current
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operation and maintenance costs of the eligible project,
including compensation to the responsible local agency for
its services in operating and maintaining the eligible
project. The right to receive payment, if any, is just
compensation for the eligible project.
(4) The full faith and credit of the local agency may
not be pledged to secure any financing of the operator by the
election to take over the eligible project.
(5) Assumption of operation of the eligible project may
not obligate the local agency to pay an obligation of the
operator from sources other than revenue.
§ 4712. Utility crossing.
Notwithstanding any other provision of law, the following
shall apply:
(1) The operator and each public utility, railroad and
cable television provider whose facilities are to be crossed
or affected by an eligible project shall cooperate fully in
planning and arranging the manner of the crossing or
relocation of the facilities.
(2) All costs incurred by the public utility, railroad
or cable television provider in relocating, constructing or
reconstructing its facilities, including temporary
facilities, shall be paid by the operator.
(3) If the operator and a public utility, railroad or
cable television provider are unable to agree upon costs to
be paid by the operator under paragraph (2), the commission
shall determine the amount of the payment to be made by the
operator.
§ 4713. Governmental immunity.
This chapter shall not be construed or deemed to constitute a
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waiver of the governmental immunity of a local agency or an
affected local jurisdiction with respect to participation in or
approval of an eligible project or its operation, including
interconnection of the eligible project with another
infrastructure or project. An affected local jurisdiction has
governmental immunity with respect to an eligible project's
design, construction and operation.
§ 4714. Special approval.
A local agency may enter into an agreement under this chapter
only with the approval of its governing body.
§ 4715. Exclusivity.
The provisions of this chapter shall constitute the exclusive
method of procurement for agreements entered into under this
chapter, notwithstanding any other law. In the event of a
conflict with another statute or regulation, the provisions of
this chapter shall govern.
§ 4716. Use of intellectual property.
Unless otherwise agreed and except to the extent not
transferable by law, the local agency shall have the right to
use all or a portion of a submitted proposal, including the
technologies, techniques, methods, processes and information
contained in the proposal. Notice of nontransferability by law
shall be given to the local agency in response to the request
for proposals.
§ 4717. Applicability.
Eligible projects that are subject to a public-private
partnership agreement under this chapter shall not be subject to
the requirements of the following:
(1) The act of May 1, 1913 (P.L.155, No.104), referred
to as the Separations Act.
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(2) Section 1909 of the act of June 23, 1931 (P.L.932,
No.317), known as The Third Class City Code.
(3) Section 1805 of act of June 24, 1931 (P.L.1206,
No.331), known as The First Class Township Code.
(4) Section 3107 of the act of May 1, 1933 (P.L.103,
No.69), known as The Second Class Township Code.
(5) Section 751 of the act of March 10, 1949 (P.L.30,
No.14), known as the Public School Code of 1949.
(6) Section 5 of the act of May 27, 1953 (P.L.244,
No.34), entitled "An act relating to and regulating the
contracts of incorporated towns and providing penalties."
(7) Section 2517 of the act of July 28, 1953 (P.L.723,
No.230), known as the Second Class County Code.
(8) Section 2317 of the act of August 9, 1955 (P.L.323,
No.130), known as The County Code.
(9) 8 Pa.C.S. § 1405 (relating to separate bids for
plumbing, heating, ventilating and electrical work).
§ 4718. Public Utility Commission.
Except as provided in section 4712 (relating to utility
crossing) nothing in this chapter shall affect the existing
duties and jurisdiction of the Public Utility Commission.
Section 2. This act shall take effect in 60 days.
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