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S.F. No. 1648 - Public-Private Partnership Pilot Program
Author: Senator D. Scott Dibble
Prepared By: Krista Boyd, Senate Fiscal Analyst (651/296-7681)
Date: March 26, 2015


Section 1, subdivision 1, paragraph (a), allows the commissioner and Metropolitan Council to utilize public-private partnership (PPP) procurement methods for up to three projects, provided that the projects take advantage of private sector efficiencies in design and construction and private sector expertise in finance and development, and provide a better long-term value than possible through traditional state procurement.

Paragraph (b) allows the Commissioner or Council to consider, as part of this pilot program, any existing PPP mechanism or any mechanism that is the best available option for the state, including:

  • toll facilities;
  • BOT (build-operate-transfer) toll facilities;
  • BTO (build-transfer-operate) toll facilities;
  • user fees;
  • construction payments;
  • joint development agreements;
  • negotiated exactions;
  • air rights development;
  • street improvement districts; or
  • tax increment financing districts for transit.

Paragraph (c) directs the Commissioner and the Council to form the Joint Program Office for Economic Development and Alternative Finance, the duties of which include the review and approval of proposed pilot program projects and any contractual or financial agreements.   Membership of the Joint Office shall be as follows:

  • the Commissioner of Management and Budget;
  • the Commissioner of Employment and Economic Development;
  • the Commissioner of Administration;
  • the Commissioner of Transportation;
  • the Metropolitan Council;
  • a representative from the American Council of Engineering Companies – MN chapter;
  • a representative from the Central Minnesota Transportation Alliance;
  • a representative from the Counties Transit Improvement Board; and
  • a representative from the Minnesota County Engineers Association.

The Commissioner and the Council shall also invite the Federal Highway Administration and the Federal Transit Administration to participate in activities of the Joint Office.

Subdivision 2, paragraph (a) allows the Commissioner or the Council to receive, solicit, and evaluate PPP project proposals, provided that the projects are consistent with the Department of Transportation’s statewide transportation plan and the Council’s transportation policy plan.  If the Commissioner or Council receive an unsolicited proposal, they must publicize the proposal in the State Register and accept, for 120 days, other proposals for the same purpose.

Paragraph (b) prohibits the Commissioner or Council, in connection with a PPP agreement, from entering into a noncompete agreement that inhibits the state from addressing any infrastructure needs.

Paragraph (c) specifies that any PPP agreement that includes a temporary ownership or control transfer of state infrastructure to a private entity must contain a provision requiring the return of the infrastructure after a specified period of time.

Paragraph (d) allows only new projects to be considered for PPPs.  Proposals involving existing infrastructure may not be considered for a PPP, unless the proposal adds capacity.

Subdivision 3, paragraph (a), requires the Commissioner and the Council to contract with consultants for PPP proposal evaluation assistance, and specifies required qualifications of the consultants.

Paragraph (b) lists required criteria for the Commissioner and Council to consider during PPP solicitation, evaluation, and selection.

Paragraph (c) requires the Joint Program Office, established in Subdivision 1, to review proposals that have been evaluated by the Commissioner or Council.  If the Joint Office determines that a proposed project serves the public interest, it must then evaluate the proposals for that project according to the criteria specified in this bill.

Subdivision 4, paragraph (a) specifies the minimum provisions that must be part of a public-private agreement.

Paragraph (b) lists other allowable provisions of a public-private agreement.

Paragraph (c) requires the Joint Office to review any proposed contractual agreement before execution, to ensure that it serves the public interest and meets the requirements of this bill.

Subdivision 5, paragraph (a), allows the Commissioner or Council to utilize any available federal funding for pilot PPP projects.

Paragraph (b) allows the Commissioner or Council to enter into agreements with the federal government in the operation of the pilot program.

Paragraph (c) directs the Commissioner and Council to maximize pilot project funding from nonstate sources, and allows them to use all available funding (federal, state, local, and private) for a pilot project.

Subdivision 6 requires a report to the Legislature by August 1, 2016, and annually thereafter, which lists and describes agreements under this program.

This bill is effective the day after an appropriation is effective for the Joint Program Office established in Section 1, for the hiring of a consultant, and for the preparation of required reports.

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